Risk Management on China Iron and Steel Enterprises under Deteriorating Economic Circumstances

Entrepreneurial Environment, Assessment At present, the structure of the steel industry is changing more quickly in the whole world. It becomes the situation that the steel enterprises are purchasing extra large scale, high-end products, fine qualities, cleaner production and globalization of resource distribution. This brings serious challenges to Chinese iron and steel industry with low industrial concentration, structural surplus of steel production, strained resources. At the same time, the prices of relative raw materials go on increasing and supply of them is still insufficient. The economic growth at home and abroad is slowing. Chinese export growth is decreasing. The demand on steel will likely go down. Tighter monetary policy has no change. The exchange rate for the RMB rises more quickly. In addition, with the increasingly high requests on environmental quality from the society, the environmental costs of them are increasing. The economical environments where steel enterprises live are worsening. But the risk resistance capacity of Chinese steel enterprises is poor. Most of them have the following problems such as excessive liabilities scale, shortage of working capital and low profitability. Therefore, something must be done for them to perfect their risk management. This paper discusses the methods of strengthening risk management of Chinese steel enterprises from the following ways: optimizing their production structure and production processes, reinforcing their internal audit, strengthening cooperation between enterprises and so on.