Research On The Construction Of Exchange Rate Risk Management System Of Chinese Multinational Corporations

With the economic development and the deepening reform and openingup policy, China’s enterprises have been gradually moving towards the roadof international operations. Multinational companies have been furtherdeveloped and contributed greatly to China’s economic growth.Since China launched the reform of the exchange rate, RMB exchangerate formation mechanism is becoming more flexible,and the more volatilityof RMB exchange rate lead to wide exchange rate risk. Exchange rate riskproblem is China’s multinational corporations bound to face to and tosolve,and it has major impacts on strategic operations of multinationalcompanies, financial soundness and risk management. So that exchange raterisk management based on Chinese enterprises has important theoretical andpractical significance.In this paper,China’s multinational corporations studied as the mainobject, By quantitatived analysis of the sample companies, it observed thatthe exchange rate risk for multinational companies was significant. It alsotold that the status of the exchange rate risk management and the problems inChina’s multinational corporations. We can find management is a systematicproject, Multinational exchange rate risk management systems contain threeaspects:the establishment of exchange rate risk early-warningmechanisms,the improvement of the exchange rate risk management and theproper use of derivatives. It proposed early warning mechanism for theprocess of exchange rate risk, exchange rate risk management process,analysed the VAR method, the net position of management in multinationalexchange rate risk management.Then talked the correct use of financialderivatives under financial tools control, to make sure that China’smultinational corporations can establish a timely, efficient, robust exchangerate risk management.Finally, the paper made a further outlook, Proposed that we shouldgradually liberate the market of interest rate formation mechanism, acceleratethe construction of the financial derivatives market and carry out the strategyof RMB’s going out, And all these will faciliate the implement of theexchange rate risk management, enforce the international competitives ofmultinational corporations.