Risk Management Study of International Co-Production Projects

The International Co-production Project is an important mode of manufacturing globalization:two or more partners jointly invest to manufacture one kind of product, in the manner of cooperation in order to play their respective advantages. China high-speed railway passenger cars’ localization as well as the local manufacture of international brand vehicles has experienced the international Co-production mode. Studying process and method of risk management of the International Co-production Project reserves typical significance, for enhancing the investment management skills to the Chinese Investors. Over this study, the author fulfilled the following major tasks:(1) Adopting literature research and case induction method, the thesis summarized features of the International Co-production Project itself and characters of risk management of the International Co-Production Project; taking into account with the particularity, and according to the general risk management process, the thesis proposed a special risk analysis process for the investment decision-makingstage of the International Co-production Project.(2) Adopting literature research and expert evaluation method, the thesis defined the main risks may occur at the investment decision-making stage of International Co-Production Project; adopting expert evaluation method, the thesis established a risk measurement model and adopting risk allocation calculation based on partners’ investment allocation ratio, the thesis concluded the investment-risk balance analysis calculation for all partners; and the thesis proposed one full set of risk coping strategies for investment decision-making.(3) The thesis selected the case of the International Co-production Project of Air-conditioner compressor between China QA Company and Egyptian ABECO plant in Egypt, to verify the effectiveness of the above proposed risk assessment process and analysis method at the investment decision-making stage.The research result shows the risk management procedure and investment-risk balance algorithm concluded by this thesis, has a certain application value for reference to Chinese enterprises in their risk management process during participating in such kind of Projects.