Since China’s accession to the World Trade Organization, China’s import and export enterprises not only have to face domestic market competition, but also foreign market competition, thus causing the current market competition of enterprises to be much stronger than before. At present, both the macro environment and micro environment have led to many factors affecting the daily operation of import and export enterprises, and the existence of these factors has led to the emergence of many risks in import and export trade, the most typical of which are country risk, exchange rate risk, contract risk, in order to effectively enhance the economic benefits brought about by China’s import and export trade, it is necessary to conduct a comprehensive analysis of these three aspects of risk, so as to put forward Countermeasures to improve our core competitiveness.
International trade import and export risk forecast
(A) Country risk
Country risk mainly refers to the import and export enterprises in the development of international trade, because the exporting country or importing country because of changes in national policies or macroeconomic adjustments, resulting in huge losses in the enterprise economy. Generally speaking, the import and export countries, no matter which side of the country is a major decision change, will cause country risk to the enterprise when international trade. In addition, the customs, the state and other relevant departments for the import and export of products to determine the attitude is also the key to cause country risk.
There are three reasons for the country risk: First, because the trade countries and import and export enterprises have different goals, when their goals are contradictory, these contradictions will lead to import and export international trade risk; Second, in the development of international trade, the trade countries have some unexpected events such as chaos, policy crises, these unexpected situations are also caused by one of the causes of the country risk; Third, the trade country’s economic The third is that the trade country’s economy has problems or has a large mobilization, such as inflation, government intervention, etc. will appear country risk. Country risk is inseparable from national sovereignty. For example, the most common problems encountered by enterprise A in import and export trade are the risk of non-tariff barriers and tariff barriers, which are the most significant.
In addition to economic risk, political risk, social risk, etc., which are the key concerns of enterprises in the development of international trade.
(ii) Exchange rate risk
The exchange rate between countries is not a fixed value, it will change according to the supply and demand situation of the market. Therefore, if the exchange rate of two countries fluctuate or fluctuate more frequently, this situation will bring exchange rate risk to the enterprise. The exchange rate risk in international trade mainly refers to the enterprises participating in foreign trade activities, because of the uncontrollability of the exchange rate changes to the enterprise to bring certain losses. In general, there are three reasons for the exchange rate risk.
One is the exchange rate risk when the enterprise accounting for processing, which can be called the valuation risk; second is the exchange rate risk when carrying out foreign exchange trading activities, which can also be called the foreign exchange trading risk; third is the exchange rate risk arising from the transaction. For import and export enterprises, the exchange rate risk that arises when carrying out trade activities is the one that occurs in the transaction settlement. The enterprise that will have transaction settlement risk applies foreign currency denomination when carrying out trade activities, and the contents included in the national trade are labor and products.
For example, enterprise A is exposed to transaction risk when in June 2015. It entered into an export contract with a Philippine company to export a batch of industrial facilities worth $5 million, while agreeing to settle in September. On the date of signing the contract and settlement, its exchange rate was 1.4 and 1.3, respectively, and by the date of settlement, the enterprise was about to face a loss of RMB 40,000 yuan off, based on an objective perspective, foreign exchange risk has a huge impact on the enterprise’s import and export trade. Foreign exchange risk forecast, the focus is around through the inflation situation, balance of payments, interest rate levels, national macroeconomic system, through this to predict the exchange rate decline or increase, become the main basis for foreign exchange risk control.
(iii) Contract risk
There are many main reasons for contract risk, the most typical reason is the contract signed, due to the problems or defects of the contract itself, causing import and export enterprises to be affected. The contract risks encountered by import and export enterprises are mainly divided into two categories, which include contract terms and trade subjects.
For example, in 2010, Enterprise A signed a contract with an agent of a company in Bangkok through Hong Kong and Macao SAR to purchase a batch of electronic equipment. When Enterprise A received the goods, it was found that there were certain problems with the quality and deviations compared with the samples, and when Enterprise A was ready to make a return application, it was found that the agent had fled with 80% of the payment, which belonged to the risk of fraud of the trade subject. In addition, in 2014, enterprise A in the process of trade, about the letter of credit for the settlement of funds, in December 2014 there was a rare heavy blood, resulting in the arrival of goods has seriously exceeded the expected time, the enterprise requested to postpone the application of the letter of credit loading period and validity, but the other party because the product missed the peak season sales for the reason that the demand for the product However, the other party missed the peak season sales of the product, the price of the product to be lower than the previous 20%, which led to the economic profit of enterprise A was seriously damaged.
