Research Of Management For Exchange Rate Risk In Foreign Trade Enterprises

The reform on formal floating exchange rate regime in China was beginning at July of2005 while the monetary authorities determined the floating exchange rate regime based on the market supply-demand.For this reason,during the daily foreign economic activities China's foreign trade enterprises shall face to the growing exchange rate fluctuation.However,for Chinese enterprises are dealing with foreign trades under relative fixed exchange rate for so long a time,they didn't have the better knowledge on the risk of exchange rate fluctuation and shall have the poor risk consciousness on it,and formed such a conventional wisdom.Basically they are presented as following aspects: 1.paying few attention on the risk,without enough attention on it,there are plenty of foreign exchange exposures;2.due to poor professionalized degree meanwhile the reasons such as institutional configuration,human resource investment,financial cost and lack of risk hedge technology,the foreign exchange risk management risk of Chinese foreign trade enterprises has been limited to the great extent;3.being influenced by the immature development of Chinese financial market,the financial hedge tools on the foreign exchange risk provided by the financial system to the enterprises are still very less,and cannot fulfill the daily demand of the enterprises.Since 2014,the global major economic entities have slowed down their economic growth,on the other hand the major 5 industries of steel,coal,cement,electrolytic aluminum and home appliance were also faced to the situations such as severe excess production capacity,higher real estate inventory,the sharp fluctuation in Chinese stock market and the impeded export etc.Under such changeable global economy new situation of development,our enterprises should be required to make the more rational choice for themselves and cannot mechanically use the previous thinking mode,i.e.such a thinking set that “the things didn't happened before shall not be happened in future” to deal with the foreign exchange risk.This shall be such a wrong concept need to be alerted accordingly during the foreign exchange hedge.At the same time one thing need to be pointed out again is that,the change of foreign exchange shall be indispensable to the basic factors such as the economic fundamentals and international economic estimates,Chineseenterprises shall take the measure accordingly,to select the reasonable foreign exchange hedge tools,so as to let Chinese enterprises remaining invincible among the international competition.There are total 6 chapters in this paper,in chapter one,it interprets the research background and the important significance of the foreign exchange risk management of Chinese enterprises in details,at the same time gives the systematical summary and analysis on those domestic and abroad theoretical literature and opinions,later on to further introduce the study strategy and study approaches accordingly.In chapter two it introduces the relative theoretical foundation for the foreign exchange risk management,and further analyzes the three foreign exchange risks as the risks in trade,conversion and operation.Besides,several mayor factors of exchange fluctuations are demonstrated systematically in the paper.In chapter three combining the current domestic and abroad economic situations and the current situation of foreign exchange market to analyze the fluctuation trend of RMB foreign exchange in China at present,and analyzes the current situations of Chinese foreign trade enterprises on the aspect of foreign exchange risk management and some of serious problems exposed accordingly,meanwhile to imply the urgency of Chinese foreign trade enterprises performing the foreign exchange risk management;in chapter four it introduces three precaution and control measures for foreign exchange risk by the case of YA company;in chapter five,it proposes the corresponding suggestion and improving measures for Chinese foreign trade enterprises performing the foreign exchange risk management from all aspects.