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Help me explain the risks that exporters and importers may encounter in the transaction.
There are many kinds of export risks, which are divided into international risks, domestic risks and force majeure risks according to the environment in which the risks arise. (1) Risks caused by international factors 1. International political risks. Refers to the risks brought to enterprises by political turmoil or policy changes. For example, frequent political changes, political turmoil and regime changes in some countries may affect trade. For example, during the Gulf War, due to the pre-emptive transportation of military materials by various ports, a large number of goods exported to the Gulf region were piled up in ports, which led to the increase of demurrage charges for ships several times, so that the freight rate was much higher than the value of goods. For another example, policies and measures adopted by various countries, such as import and export control policies, anti-dumping laws, import quota systems, countervailing laws, and foreign exchange controls, may also bring risks to enterprises. 2. International economic risks. Refers to the risks brought to enterprises by changes in the international economic situation. Since 1990s, the world's major economic powers have fallen into recession. The recovery is slow, and the economies of many countries in the former Soviet Union and Eastern Europe have fallen sharply in the process of transformation, resulting in the world economy has been sluggish. 1992, the average economic growth rate of western countries is 1.6. In this situation, China's foreign trade export also presents many difficulties, and foreign trade enterprises are facing the risk of shrinking product export market and reducing customer reputation. 3. International legal risks. Refers to the risks brought to enterprises by international practices, regulations formulated by the International Chamber of Commerce or different understandings of trade terms among countries. For example, during the period of 1979- 1982, many foreign trade companies in China adopted the payment method of collection in order to explore the market, trying to attract customers and increase exports with more flexible payment methods. However, many countries in Latin America don't recognize D/P at the time of payment, but treat it as D/A, so that importers can accept and take orders, thus making export companies lose control of the goods and causing many fruit accounts. Refers to the risk caused by insufficient funds and poor performance and trustworthiness of trading partners, which is one of the most important factors causing risk losses in current foreign trade exports. At present, foreign trade enterprises are facing a buyer's market, and only by grasping a customer can they form a transaction, so foreign trade enterprises can easily ignore credit reporting and trust each other, resulting in huge losses. 5. Changes in product demand in the international market, the length of product production cycle, the number of potential and actual competitors, the trend of product price fluctuation, the development of substitute products and whether products meet the standards or special requirements of importing countries will all bring export risks. 6. International exchange rate risk In the international financial market, the exchange rate is constantly changing. Changes in pricing methods of export products and settlement of foreign currency exchange rates will bring risks and losses to enterprises. At present, many foreign trade enterprises in China calculate the export cost according to the market exchange rate, and some even calculate it according to the expected market exchange rate on the date of collection. For example, last year's sharp fluctuations in the price of US dollar swaps caused certain losses to foreign trade enterprises. (b) Export risk caused by domestic factors 1. National policy risk. Mainly refers to the risks brought by the state's adjustment of economic policies to foreign trade enterprises. In the second half of last year, the state carried out macro-control, tightened monetary policy, reduced bank loans and tight funds for foreign trade enterprises, which led to many export contracts not being fulfilled and carried out as scheduled. For another example, the reform of foreign trade system, fiscal and taxation system and foreign exchange system introduced this year will also pose certain risks to the exports of foreign trade companies. 2. Domestic economic risks are risks caused by rising domestic prices and unbalanced regional development. For example, after an enterprise signs a contract with a foreign investor, the increase in production costs (referring to production and export enterprises) caused by the increase in procurement costs (referring to export companies) or the increase in the price of solid materials will cause risk losses. 3. Internal management risk. This is mainly due to the risks brought by improper decision-making or poor management. If the quality, packaging or transportation are delayed due to chaotic management, the risks will recur, the fund management will be lax, and unreasonable funds will take up too much, which will lead to poor turnover and affect exports. This situation is not uncommon in foreign trade companies at all levels. 4. Risks of technological progress. Due to foreign technological progress, domestic products are relatively backward in quality and performance. Modern science and technology are in a period of rapid development. A technical product, if conservative and not enterprising, or ignored, or treated at a reduced price, may be eliminated overnight. This risk should be paid more attention to in technology-intensive products. 5. Enterprise strength risk. Refers to the risks brought to enterprises by the lack of business personnel, weak financial strength and single products. Due to the lack of funds and the low quality of business personnel, foreign trade enterprises naturally find it difficult to carry out business, which leads to risks. Single product and narrow market will also increase the risk coefficient. In addition, the ability of small enterprises to resist risks is also weak (3) The risk caused by abnormal factors is 1. Force majeure risk. Refers to the losses caused to the exporter by the buyer's failure to perform or completely negotiate the contract due to unforeseen, uncontrollable and inevitable accidents of both parties. For example, risks caused by natural disasters, damage to means of transport, etc. 2. Risk of man-made damage. Refers to the risk loss caused by some people's intentional destruction or theft, robbery and other acts.