Chinese corporates shunned hedging during tariff upheaval

High hedging costs and increasingly stable spot rate meant exporters opted not to add FX hedges as RMB rose

Amid the ongoing US-China trade war this year, Chinese exporters chose to hold steady on their hedge ratios, according to dealers, owing to high hedging costs and expectations of a stable spot rate.

Exporters accumulate US dollars from foreign sales, and many have held on to those dollars in anticipation of continued strengthening against the Chinese renminbi that began in 2022.

But when the