The Study On Small And Medium-Sized Foreign Trade Enterprises Of China Foreign Exchange Risk Management Strategy

On July 21, 2005, after more than a decade of strictly pegging the RMB to the U.S dollar, the People's Bank of China announced a reform of the exchange rate policy. Under the reform, China's small and medium-sized foreign trade enterprises are bearing the foreign exchange risk impact. China's financial and foreign trade sectors have begun the foreign exchange risk management practice and exploration, and have accumulated some valuable experience. However, targeted research into the export enterprises with the current situation as well as their own characteristics is still not sufficient. Therefore, it is important to analyze the foreign exchange risk and its impact faced by China's export enterprises, and to identify the corresponding risk management preventive measures.Firstly, the risk faced by the export company is divided into three categories: transaction risk, accounting risk, and economic risk. The transaction risk should be focus on, and the impact of accounting risk is smaller, the economic exposure is of more extensive and far-reaching impact.Secondly, the article suggests the target and strategy of the export company risk management based on the practical feathers and the inside and outside risk environments is the core of this paper. Since the exchange rate reform, the exchange rate of RMB against the US dollar is on the rise continuously. From a long-term perspective, however, various factors affecting the exchange rate have also brought about the uncertainty and complexity changes to the exchange rate. Then it offers the opinion that the small and medium-sized foreign trade enterprises should increase the impact on flash, long-term profit, and competition, and chose a stable strategy. Thirdly, foreign exchange risk management. It discusses different types of risk identification and measurement, and sums up various specific measures to evade: for transaction exposure and translation exposure, it should take a take a balanced position and lock the exchange rate; as to economic exposure, its prevention depends largely on enterprises' decision-making in marketing, production and financial aspects. At last, the article suggests that the export company should construct a system of exchange rates risk management from the whole.In this paper, data analysis and theory analysis are used. The relevant data presented are analyzed by the author. At the same time, the author hopes that this paper can provide a little inspiration of foreign exchange risk awareness and prevention to the small and medium-sized foreign trade enterprises.