Research On Risk Management Of Commodity Trade Financing Business Of A Bank Qingdao Branch

Accompanying the open reform, prominent and persistent changes having been occurred in many domains, especially for import and export trade field. China has become the largest trading country in the world and at the same time the largest energy consumer at present. The development in external trading leads China to rank first in export sales. With the gradually rise in international energy prices and stimulated by the four trillion plan in 2009, the commodity trade financing had entered an unprecedented prosperity phase.There had been much price fluctuation in commodity since 2011, which caused capital chain fracture of excessively equity finance commodity customers. The De-zheng incident broke out in May 2014, which raised alarm for credit asset quality of commercial banks in China. Commodity trade financing is the pillar industry in the banks in eastern coastal areas, such as Qingdao. The cases of risk exposure in commodity trade financing demonstrate that there are loopholes and deficiencies in commodity trade financing risk management of China’s commercial banks. To adapt new normal state featuring characteristics of the current development phase of the Chinese economy and maintain a smooth development of credit property quality, it is particularly necessary to strengthen risk management of commercial banks’ credit operations. For export- oriented economy areas, researches on the risk management of commodity trade financing tend to occur.This paper is divided into six parts as follows. The dissertation begins with an introduction in which the significance, background and objectives of the study are discussed, the related literature is reviewed, and also the significance and innovation of this thesis are illustrated in this part. Then in the second chapter, the paper has an overview of theoretical foundation, which involves of international trade theories, commodity trade financing theories, commercial banks’ risk management theories, credit assets risk management theories etc. In the third chapter, this paper elaborates the development status of commodity trade financing in China, commodity trade financing business in A bank Qingdao Branch, risk analysis of such business and the need for risk management. Additionally, based on the case of A bank Qingdao Branch, this paper points out the measures and major constraint on risk management in commodity trade financing in Chapter four. Illustrated by the case of A bank Qingdao Branch, the paper makes a comprehensive analysis of the risk management in real-estate-related commodity trade financing corporations and entrepot trade companies. Lastly, through analyzing and summarizing the research findings both in theories and case mentioned above, this paper puts forward the corresponding measures and development strategy in order to strengthen commodity trade financing risk management in commercial banks.