Risk Management Of Overseas Investment Project

Since the economic reform and opening up, the overseas engineering contracting business has been developing rapidly among Chinese enterprises. In recent years, more and more transnational corporations invest both technology and capital into overseas engineering contracting projects. These projects share the characteristics of high investment, irreversibility, long-term operation, variability of environments and earnings, etc. Hence, before the construction of these projects, many transnational corporations have focused their attention on identifying the risk factors during the periods of construction, operation and maintenance, seeking scientific risk assessment model, and making rational risk management plan.This study took as example the construction project of calcium silicate board factory in the Palital Industrial Park in Venezuela, and accomplished the following work:Through literature research and work experience, the author summarized three primary risk factors when investing, constructing, operating and managing a project in Venezuela:national level, market level and project level. The author elaborated the risks at each level.This study adopted two rounds of the Delphi expert scoring method to determine the probability of occurrence of all risk factors for the project and the final score of the degree of impact on the project, and used the internationally recognized risk factor rating scale to identify the key risk factors for the project.Management and control measures were presented for the main risks of the project. In the implementation of the project, such measures were verified and an improved measure form for risk monitoring was made. By continually adjusting and improving the measures, the probability of risks was minimized.The main purpose of this study is to provide Chinese enterprises with a procedure of risk identification, risk assessment and risk coping while participating in a project in the form of investment, and to provide references for Chinese enterprises investing in similar projects in Venezuela or other foreign countries.