Research On Risk Management In Hebei LY Company' Textile And Clothing Trade Towards Japan

Since the beginning of the reform and opening-up,China's textile industry has developed rapidly,and China has become one of the fastest-growing countries in the global textile industry.With exceptional advantage in labor,raw materials and other aspects,China has become the "world factory".In spite of having promoted the development of China's national economy for a long time,this has also confronted China's textile export industry with a series of risks amid the gradual maturation of the domestic economy and the constant changes of global demands.A growing number of events show that China's textile export industry is facing internal and external troubles,and needs wisdom on the way ahead.Therefore,with Hebei LY Company,a typical small & medium-sized clothing foreign trade enterprise selected from numerous Chinese textile export companies,as target,and its export trade with Japan as scope,this paper will conduct a risk study.On the basis of summarizing the theories of risks and the risk of international trade,this paper studies the basic operation and trade operation of LY,as well as its cases of export trade with Japan.A survey shows that LY exports most of its products to Japan as a children's wear export enterprise,and its total trade volume with Japan and profit margin have declined overall in fluctuations since 2010.The phenomenon has been caused by export restriction,the difficulty in customers' contract performance,the difficulty in the recovery of payment for goods and devaluation,the continuous increase in cost and other factors.After an analysis of the internal and external causes of these factors,it is discovered that,externally,the company is mainly affected by the decline in the overall consumption power of export destinations,the gradual transfer of production bases from China to Southeast Asia,the drastic fluctuation in exchange rates and the rise in overall industrial costs;internally,for lack of the awareness of risk management or practical ability,the company's market is excessively concentrated,and its deficient in credit risk,foreign exchange risk and cost risk management.Therefore,this paper suggests that LY should take corresponding measures for the risk of export restriction,the risk of debt recovery,the risk of payment devaluation,the risk of cost rise and the risk of overall management in light of its internal and external conditions,and implement scientific management measures for market development,credit extension,contract guarantee design,use of foreign currency hedging instruments,product and business model innovation,and overall guarantee.