Tentative Research On Several Problems About Investment Risks Of Fox Farms

Investment risk is a major problem faced by investors of fox farms in china. Almost all of fox farms in China have managed by themselves since market economy. They have experienced adversities for three times all over the industry in 1989, 1997 and 2007. On the whole,China has a great volume of trades on fox fur, and the development of trades was faster than the development of production on fox fur. However, the instability of Earnings from production has bad influences on breeding foxes, the exit of fox farms and the development of the whole industry. Risks are objective realities existing in fur production and fur trade based on the complex of fur farming technology and the instability of economy environment and market. Risks also come from following reasons: the bad management of fox farms, the low speed of integral development on fox industry and the lack of supports from industrial associations and government departments.Risk management on the investments of Chinese fox farms, aiming to help investors to make better decisions of investments and managements, based on the reasons and gravity of risks, involves in following contents: making a recognition on all kinds of risks, finding out risk factors and assessing major risks.After making linear multivariate regression equations on same major risk factors, the production and prices of fox furs are recognized as the most important factors in major risk factors. Based on the analysis of the impact on benefit from the combination of production and prices and the relations between prices and time, following conclusion is drawn: Investing time is very important to obtain perspective return. But, investing time is not a time of highest quotation, but a period of firming market. Based on the relations between prices and quality and the sensibility of fox pelt market, it is reached that the final result is decided by good pelt quality and high survival ratio of fox.On the basis of the analysis above, according to the market competition mechanism and the importance of the science and technology in production, some useful measures are proposed from three angles of fox farming industries, related government departments and industrial associations for Chinese fox farms to have a stable order production and a sustainable development.