Research On Exchange Rate Risk Prevention Of Chinese Small And Medium Export Enterprises

Since the Reform and Opening, Chinese small and medium enterprises have developed quickly, playing an increasingly important role in the national economy and making great contribution to the economy increase. Small and medium enterprises play a more and more part in Chinese export trade and have achieved great developments.Since July 21st, 2005, the managed floating exchange rate system which based on market supply and demand and with reference to a basket of currencies had come into force. Now RMB no longer gets tied with the single currency-dollar and the forming system of exchange rate tends to be more flexible. With the development of the financial system reformation, RMB exchange rate heads for marketing. The market leads RMB exchange rate, lots of small and medium enterprises will confront colossal exchange rate risks. During these two years, RMB has increased by 5% every year, bringing great pressure and challenge to small and medium enterprises. As reported by CCTV news, in the first half year of 2008, 670,000 small and medium enterprises have gone bankrupt. If we assume the number of small and medium enterprises is 1,400,000, then it will be 8.5%. Therefore, exchange rate risk has struck to our small and medium enterprises and puts forward a new challenge to them.In international trade, if the enterprises hasn't realized or prevented the exchange rate risk efficiently, they will suffer great losses, especially these small and medium enterprises, whose capacities have a great gap with the risk realization. For them, it is more difficult to master the situation. Researching on small and medium export enterprises, analyzing the current situation of exchange rate risk, aiming at the features of small and medium export enterprises, this thesis puts forward trade finance hedging strategies which are favorable to release capital difficulties of small and medium export enterprises and take advantage of financial derivatives and improve the innovation of small and medium export enterprises. It's hopeful that the thesis can provide valuable theoretical contribution and practical help for the systematic study of the exchange rate risk avoidance of small and medium export enterprises.