What are the risks of enterprises' foreign investment?

There are five main risks of enterprises' foreign investment:

(1) Interest rate risk. Refers to the risk that the income of an overseas investment is relatively reduced due to changes in bank deposit interest rates or other investment returns. There are two specific situations in which interest rate risk occurs: first, when the term of foreign investment is not full, the interest rate of bank deposits rises, which may sometimes exceed the interest rate of enterprises buying bonds or the expected rate of return on investment; Second, the interest rate of newly issued securities is higher than that of previously issued securities, and the securities prices of old securities investors will fall. If they can't sell their securities in time or convert them into new securities, they will definitely suffer economic losses and can't get the maximum profit with the same amount of funds.

(2) Price risk. Also called "purchasing power risk" and "inflation risk". This is due to the losses brought to investors by rising prices and inflation.

(3) Market risk. It refers to the risk that investors can't realize the expected return due to objective factors such as political factors, natural disasters and human subjective factors.

(4) Foreign exchange risk. Refers to the impact of exchange rate changes on the assets, liabilities, income and expenses of enterprises denominated in foreign currencies.

(5) Decision risk. This kind of risk refers to the enterprise's wrong decision-making or poor management in foreign investment, which leads to the operating loss or even bankruptcy of the invested enterprise and affects the investment principal and interest that the enterprise should receive.