Practice And Risk Control Of Demand Guarantee For Construction And Trading

Nowadays, being the most popular and important credit instrument of the modern society, demand guarantee or other payment undertakings was highlighted during the entire proceeding of the project management not only in construction fields, but also in international transaction. The application of demand guarantee mechanism in developed nations can be traced back for centuries ago, the framework of legislation for bonding/guarantee system in western countries was well-built and matured for decades. The advantages of demand guarantee mechanism had been proved by market practice and experience of project management.On the contrary, demand guarantee mechanism in China is new concept for government, construction or trading enterprises, even for bankers and insurance companies. Since China's economy growing rapidly during last 20 years, and joined WTO club in 2001, more and more Chinese construction and trading companies had entered into international market contesting for world competition and comprehensive project, thus the concept of contract demand guarantee was introduced to and being researched by Chinese people from different points of view with different purpose.In order to make introducing and clarification of contract demand guarantee theory and it's performance mechanism in international construction project or trading market as well as the risk management, extensive theory study and analysis in thesis was presented by various terms and conditions of bank guarantee to indentify risks identification. By discussing on legislation relation from different parties and normal proceeding in practice, major type of conditional guarantee are included for background details exploring and development in near future. Based on above issues further discussion was carrying on to the part of risk control of a demand guarantee with real practice cases analysis. Considering over the current situation in risk management research, there is distance between China and developed countries on this point. For the purpose of inspiring and reference to Chinese enterprises, in accordance with theory of international project management and banking practice in risk evaluation, the strategic risk management model for demand guarantee—lifecycle control method are concluded clearly in thesis and all tactics of lifecycle control being explored in the later part of it.