Risks

9 Months Ended

Sep. 30, 2019

Risks

10. Risks

A.	Credit risk
	The Company’s deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss of the banks become insolvent. Since the Company’s inception, the age of account receivables has been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers.
B.	Interest risk
	The company is subject to interest rate risk when short term loans become due and require refinancing.
C.	Economic and political risks
	The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.
	The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
D.	Environmental risks
	The Company has procured environmental licenses required by the PRC government. The Company owns a water treatment facility to process water used in its production process. The Company also has secured channels to safely transport wastes off production sites. Also, the Company is covered by insurance for environmental-related damages.
E.	Inflation Risk
	Management monitors changes in price levels. Historically inflation has not materially affected the Company’s financial statements. However, significant increases in the price of raw materials and labor that cannot be passed to the Company’s customers could adversely affect the Company’s results of operations.