Growing roots along the Silk Road

In the Government Work Report delivered on March 5, Premier Li Keqiang encouraged Chinese companies to go global and invest overseas, promising that the government will protect the rights and interests of Chinese enterprises overseas.

"We will broaden the channels for using foreign exchange reserves, provide better financial, information and legal services, and offer consular protection to Chinese firms investing abroad, to guard against risk," Li told lawmakers.

Zheng said that setting up factories abroad has not only cut labor costs, but also helped expand the client base in the countries along the "One Belt, One Road" routes.

"By establishing factories overseas, we can surmount the difficulties caused by the appreciation of the renminbi against the euro and many other currencies," he added.

There was a 2.5 percent depreciation in the spot exchange rate of the yuan against the dollar in 2014, the first decline since 2005 when China began reforms of the yuan's exchange rate mechanism.

Other major currencies, such as the yen, the rouble and the euro, have also weakened, exerting more pressure on the renminbi.

Tang Yuxiang, board chairman of Zhengzhou Yutong Group Co Ltd, a large industrial group that specializes in bus manufacturing, said that the appreciation of the renminbi against the euro has compromised the competitiveness of his company's products in overseas markets.

"In European countries, the vehicles made by Yutong are even more expensive than those from Mercedes-Benz AG, and many retailers have frequently complained about the high prices of our products," Tang said on March 10 during discussions with other lawmakers during the annual session of the country's top legislature - the National People's Congress.

Listed on the Shanghai Stock Exchange in 1997, Yutong has exported buses to markets in Asia, Europe, Latin Americ and the Middle East. In 2012, the company entered the United States market.

"Because of the appreciation of the renminbi, much of our market share in Southeast Asia has been grabbed by Japanese vehicle makers," he said, adding that the yen has "gone too far" by depreciating more than 40 percent in the past two years.

Tang called on financial regulators to keep a close eye on currency rates to ensure that Chinese exporters will not suffer much economic loss.

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