Research On The Conduction And Prevention Of Exchange Rate Risk Of The International Projects In The Perspective Of Contractors

With the going-global strategy policy,the Belt and Road Initiatives strategy and China's New Normal economical state,the contracting of international projects has been developing rapidly,the contract amount of foreign contracted projects and the turnover of foreign contracted projects showing a rising trend year by year.Contracting international project is a comprehensive business and economic activity among countries in the world,as we all know,international projects tend to concern a large contract sum,long project cycle,foreign currency,as well as have more than one kind of currency.Besides,China's international contracting market is mainly concentrated in Asia,Africa,Latin America and other third world countries or regions,where the economic and political state are often very volatile,unstable,therefore,the exchange rate is unstable,causing greater risk easily.The exchange rate is affected by comprehensive factors,which can only be predicted,not be controlled by contractors.Obviously,the adverse fluctuations may cause the value of currency exchange losses,because international projects involve a large amount of money,so it is easy to bring huge losses to the contractor.However,not all of the initial moments of exchange loss bias will create exchange rate risk,because contractors have a certain exchange rate risk tolerance,so the initial exchange loss bias will be conducted throughout the process of international projects and affected by some factors,until the final risk losses were formed.If we can cut off the conduction process,we can prevent the final loss.Therefore,it is necessary to study the conduction mechanism of the exchange rate risk of the international projects from the perspective of the contractor,which can help contractors figure out the exchange rate risk mechanism as well as provide the support to prevent the exchange rate risk.This paper conducted an in-depth study on exchange rate risk conduction and risk prevention of international projects from the perspective of contractors by using literature analysis method,case study method,questionnaire method,quantitative analysis method,etc.First,it elaborated the conduction mechanism of exchange rate risk combined with the characteristics of international projects.Second,basing on the previous conduction mechanism,it identified the risk list of exchange rate risk of international projects.Third,it putted forward the theoretical conduction paths relying on previous study,after that,it collected the actual data through questionnaire method and used structural equation model to validate and simulate the theoretical conduction paths.Finally,after identifying the building ideas,it built a prevention system of international project exchange rate risk for the contractors.The study shows,the four critical factors of the conduction of international project exchange rate risk: risk source(factors),risk conduction carriers,conduction nodes,risk receiver,are within the conduction paths.This paper identified five types of exchange rate risk factors,four types of risk conduction intermediaries,two types of risk events,one category of risk loss,totally,they formed 69 paths and also can be concluded into 16.And through analysis,it proved that the economic environment factors,contractor capacity factors,project factors were important risk factors.Finally,to prevent the loss of exchange rate risk,and basing on the principle of system,dynamic,risk conduction path blocking and key risk factors focusing.This paper built a prevention system of international project exchange rate risk,consisting of organization system,decision supporting system,centralized funds management system,management system,which can contribute a lot to the risk management of international projects.