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This research, conducted by the Economist Intelligence Unit and commissioned by Allen & Overy, examines how companies based outside of China are using its currency, the renminbi (RMB) and how that usage is changing.
The rapidity of the currency's internationalisation means that to a manager of a P&L statement in a multinational company, coming to grips with managing RMB exposure can seem like mounting a stallion without any real knowledge of how to ride it. Some learn quickly, others have to manage the jolts as best they can.
Some 77% of the respondents to this survey say that little or no understanding within the firm about how to conduct RMB transactions remains an important obstacle to greater usage of the currency in cross-border transactions. That figure suggests many non-Chinese companies have been caught by surprise at the currency’s international advance, but also that those that grasp the importance of sound management of their RMB exposures will be able to seize a competitive advantage.
Some results in this survey indicate this is happening already. Companies’ usage of RMB is affecting their China strategies in many ways, from the way they manage employees, to their approach to entering new markets in China, and even to their global supplier networks. But the next stage of this strategic development is now just beginning: deployment of RMB competence as a component of global strategy. Companies will soon regard their management of the currency in the same way they regard management of the US dollar, the euro and the yen. In emerging markets, where China is investing heavily, RMB competence may take prominence.
For so long, the RMB has been seen as a currency full of potential, with the brightest of international futures. For global companies, that future has already arrived.
Other resources:
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Infographics in English | 中文
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Case Study
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Video interview with Jane Jiang, partner at Allen & Overy