July. 2010

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Annual General Meeting of CII is to be held from September 13-18, 2010 in Cardiff City, Wales, United Kingdom.

The article titled Immigration from China – Security Concerns and Opportunities for PIs, written by Hai Yang, President of Steele, was published in the Newsletter April-May 2010 of CII.

The system of SBCS Data Search has been polished based on the problems occurred during the process of operating. Steele will be committed to continuous perfecting the function of its data search system.

 Measures for Supervision and Administration of Local Financial Enterprises (No. 56 [2010]) printed and issued by Ministry of Finance of China, aims to strengthen financial departments’ supervision and administration on local financial enterprises, to regulate their financial behaviors, to prevent occurrence of financial risks and to boost them to develop healthily.

Administrative Measures for the Information Disclosure by Insurance Companies, which were adopted at the Chairman’s executive meeting of China Insurance Regulatory Commission on April 12, 2010, are hereby promulgated and shall come into force on June 12, 2010.

E-Commerce Credit Management Center of China Medium and Small Business Association formally settled down in Shenzhen on June 8, 2010. The center will establish a credit management system on e-commerce enterprises in terms of standard research, technology research and development and practical application.

Enhance Your Consciousness of Risk

China has an old saying, “anything unexpected may happen and man’s fate is as uncertain as the weather”. It can apply to individuals, to family, to enterprises and other organization as well. This “unexpected”, using the economic terms, indicates uncertainty. Just this uncertainty contains various possibilities of occurring risks. The old saying above is actually a kind of gnosis or knowledge about various uncertainties throughout the life that human being has gotten in the natural economy environment, or a kind of risk consciousness automatically formed in the history. This is wisdom of existence.

Nowadays, under the current market economy condition, the internal and external environment that people or organizations face is more complicated and changes faster and deeper then natural economy, therefore, the risks are much more complicated. People think, with the globalization and integration of economy and science and technology quickly changing, a typical large enterprise will encounter up to hundreds of risks. Once getting trapped, your efforts previous will be wasted and you will lose entirely, for instance, the close down of Barings Bank of UK, the bankruptcy of WorldCom and dissolution of Andersen of US were all attributed to that. The same kind of events also happened to China Aviation Oil (Singapore), as well as CNCRC and Rainbow, both of which had lost hugely. From this you can know if enterprise wants to exist and develop, how necessary and important for it to strengthen risk management to succeed and last.

We all know, enterprise’s operation is based on profit, but profit is always along with risk. From a certain meaning, the process of obtaining profit is a process of obtaining victory and profit in risks, and of identifying, confirming, assessing, avoiding, dispersing, transferring or managing risk and obtaining profit from it. No matter how successful and glorious an enterprise had ever been, it, if failed to effectively manage its potential or realistic risk, would be defeated or suddenly die in face of the unexpected fall of risk.
However, enhancing risk consciousness is the premise of strengthening risk management. Practice certifies, enterprises or organizations that have no or lesser risk consciousness is impossible to increase risk management and they behaves as follows: first, unaware of risk in type of fish eating bait, only staring a variety of “bait” and completely neglecting fatal fishhook, the risk, hiding in. Being blinded by lust for money, they are unable to see and conscious of various risks behind profits, which reflects in blindly diversifying and expanding sales volume. Second, although they have blear risk consciousness in the mind, but hold a slim chance of luck, believing they are luckier then others in avoiding risks. Therefore, they do not give less attention to risk management until the risks come and begin to regret. But once the risks pass, they will forget them, and the history will repeat again. Third, they are blinded by successive victory or achievement and limited in part experience and highly estimate their ability in dealing with and defusing risks, which reflects in underestimating enemies and carelessly preparing for risk management’s spirit, material and organization. Until being defeated by the risks, will they wake up, but it’s late. Fourth, as the lack of strict accountability system, some people hold an indifferent attitude to risks, having no risk consciousness, let alone risk management. Fifth, they only think good aspects of things, instead of thinking things may fail or other bad aspects, which they are unwilling to assume. They do not analyze and plan, not prepare for prevention either. All of enterprises that have the behaviors mentioned above are like a fenceless army, whose situation is dangerous and their fate is worrying.

In some time risk is the opportunity. Different from chance favors prepared mind, risk favors unprepared mind. Mind unprepared for risk can not catch chance. To Chinese enterprises in the period of strategic opportunities, they have to enhance risk consciousness, establish risk concept and strengthen risk management if they wants to grab opportunities to exist and develop.

(Forwarded from Internet)
　

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