Consider the benefits of dealing in renminbi

If you are dealing with the Chinese, it may be a very good idea to start thinking about doing your deals in the Chinese currency, the renminbi – translated as “people’s currency”, but more commonly referred to as the yuan (CNY). According to John Cairns, currency strategist at the Rand Merchant Bank, the reasoning for this is that basically it will lessen the risk of currency fluctuation, and will gain you better terms from Chinese customers and suppliers. “The way it works at the moment,” he told FTW, “is that SA and Chinese companies deal in US dollars. “So the Chinese face a US$/CNY currency risk, and the South Africans a US$/rand risk. But the new process allowed by Chinese trade liberalisation is that the CNY is usable.” Under the new system, the Chinese would no longer face a currency exchange risk. “And, put quite simply,” said Cairns, “you’ll get a better price from them.”