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ID090936
Title ProperChina's exchange rate movements and corporate currency invoicing strategies
LanguageENG
AuthorYi, Jingtao
Publication2009.
Summary / Abstract (Note)Since China introduced a new managed floating exchange rate regime in 2005, the persistent appreciation of the renminbi against the US dollar has led Chinese firms to reassess their choice of invoice currency among the dollar and other international alternatives to price their exports. The present paper performs a systematic invoice currency analysis by surveying the published literature, summarizing criteria for decision-making, and evaluating the choices available to Chinese exporters implementing currency invoicing strategies to maximize expected profits. This study finds that the euro could play an increasing role as the invoice currency of Chinese firms, although the US dollar will still play a dominant role. Chinese exporters might shift gradually from the dollar to the euro in the face of the falling dollar, balancing between the two by necessity.
`In' analytical NoteChina and World Economy Vol. 17, No. 5; Sep-Oct 2009: p.36-51
Journal SourceChina and World Economy Vol. 17, No. 5; Sep-Oct 2009: p.36-51
Key WordsRenminbi Exchange Rate ;  Invoice Currency ;  Consumer Currency Pricing ;  Producer Currency Pricing ;  Vehicle Currency