BEIJING - A year-on-year drop in the value of China's newly signed overseas contracts in the first three quarters of 2010 was partly due to Chinese companies seeking to avoid risks caused by the appreciation of the currency, the yuan, a senior official said on Monday.
Some Chinese companies have been anticipating the appreciation of the renminbi since the beginning of the year. When the value of the yuan rises, their earnings would drop as contracted projects overseas are settled in US dollars, said Chen Lin, commercial counselor of the Department of Overseas Investment and Economic Cooperation of the Ministry of Commerce.
"Currently, companies take yuan appreciation into full account when signing contracts overseas," Chen said.
During the first nine months of the year, China's turnover of contracted projects overseas reached $59.32 billion, up 16.6 percent from one year earlier. However, the value of newly signed contracts fell 6.5 percent to $81.98 billion.
Additionally, the fluctuation in the value of new contracts was normal and the growth momentum of China's overseas contract business remains generally good, Chen added.