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Why companies should pay their Chinese suppliers in RMB (instead of USD)

The development of the offshore RMB (CNH) and the subsequent roll-out of USDCNH Futures contracts have been a game changer for non-Chinese companies doing business with suppliers based in mainland China. As a result, an increasing number of companies have already switched their payment currency from USD to RMB.

USD vs RMB payments

Good to know!

  • There are no restrictions for companies outside China to use offshore RMB as a payment currency.
  • The procedure to remit a payment in RMB to a Chinese supplier is the same as for USD payments.
  • Chinese suppliers can issue invoices in RMB without VAT so long as the transaction is a cross-border one.

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