What Is Global Financial Risk?

International financial risk refers to the fact that during the process of international trade and international investment and financing, due to various unpredictable uncertain factors, the actual returns of participating entities will deviate from the expected returns to a certain extent, thereby causing losses and gains. Opportunity or possibility of additional benefits. ^[1]

International financial risk

visible,

1. Wide range of impact and strong destructiveness.

In order to effectively

Specifically,

International financial risk

First, China's external economic and financial pressures are gradually increasing. Recently, the attitude change of multilateral international institutions is worth noting. They have begun to blame the financial problems of developed countries for causing turbulence in international financial markets and the lack of transparency in financial supervision. However, they gave more affirmation to the economic development of developing countries including China and India. This affirmation has also increased the pressure on the Chinese economy to take responsibility in the future, and it has also caused the outside world to pay close attention to investment and speculative opportunities in China. In fact, the risk of global excess liquidity will cause the risks facing China in the future not to decrease but to rise. Because some current Chinese economic phenomena are somewhat similar to certain characteristics on the eve of the financial crisis in Mexico in 1994, that is, the excessive pursuit and praise of the Mexican economic model and contribution by the international economy and financial institutions. ^[3]

Therefore, when China has been affirmed and praised by international public opinion, including the concern and recognition of China's economic development momentum, the role of economic development, and its leading role in the global economy, China's international public opinion pressure is also expanding. For example, with the depreciation of the US dollar and the appreciation of the Euro, finger-pointing from 13 countries in the euro area to the G7 Great League of Nations, this indicates that China's financial pressure will be more significant in the future.

Second, we must not take lightly the future of China's financial risks. Judging from the current state of China's economic and financial development, although the Chinese economy is still in a relatively high growth cycle, the quality of economic growth has also been rapidly improved. The contribution and impact of China's economic growth on the world economy have received great attention from the outside world. However, at present China is still a developing country, and it is not a country with strong economic development. This is mainly reflected in the fact that the average level of China's economy is lower than that of developed countries, and it is difficult to form a competitive pattern against developed countries in terms of market mechanism, market operation, and market size. These are some of the basic characteristics of the current Chinese economy.

However, it is precisely because of the immature characteristics of the development of the market economy that it is easy to attract external funds to gain more investment returns. From this perspective, the characteristics of easy access to wealth and investment income also provide more opportunities for investment and speculation by external funds. But for developing countries, it means that the future risks they face are increasing. Lessons from developing countries such as Thailand and Mexico are worth learning.

Third, international financial risks are also worth watching out for. At present, the trend of China's economic and financial reform and opening up is difficult to change, and there are signs that domestic and foreign countries are generally optimistic about China's economic growth prospects. However, in the face of large changes in the current international financial market, especially the difficulty in anticipating and managing the global financial product prices caused by the US subprime debt crisis, we should still maintain sufficient rationality in our optimistic expectations.

In this regard, we should rationally understand the opportunities and challenges facing the Chinese economy. For example, the outbreak of the US subprime debt crisis reflects the contradictions and pressures of the US's own economic structure, but economic globalization has prompted this crisis to spread to international financial markets. In this external economic and financial context, how can we formulate targeted policies and strategies to cope with the many challenges that the US subprime debt crisis may pose to China s economic and financial development, according to the requirements of China s economic and financial interests And experience accumulation to achieve China's economic and financial self-adjustment goals. This requires us to recognize the current and future challenges and opportunities facing China's economy and finance from a strategic perspective, see where we stand, grasp our development opportunities, and avoid future risks of uncertainty.