Hands holding a Chinese one yuan banknote

Market note, May 2026. For current figures see our live rate board.

The closer you get to the factory, the more likely you are to be quoted in yuan. That is not a formality. It changes which rate decides your payment, and it usually signals something useful about who you are dealing with.

Why factories price in their own currency

A Chinese manufacturer’s costs are in yuan. Labour, materials, rent, power, domestic freight, packaging. When he quotes in dollars he is converting, and building in a margin to protect himself against the conversion moving against him. Quote him in his own currency and that buffer is less necessary. It is one reason a yuan price is often keener than the dollar equivalent of the same order.

What the currency tells you about the supplier

This is the part worth paying attention to. Trading companies and export agents almost always quote in dollars, because they are intermediaries operating in the international layer. Manufacturers dealing directly are far more likely to work in yuan. So the invoice currency is a clue about whether you are talking to the factory or to somebody standing between you and it. It is not conclusive on its own, but combined with a few direct questions about production it usually settles the matter. That distinction matters beyond price. A manufacturer can answer a technical question properly, supply parts years later, and be held to a specification. An intermediary can do none of those reliably.

What changes for you

If your invoice is in yuan, the yuan against the naira is your rate, and watching the dollar tells you very little about what you will actually pay. Your bank still needs to be able to settle in that currency, which is worth establishing before you agree terms rather than after. And your costing should be built in the invoice currency, converted once, so that a rate movement changes one figure rather than invalidating the model. The dollar has not stopped mattering. Freight, insurance and duty still trace back to it. But the money leaving your account for the goods themselves is governed by whichever currency the supplier wrote on the invoice, and that is the rate to watch.

Buying direct from a Chinese factory? We assess whether a supplier is the manufacturer or a reseller, and cost the purchase in the currency you will actually pay in. There is no charge for the first look. Request a cost review or get in touch.