金融英语阅读：Exporters have yuan jitters
As the yuan continues to show further signs of appreciation, exporters at the China Import and Export Fair in Guangzhou are already starting to feel the heat.Many firms, reluctant to sign long-term contracts due to fluctuating exchange rates, are defending their turf by shifting to short-term contracts. One such exporter is China Xingxing Group Co, a Taizhou, Zhejiang Province-based manufacturer of household refrigerators and freezers.
Xingxing Group's Managing Director Chen Minghai said his company now only accepts short-term orders, according to a report from the Chinese-language newspaper, China Enterprise News.
Prices for longer-term orders will be calculated accordingly to avert exchange risks and any orders longer than six-months will be turned down, Chen was quoted as saying in the report.
Companies used to signing longer-term orders are well aware of the risks.
Zhuo Min, marketing manager of vacuum exporter TEK Electrical (Suzhou) Co, told the Global Times that currency appreciation has had an impact on the way they do business.
"Yuan appreciation poses a threat to all export-oriented companies. However, we are not planning to shift to short-term contracts. We want to maintain good relations with our clients," said Zhuo.
"Currently we can still digest yuan appreciation, however, in the long run, if the appreciation is beyond the capacity of the company, we will find a way to deal with the problem," he said.
Smaller export firms may find it hard to weather further appreciation.
"I think some small exporters will eventually be phased out due to decreased profit margins," said Zhuo.
TEK Electrical, which has exported vacuums to developed countries for more than 10 years, may now venture further into the domestic market to avert export risk exposure.
Domestic sales of several of its models have increased at an annual growth rate of nearly 150 percent. "The domestic market has huge potential," said Zhuo.
The trade event, also called the Canton Fair, is divided into three weekly sessions that run through November 4. Some 70 percent of all 23,599 registered vendors are from small and medium-sized companies.
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