The Rate Risk Of Our Multinational Company To Face And Prevent Under The Pressure Of RMB Appreciation

Multinational company is playing a more and more important role in the process of globalization. In the process of acting from local market to global market, Multinational companies have become a main role for pushing the economic globalization. The current problem of RMB appreciation is a controversial topic in both domestic and aboard area, meanwhile RMB has to face to the continuing fierce appreciation of international market and political pressure of other countries. Exchange rate risk is the most common and direct of multinational companies when they engage in international product, so the risk prevention is always a very important issue for multinational companies to manage in the process of international operation.This paper contains six chapters. Firstly, it defines relevant concepts about exchange rate risk of multinational companies, which includes Organizational risk management theory, Purchasing Power Parity, Assets Market Approach to the Exchange Rate Determination, Internalization Advantage Theory, and Transaction Cost Theory and so on. Then this paper analyzes the current situation about the exchange rate risk of our multinational companies to face, which includes the summarization about the situation of RMB rate and multinational company management, the economic environment both in domestic and aboard, the influence caused by rate change to multinational companies and the existing problems of the current rate prevention. Three types of rate risk are individually measured, and the VaR model is induced to measure rate risk. After that, this model was calculated and tested, and certain case is applied to use VaR model. Now, the rate prevention management of our multinational companies is not mature yet, so this paper takes examples of American and Japan multinational companies’ management mode, and lists relevant case, then analyzes international specific prevention methods. In the last chapter, this paper proposes concrete political suggestion from macroscopic view and management methods from microscopic view for our multinational companies to prevent rate risk.Firstly, this paper emphases the connection of theoretical and empirical research. It starts from relevant theories, based on which empirical studies begin to actively learn prevention experience from aboard micro-subjects. Secondly, this paper also emphases both measure and case used, which includes the individually measure for each type of rate risk, the use of math model, and the use of specific case.The theoretical meaning of this paper is to promote the research on macro-subjects, which can provide reference and examples for our multinational companies to compete in the international market. The practical meaning is to provide judgment and management standards about rate risk for companies, which can efficiently prevent the rate risk when our multinational companies are engaging in international activities.Under the impact of financial crisis, how to prevent RMB rate risk is not only an unavoidable issue for every multinational company for a very long time, but also is a new topic for theoretical research.