Chinese Foreign Trade Enterprises, Foreign Exchange Risk Management

With the change of world economy and financial situation, foreign currency exchange rates as an important link of international financial relations and even the normal development of international economic relations, have penetrated into all areas of economic life. China's foreign trade enterprises have more and more strongly perceived the tremendous influence of foreign exchange risk. Therefore, it's of great importance to analyse the impact of foreign exchange risk on foreign trade enterprises in China and to identify appropriate risk management precautions to avoid risks effectively.This article uses the method of theory analysis to study the foreign exchange risk management of foreign trade enterprises in China.First, this paper will systematically explain the Foreign Exchange Risk theory, and argue that China's foreign exchange risk is mainly caused by the changes of RMB exchange rate. According to the accepted theory of industry, foreign exchange risk will be divided into three categories: transaction exposure, accounting exposure and economic exposure.Secondly, this article begins to analyse the impact of foreign exchange risk on foreign trade enterprises. By reviewing the historical changes of China's exchange rate system, found that corporate foreign exchange risk in China is gradually produced with several decades of Exchange Rate System Reform. This paper has explored the impact of foreign exchange risk on foreign trade enterprises from different angles based on the reviewing of various periods in China's exchange rate system and the analysis of the status of the RMB exchange rate risk.Third, this paper shows the status and the immaturity of corperate foreign exchange risk management. By the discussion of the inadequacies it leads to the next chapter– China's foreign exchange risk management. This article holds the opionion that the change of foreign exchange rate is the main cause of corperate foreign exchange rate risk. Thus, the judgement of future's exchange rate is the basis for foreign exchange risk management. According to the judgement, this article puts forwards the foreign exchange risk management responses from 3 aspects: foreign exchange risk under the different categories, different macro and micro perspectives and foreign exchange risk management for the existing problems.Finally,the conclusions further pointed out that in the process of guarding against foreign exchange risk,some subjective and objective issues faced by China's small and medium-sized foreign trade enterprises remain to be further studied and resolved. Therefore,this paper also made recommendations that SMEs should base on self-prevention and must actively study and make use of various prevention measures. At the same time,banking,government and other parties concerned should actively support the development of small and medium-sized foreign trade enterprises.