China's Project Finance Risk Management Problems And Their Countermeasures

The national economy has grown up with high speed of 9.4% in GDP and 8% in GDP per capital since the opening and reformation in China. And this promotes the development of infrastructure in energy sources, the system of draining, water supply, port and transportation. It is estimated by the WB that the 1% growth of GDP per capital needs the 9% growth in the infrastructure investment. The government can't afford such huge capital and it would cause the increase of the government liability, the outflow of the capital and the exchange rate risk only by the loan abroad and national debt. Under such circumstance it is an effective way to extend the project financing and has a remarkable realistic meaning.The lasting of project financing, the parties, and the complexity of the structure lead to the high risk, so it requires the whole process supervision and rigid risk management from the feasibility research to the operation of the project. While the project financing stays the exploring stage in China and there is great gap in the risk management of project financing between the developed countries and us. This produces great influence to the development of project financing in China.This article analyzes the risk of project financing, points out the problems in the project financing management and put forward with the countermeasures in order to manage and control the project financing risk effectively.This article can be divided into three parts.The first part, beginning with the introduction of the risk theory and the project financing theory this article analyzes the risk of the project financing and estimates the project financing risk.The second part, one case, Hebei Saide project, is analyzed based on the risk managing theory of the project financing and summarizes the experiences and lessons.The third part, the problems that exist in the process of the risk managing are pointed out from the aspects of laws, financing systems and the shares of risks. At last the countermeasures are put forwards.