Foreign exchange management system on a few multinational financial management

Abstract: Multinational companies in China, with its advantages of borrowed capital resources in China to earn a profit, but the multinational financial management, subject to foreign exchange management system, while some non-standard financial operations of multinational companies but also to China's foreign exchange management had a negative impact, so multinational corporations in China's foreign exchange management system, how to regulate the conduct of financial management is increasingly important.

Keywords: foreign exchange management, multinational corporations, financial management

First, several multinational financial management problems and countermeasures (a) import and export prices and more stringent measures because of China's foreign exchange management system, so that multinational companies in domestic and foreign market, there are policy barriers to working capital, which led to some detour to avoid measures such as profit by the transfer of internal transfer pricing and tax avoidance. shift the price performance of the form 'high-low', that is the parent company or affiliates from imported materials prices higher than international market prices, export prices below international market price, in this way will the profits of domestic firms to shift overseas if the price of imported equipment is much higher than international market prices, not only inflated the value of fixed assets, depreciation increases, profits decrease, leading to reduction in revenue, and the parent company to achieve more with less investment of dividends and bonuses, will disguise the transfer of profits to the parent company.

Of multinational transfer pricing problem is the weak point of China's foreign exchange for current account transactions such as trade in goods is generally the price after the audit, if found not complying with the approved price of the situation, and then be punished. Basically, the transfer price is a tax problem. Western countries have a special collection of the tax authorities information on the international market price information network, in determining the transfer price has a unique advantage; However, there is still no such network, therefore, foreign exchange management departments should strengthen and taxation, customs cooperation, the establishment of early warning mechanism the price for customs declaration price and the price system, there is a big deviation, the cumulative number of the product should be promptly informed of the larger foreign exchange management and tax authorities in the customs data, based on the combined bank's business purchase and payment materials, through the auditor has audited the accounts of multinational doubt, find the problem.
(B) the financial management problems and countermeasures centralized management of global capital is widely used in recent years, multinational companies, a financial management model, but by China's current foreign exchange management system restrictions, the domestic subsidiary difficult to participate in centralized management, and thus the overall capital lower efficiency, such as the maximum limits in foreign exchange accounts, the corporate real capital income more than $ 30 million, the settlement account to a maximum of $ 7.5 million. This investment of $ 30 million or even billions of dollars of multinational companies, this account limit is not enough. exchange earnings above the limit after only mandatory part of the settlement, and payment Shique insufficient because only their own foreign exchange to purchase foreign exchange, foreign exchange losses increased business risk.

Multinational companies to effectively centralized fund management functions can be taken to disperse the declaration, the receipt and payment of foreign regional headquarters of the mode of operation. That multinational companies import and export, by the regional headquarters of a unified foreign exchange management departments to apply, the application for import and export declarations set out in the list of subsidiaries, and the corresponding internal regulations on imports, by the Foreign Exchange Management Department will review a list of companies after distributed to banks, the banks according to the above list for the regional headquarters for import payment procedures, and finally unified by the regional headquarters for verification and cancellation procedures. exports, according to foreign exchange management department and the list through a subsidiary, the headquarters of receipt by the regional, sub- Foreign Exchange Management Department holding company recognized by the regional headquarters 'receipt notice' or foreign exchange sales statement, verification and cancellation procedures. In addition, foreign exchange management departments should be gradually relaxed the ceiling on the foreign exchange account the requirements of the settlement will achieve the transition to mandatory settlement.
Second, multinational corporations rate risk and countermeasures with the debt crisis, the U.S. debt crisis, the appreciation of the renminbi and other complex international and domestic situation, the uncertainty of exchange rate changes and complexity increase, the forecast exchange rate movements more difficult. Enterprise exchange rate risk will inevitably face the problem.

Companies how to guard against foreign exchange risk?

First, grasp the direction of exchange rate changes. Often concerned about the yuan against the U.S. dollar, euro, yen and other major currencies, exchange rate movements, exchange rate changes periodically analyze trends, to grasp the direction of exchange rate changes and exchange rate movements impact on imports and exports, and enhance the exchange rate forecast capacity.

Secondly, to pass the cost to the customer or manufacturing costs down the face of exchange rate risk, in addition to improving internal management, improve efficiency, enterprises need to take a variety of strategies to shift the exchange rate risk.

1 to floating exchange rate when the contract may be written in the price changes brought about within the terms of the contract.
(2) when using a variety of contract denominated in the currency, such as ways to sell products to foreign credit, or credits to foreign ways to buy products, flexible use in U.S. dollars, euro, yen, etc. Links to free download http://
3 The consultation cost of a fixed exchange rate lock, such as the price of provisions in the contract provisions on the use of a fixed exchange rate, only the future exchange rate fluctuations over a certain range, the price terms can be adjusted according to fluctuations in exchange rates.

4 flexible use of international trade settlement. The common way of international trade settlement payment in advance, documentary letters of credit, with a single collection and credit, etc., each way to avoid exchange rate risks of different functions, need flexibility.

5 advance payment or delayed payment. Enterprises to foreign currency-denominated loans payable or, if the currency is strong currency. The strategies companies can take payment in advance to reduce or avoid foreign exchange losses; if the currency is weak currency, the situation is opposite.

6 apply for trade financing or other credit business.
7 apply for bond business.
8 the use of hedging financial instruments, such as applying for RMB forward exchange settlement and sales of RMB and foreign currency swaps and so on.

Exchange rate risk of their own reason is the risk incentive and debt liability system is not perfect. Decision makers pay more attention to immediate, even if exchange losses, but also put the blame on to the market, debt management, exchange rates and forecasts if opposite, and the persons may be liable, leading policy makers and financial managers to use financial instruments to hedge foreign exchange risks are not enthusiastic. most of the exchange rate risk management due to lack of business professionals in the face of exchange rate uncertainty and complexity nature, simply hold the RMB as the best choice, busy settlement. visible enterprises urgently need to know the exchange rate risk management, enhanced ability to resist risks.

In sum, multinational financial management, can not do without China's foreign exchange management policy, risk control is relative, which is the company's own conditions, operational capacity, in reality, a variety of environmental factors closely related, so companies should have flexibility and use a variety of financial management methods, and in practice constantly sum up experience, to effectively enhance their market competitiveness.

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