Study On Project Financing Risk Management In China

Project Finance, as a new financing tool, was emerged in the international capital markets in 1970s and has developed into an efficient wide-used financing method in infrastructure's construction. In the mid of 1980s, China introduced Project Finance for the first time. As China's capital market opens more widely to the outside world, Project Finance gains rapid development and plays important roles in infrastructure financing. But, it also has its demerits. Long-time negotiation, a wide variety of involved parties and complicated structure lead it to being exposed to many risks and so that it is asked to implement rigid supervision and risk management during the whole financing course. But in China, Project Finance is still at the starting stage and leaves us many things to explore, so people, especially those who are affected by planned-economics lack risk consciousness. In most cases, people thinks risk arrangement or risk control as risk management by mistake, so it worth exploring the risk management of Project Finance in China and it is also very meaningful to analyze and solve our current problems in risk management of Project Finance.This thesis not only gives the general description on basic concept, usual practice of project finance and risk management, but also provides the case study to illustrate the main six risks in China, which are Credit Risk, Completion Risk, Management Risk, Political Risk, Economic Risk, and Environment-protecting Risk. In risk assessment, the thesis concentrates on quantitative dynamic assessment. And in view of these risks, the thesis raises the solution, majored in credit. The thesis also notices that it is hard to utilize the advanced management tools in China and it mainly results from policies, laws, approval, managing skills and some objective conditions. Based on detail analysis, the thesis gives resolutions and relevant suggestions.Though the analysis in this thesis seems superficial, the author just aims at giving an inspiring discussion and promoting the progress in this field.