General

Dongguan is not only the opening place of China's modern history, but also the pioneer of reform and opening up. It is also known as the "famous city of modern manufacturing". In July 1978, TP, the first "three processing and one compensation" enterprise in Chinese Mainland, was officially established in Dongguan. Once sown, this "seed" burst into vigorous vitality, and from then on, thousands of trees spread. Dongguan adheres to the principle of export-oriented development, bringing together nearly 13000 foreign-funded enterprises and utilizing more than US $80 billion of foreign capital, with an average annual growth of 31.6%. "Made in Dongguan" is sold globally, and Dongguan ranks among the top five "Top 100 Foreign Trade Cities" in China for 14 consecutive years. In 2021, the total import and export volume of Dongguan's international trade will be 1524.7 billion yuan, ranking second in Guangdong Province. As one of the "three carriages" driving the economy, foreign trade has become the main force of Dongguan's GDP "breaking the trillion" in 2021.

In the past three years, under the multiple influences of the COVID-19, the escalation of Sino US trade frictions, and the geopolitical conflict between Ukraine and Russia, the unstable factors of enterprises' "going global" have increased, and the costs of raw materials, logistics, manpower and other factors have continued to rise. Due to the Western "choking neck", chips and other important parts are still in short supply, and the development momentum of international trade health enterprises with markets and resources at both ends has significantly weakened, The way for foreign trade enterprises to participate in the global market competition has ushered in unprecedented "wind and waves".

How to help Dongguan's foreign trade enterprises continue to "ride the wind and waves" has become an important and realistic topic for local finance. "It's not like having no clothes and sharing the same robe with your son." CCB Dongguan Branch, with the heart of "the greatest of the country", sticks to the original intention of serving the real economy, actively gives play to the financial power, "fights in the same robe" with foreign trade enterprises, and jointly sticks to the strength and responsibility of Dongguan's economy to help "stabilize foreign trade". In the past three years, Dongguan Branch has provided more than 3000 foreign-funded foreign trade enterprises in the city with US $90 billion of international settlement and 180 billion of cross-border RMB settlement, and invested 60 billion of cross-border financing. Among them, it has provided nearly 800 million yuan of inclusive financial support for hundreds of small and medium-sized enterprises.

In every 3 toys, every 5 smartphones, every 5 sweaters and every 10 pairs of sports shoes in the world, one comes from Dongguan, which is the direct impression of Dongguan's export-oriented economy.

In June 2022, Dongguan set up a "one-stop" service point for foreign investment in the Citizen Service Center, which is another important measure to vigorously support local foreign trade enterprises after Dongguan issued a series of "stabilizing foreign trade" measures. CCB Dongguan Branch has become the only resident bank of the four major banks, providing "one-stop" convenient financial services for foreign-invested enterprises, such as new registration, capital account opening, investment capital entry, currency contribution entry registration, and capital expenditure.

"What information is needed for the new registration of direct investment?" "When can my Hong Kong dollar capital be remitted in? What is the process?"...... The resident CCB Citizen Center Sub-branch found that there are more and more people consulting the policy.

"It has not been easy along the way. Although it has been very hard and the overseas market is very fierce, I believe that sticking to the end is victory, and also for the original purpose of starting a business..." Chen Hai, the head of KR Electronics, said this may explain the mood of most foreign trade operators at present. Mr. Chen has been struggling for many years. He started his business with borrowed money, but after many failures, he finally turned from a small workshop into a creative base integrating originality, research and development, design and manufacturing.

The supply chain of the global industrial chain is facing remolding. In the face of the future, where will their confidence come from?

From the "Pearl River Delta" in the view of land to the "Great Bay Area" in the view of sea, Dongguan foreign trade enterprises embrace the Great Bay Area going international and continue to explore new coastline. The branch sent out questionnaires to more than 200 foreign trade enterprises to deeply understand customer needs and pain points. The detailed survey results provided a lot of valuable reference for the branch to serve enterprises more targeted. At the same time, it actively responded to the internal needs of healthy enterprises in international trade, created new diversified financing products, provided comprehensive intelligence solutions for enterprises, and worked together with enterprises to answer the future road.

