Study On Foreign Exchange Risk Management For China’s Large-Scale Coal Enterprise In The Process Of Internationalization

The paper firstly analyzes the historical background of the internationalization process of China-based large-scale coal enterprises and the opportunities brought by the financial crisis, adopts the SWTO analysis to comprehensively analyze the internal strengths and weaknesses as well as external opportunities and threats of these enterprises. It finds out that foreign exchange risks are a major kind of risks in the internationalization process of large-scale coal enterprises in China, and reveals the practical significance to strengthen the research on foreign exchange risk management. Secondly, it identifies the risk exposure points in specific business operations during the systematic research on foreign exchange risks, and summarizes main foreign exchange risk factors. The VaR model is introduced to measure risks and the indicator system is established to systematically assess foreign exchange risks. Thirdly, according to the specific characteristics of the business of coal enterprises, foreign exchange risk assessment models and risk measurement model, it developed foreign exchange risk assessment principles, and the introduction of system dynamics and dynamic optimization methods such as decision analysis, risk control model. It conducts qualitative and quantitative estimation, evaluation and analysis of foreign exchange risks in such business areas as foreign exchange collection for coal exports, foreign exchange payments for coal imports, foreign currency loan debt, and overseas project investment. Then, taking the daily exchange rate data of China, United States and Japan, the paper empirically analyzes the exchange rate fluctuations with ARCH, GARCH and EGARCH test methods, and meanwhile, verifies the effectiveness and practicality of foreign exchange risk assessment methods through case study of the yen-dominated foreign debt and low-interest loan, and the bidding payment for an Australian WM coal project of China HW Company. Finally, according to the theory on decision support system, the paper designs a decision system for foreign exchange risk management in the internationalization process of China’s large-scale coal enterprises so as to vigorously support their scientific strategic decision-making regarding internationalization.