The Survey Of RMB Derivatives And Risk Management Of Company

As china becomes the 2nd largest economy and the largest exporter in the world in the 2010, the People's Bank of China in 2011 announced the Administrative Rules of Pilot Program on RMB Settlement for Overseas Direct Investment. More and more domestic companies will have the freedom to use RMB as the currency for pricing and settlement in the cross-border trade transactions. A domestic company can directly go to banks to handle the overseas remittance of capital such as front-end expenses, capital increase/decrease, equity transfer or liquidation, with the certificates or documents from the office in charge of overseas direct investment. As an international settlement currency, RMB will play a more important role in global trade; domestic enterprises will become more internationalized.As the most dynamic cell of the society, Small and Medium Enterprises face the all kinds of challenges of the risk management, such as the risk of exchange rate of RMB against foreign currency, such as the risk of capital market floating interest rate and so on. How to effectively use the RMB currency and avoid the risks associated with business management is one of the topics which must be addressed. Although quite a few companies have adopted the financial derivatives to hedge market risks arising from fluctuations in the capital market, but the use of financial derivatives by them is often lack of professional knowledge and awareness, and mostly adopted only by large enterprises, in most cases, the company has to in a passive status to accept the recommendation of the intermediary banks and counterparty. Sometimes, this type of enterprise is primarily through offshore banks or via its outside"shell"company and affiliates in an indirect way of achieving RMB derivatives transactions, for hedging the transaction costs, trading techniques, controlling risk and other aspects. There are normally high agent cost, risk trap and failure phenomenon. In the same time, there is likely lack of specialized books and risk management guideline for enterpriser accessing and mastering the risk of use the company's RMB derivatives in the china market.The thesis intend to make a full-scale investigation in the RMB related derivatives especially in Chinese market and try to classify it on a global view. Being an experienced manager in business fields, the writer try to analyze the perspective of specific applications of RMB derivatives on a portfolio strategy of capital risk management, hope the reader to learn the basic knowledge of RMB related derivatives and some useful concepts for the capital operation, hope the reader to get various financial instruments to hedge the exchange rate risk and interest rate risks. In a timely manner, can help the manager to modify and adjust their financial risk identification, risk management principle, risk tolerance, and can form a mature investment philosophy, and become a good venture, qualified operational manager and rational investor in the real business world.