International trade import and export risk response
(A) country risk response strategy
Because there are many factors that generate country risk, but most of them are not separated from the historical background, we pay attention to the international macroeconomic level comprehensively, and its main purpose is to effectively analyze the causes of country risk.
Therefore, if we want to avoid the impact of country risk on import and export trade, we need to investigate the national events and news as the main way to prevent the risk, and to effectively prevent the occurrence of country risk, the analysis of country risk is carried out mainly by qualitative methods, and then from the quantitative level, employing the relevant personnel and different investigation methods to explore the probability of country risk. When analyzing country risk, it is important to fully understand the country’s trade policy. Based on the analysis of the importing country’s policy, the most important thing to pay attention to in terms of tariffs is the change of tariffs, which should be fully grasped in the context of analysis and statistics.
In general, the government of the other country will release the tariff changes through statements and other means, our enterprises need to fully understand this information before signing trade contracts with them, and the signed contract should have a certain degree of flexibility, when the signed agreement is encountered when the tariff risk, whether the benefits or losses will be shared by the signing parties. For non-tariff risk, although not accurate judgment, but based on the country’s import and export history records to find the country risk of the generality, and then effectively solve the existence of trade export in the problem.
(II) Foreign exchange risk response strategy
The premise of dealing with exchange rate risk is to choose a favorable currency, so that the two sides to achieve the purpose of win-win, in the import and export trade activities, the two sides need to determine the exchange rate when negotiating, such as based on the payment rate for calculation, or based on the exchange rate when the contract was signed for settlement. If the company does not choose to avoid the settlement and valuation, then it is necessary for both parties to communicate and solve the problem, to choose a new substance to bear or transfer the exchange rate risk, and to sign a loss compensation contract beforehand, and to rely on financial instruments to complete the exchange rate risk analysis.
In the enterprise in the capital turnover problem, need to submit a letter of credit to the bank, mainly based on the enterprise application to the pledge of documents to review, and after this need to advance to the enterprise 90% of the receivables, and then to the issuing bank remittance, which belongs to a typical short-term export financing business. If part of the foreign exchange has a need to protect the value, it is possible to use foreign exchange swaps and forward exchange settlements to lock the exchange rate, amount, term, currency, etc. In addition to the above-mentioned response to exchange rate risk, there are also some new ways? But? The most effective way to solve such risks is to choose products with value preservation performance or to apply structured deposits and forward interest rate swaps, so as to efficiently prevent the occurrence of exchange rate risks.
(iii) Contract risk response strategy
The most common risk of import and export trade risk is the contract risk, and its impact is also the largest. In addition to the legality of the right to import and export, in addition to production and operation licenses and business licenses and other documents, to be carefully checked by the enterprise after these documents, the need to entrust banks or industry and commerce and other channels, the field investigation. In the formal signing of the contract process, you need to carefully check each piece of content in the contract to avoid ambiguous terms, A enterprises in the signing of the contract, you need to fully cooperate in the trade contract for a detailed review, to eliminate the appearance in the contract belongs to the country’s trade terms.
At the same time, different kinds of transportation methods should also be analyzed, and their advantages and disadvantages should be understood in depth. After checking the contents of the contract, the next step can be signed, so as to guarantee that the contents of the contract are fair and just. Finally, in the implementation of trade contracts, it is necessary to arrange personnel with high professional knowledge to control the implementation of the contract, for example, after the delivery of goods, the enterprise needs to build a set of documents to monitor the transportation status dynamically and to facilitate the view of the arrival of the payment, so as to minimize the chance of contract risks.
This paper mainly elaborates on international trade import and export risk prediction and response, there are three typical risks in international trade, which include “country risk”, “exchange rate risk”, “contract risk “, and these risks are not resolved in a timely manner for the import and export enterprises economic interests bring huge losses, so in order to protect the economic benefits of enterprises, from the country risk prevention, exchange rate risk prevention, contract risk avoidance of these three aspects to reduce the frequency of risk in the development of import and export trade, and thus enhance the core competitiveness of our enterprises.