Study On Risk Aversion Strategies In Overseas Investment Of Company A

Though China’s economic development is slowing down, in the long run, China will undoubtedly have large needs of resources. Currently, over-exploitation of domestic resources has had huge impact on the natural environment and China’s long-term strategic reserves, and has reached a point where it must be controlled. Based on this background, China has again raised the importance of “Going Out” strategy to a new level. With many international strategies like “One Belt and One Road” and the Asian Infrastructure Investment Bank surfaced, China’s aspiration for overseas resources and international influence has been shown clearly.South American mines have abundant resources with relatively low development level and promising aspects. They have now become the main gold fields of some major mining corporations in Europe and America. Venezuela, in particular, is famous for its rich petroleum resources. It is one of the countries with the most proven oil reserves in the world. It has abundant iron, aluminum, nickel, gold, diamond, and coal reserves, and contains various mineral resources such as copper, lead, zinc, vanadium, titanium, phosphorus, gypsum, feldspar, barite, asbestos, different kinds of clay and rare earth. As Venezuela has strong need for foreign investment especially Chinese investment, Chinese companies can invest with lower standards and can easily get support from both Chinese and Venezuela governments. Therefore investing in Venezuela to mine its quality resources not only suits China’s overall interests, but also meets companies development needs. It is completely applicable. The case study of VS Project(Venezuela Sosa Méndez Gold Mine Project) of this paper is a gold development project in Venezuela by a big state-owned enterprise, Company A. The company also pays close attention to other mineral resources in South America. With practical experience gained from running the project and scientific use of risk aversion techniques, this study is expected to develop a risk factor system and risk level classification based on VS Project of Company A and conduct risk evaluation; the study will also propose detailed risk aversion strategies in overseas investment for Company A based on result evaluations of VS Project risk aversion strategies.The innovations of this study are as follow:(1) based on theoretical analysis and authentic data from Company A, the study proposes risk factors and risk classification plans, as well as risk aversion strategies and implementation safeguard for VS Project;(2) by analyzing VS Project with the proposed plans and strategies, this study verifies the feasibility and reasonability of the proposals and therefore concludes with risk aversion strategies in overseas investment for Company A, which also provides constructive guidance for other related companies’ overseas investment activities.