The Donghong Trade Credit Risk Management Study

Trade, as one of the three economic driving forces, keeps essential propel on a sustainable economic development. It is forecasted by some research institute, the value of China's foreign trade may outweigh that of United States in the year of 2010, accounting for the biggest share in the world trade volume.The buyers' market prevails in both domestic and foreign trade field. The capacity of a corporate to manage the credit sale composes one of its unavoidably critical success factor.Compared with world-developed countries, China's corporate insufficient awareness of credit risk and immature risk management skill makes the current credit risk a big concern. The risk management skill, a desired enhancement both in business scale and quality and an achievement of a stable long-term customer relationship impose an essential challenge for the corporate and the entire China's trade development.This dissertation is dedicated to the study on the credit risk management and make tentative researches on the followings: firstly, a systematic introduction of the risk management theory is given.Secondly, the author probes China's inadequacy of credit risk management by a comparative approach.Thirdly, the currently-available risk management methods in China, credit insurance and factoring is discussed. Fourthly,the author examines the risk management system and existing problems of a targeted company,Donghong Company. Finally, the author makes strategy research on the targeted copmany's risk management system and a systemic suggestion on the risk management system reconstruction and improvement on credit risk management is therefore made.