Build a "safe haven" without fear of wind and waves

In the volatile external situation, the uncertainty risk caused by the fluctuation of foreign exchange rate is increasing. China Construction Bank Dongguan Branch vigorously publicized and promoted the exchange rate derivative business, helped enterprises establish the concept of "risk neutral", built a "safe haven" for foreign trade enterprises, and jointly weathered the storm with enterprises, so as to escort the steady "going to sea" of enterprises.

What is the "risk neutral" concept of exchange rate? In short, enterprises should realize that foreign exchange fluctuations are two-way, help enterprises strengthen foreign exchange management, minimize the negative impact of exchange rate fluctuations, and improve financial stability.

PT Plastic Import and Export Co., Ltd. is mainly engaged in the import and domestic sales of plastic raw materials, with an annual import volume of more than US $10 million. Because the sales price of enterprises to downstream customers has often been determined in advance, enterprises have to bear not only the risk of fluctuations in the price of imported raw materials, but also the risk of losses caused by the fluctuation of forward exchange rate.

Recently, PT Company imported a batch of plastic materials of US $1 million from overseas suppliers, and agreed to pay after three months. Surprisingly, after three months, the RMB devalued, and the exchange rate at the time of payment was 1.5% lower than that at the time of signing the contract, resulting in the enterprise spending more than 100000 yuan to purchase foreign exchange for external payment.

"For the rise and fall of the exchange rate, most enterprises used to have a 'gambling' mentality, and did not incorporate the exchange rate fluctuations into their daily financial decisions". Zhou Rui, the head of PT Company, talked about his previous "gambling" mentality, "Fortunately, China Construction Bank came to the door and sent us the 'risk neutral' concept."

The branch visited enterprises on many occasions, designed personalized exchange rate hedging schemes such as forward settlement and sale of foreign exchange and interest rate options for PT Company, agreed with enterprises on the future settlement and purchase price of foreign exchange, and dispelled the concerns of enterprises about exchange rate.

Nowadays, more and more Dongguan foreign trade enterprises choose to stop at the foreign exchange "safe haven" built by the branch.

Concerned about the large fluctuation of exchange rate during the Dragon Boat Festival holiday, recently, WG, a "specialized and special" enterprise, tried to handle a long-term foreign exchange purchase with a period of 21 days, locking the cost of import purchase and payment of foreign exchange, and planning the profit income in advance. After the first taste of exchange rate hedging, the enterprise subsequently handled two forward foreign exchange purchases within one month, and with the professional support of the branch, WG improved the internal exchange rate risk management system and built a long-term mechanism to resist exchange rate fluctuations.

When talking about the foreign exchange risks experienced by the enterprise, Tang Guoqiang, the head of WG, said three "not easy", but his expression clearly revealed his confidence in taking the initiative in the future.

The sea is stormy and the storm is suddenly rising, and the little stars of sails sail back into the bay, embracing warmth. The small harbour has set up a clear sky for the sailboats, waiting for them to carry their dreams before starting.

With the recent release of the "Jianyue · Yindanhui" product jointly launched by the Department of Commerce of Guangdong Province, Guangdong Administration of Foreign Exchange and Guangdong Branch, China Export&Credit Insurance Guangdong Branch, and Guangdong Yuecai Financial Guarantee Group, the branch has carried out the responsibility of the big bank, actively helped to improve the awareness and ability of exchange rate risk avoidance of Dongguan International Trade and Health Enterprises, and written a new chapter in the service of exchange rate risk avoidance for small and medium-sized enterprises.

In the past three years, the Branch has avoided foreign exchange losses of nearly 300 million yuan for Dongguan foreign trade enterprises, so that foreign trade enterprises can get real benefits, and actively guide enterprises to shift their attention from foreign trade to domestic and foreign trade, and help the healthy development of international trade.