国际商务英语chapter1-Introduction-to-International-Trade课件

国际商务英语chapter1IntroductiontoInternationalTrade国际商务英语chapter1Introductionto1Whatisinternationaltrade?Whatistheoriginofinternationaltrade?Whytradewithothernations?Whataretradedinternationally?Howtomeasureinternationaltrade?Whatisinternationaltrade?2Whatisinternationaltrade?Internationaltradeisthefairanddeliberateexchangeofgoodsandservicesacrossnationalboundaries.Internationaltradevs.foreigntradeFreetradeThemovementofgoodsandservicesamongnationswithoutpoliticaloreconomicobstruction.

ProsandConsoffreetrade.Whatisinternationaltrade?In3Internationaltradevs.foreigntradeInternationaltrade,alsocalled“worldtrade”,generallyreferstotheexchangeofgoodsandservicesamongdifferentcountries.Itistheaggregateoftheimportandexportofallthenations.Foreigntradereferstotheexchangeofgoodsandservicesofonecountry(region)withanothercountry(region).Itcomprisestwoparts-importandexport.Internationaltradevs.foreig4ProsandConsofFreeTradeProsTheglobalmarketcontainsover6billionpotentialcustomersforgoodsandservices.Productivitygrowswhencountriesproducegoodsandservicesinwhichtheyhaveacomparativeadvantage.Globalcompetitionandlower-costimportskeeppricesdown,soinflationshouldnotcurtaileconomicgrowth.Opentradeencouragesinnovation,withfreshideascomingfromforeignmarketsUninterruptedflowofcapitalgivescountriesaccesstoforeigninvestments,whichkeepsinterestrateslow.ConsDomesticworkersinmanufacturinglosejobsduetoincreasedimportsorproductionshiftstoglobalmarkets.Workerscanfacepay-cutdemandsfromemployers,whocanthreatenthemwiththepossibilityofsendingjobsabroad.Competitivepressureoftenmakesserviceandwhite-collarjobsvulnerabletooperationsmovingoverseas.Domesticcompaniescanlosetheircomparativeadvantagewhencompetitorsbuildadvancedproductionoperationsinlow-wagecountries.ProsandConsofFreeTradePro5EuropeanFreeTradeZone

TheEuropeanEconomicAreaisthelargestfreetradezoneintheworld.Itcomprisesthe15membersoftheEuropeanUnion(EU),plusIceland,Liechtenstein,andNorway.EuropeanFreeTradeZone

The6NorthAmericanFreeTradeZone

Canada,Mexico,andtheUnitedStatescomprisetheNorthAmericanFreeTradeZone,theworld'ssecondlargestfreetradeareawithmorethan365millionconsumers.NorthAmericanFreeTradeZone7SouthAmericanFreeTradeZoneArgentina,Brazil,Paraguay,andUruguayformMercosur,thelargestfreetradezoneinSouthAmerica.BoliviaandChileareassociatemembersofMercosur.SouthAmericanFreeTradeZone8Whatistheoriginofinternationaltrade?Thestoryofthecavemantakesplaceonaninternationalbasis.Whatistheoriginofinternat9GlobalProductionSwanOpticalDesignManufacturingGlobalProductionSwanOpticalD10GrowthofWorldTradeandWorldOutput1950=100Figure1.11-6GrowthofWorldTradeandWorl11Whytradewithothernations?AdvantagesInternationaltradeleadstomoreefficientandincreasedworldproduction,thusallowingcountries(andindividuals)toconsumealargerandmorediversebundleofgoods.Anationpossessinglimitednaturalresourcesisabletoproduceandconsumemorethanitotherwisecould.theestablishmentofinternationaltradeexpandsthenumberofpotentialmarketsinwhichacountrycansellitsgoods.Theincreasedinternationaldemandforgoodstranslatesintogreaterproductionandmoreextensiveuseofrawmaterialsandlabor,whichinturnleadstogrowthindomesticemployment.Competitionfrominternationaltradecanalsoforcedomesticfirmstobecomemoreefficientthroughmodernizationandinnovation.Whytradewithothernations?12WhyTradeWithOtherNations?

ImportanceSomenationsexportonlytoexpandtheirdomesticmarketortoaideconomicallydepressedsectorswithinthehomeeconomy.Othernationsdependontradeforalargepartoftheirnationalincomeandtosupplygoodsfordomesticconsumption.Inrecentyearsforeigntradehasalsobeenviewedasameanstopromotegrowthwithinanation'seconomy.Developingcountriesandinternationalorganizationshaveincreasinglyemphasizedsuchtrade.WhyTradeWithOtherNations?

13Whataretradedinternationally?MerchandiseExportsandImportsTheyarealsoreferredtoasvisibleexportsandimportsbecausetheirmovementsacrossinternationalbordersarevisibletoobservers.Theyconstituteacruciallinkintheinternationaleconomyandarethemajorsourceofinternationalrevenueandexpenditureformostcountries.ExportsandImportsofservicesTheyarealsoreferredtoasinvisiblesandincludeallsalesotherthanvisiblegoods.Asconsumptionofserviceshasrisensteadilyinrecentdecades,therehasbeenanexplosivegrowthinservicetrade.Tradeinservicesgenerallyrequiresagreaterlevelofcommitmentandsophisticationthanthatrequiredbymerchandisetrade.Thisisbecausetheservicetradeoftenrequirescomponentsoftrainingandtechnologytransferthatdemandsupportfromthevendorovertime.Growthinservicetradeisexpectedtoexceedthatofmerchandisetrade.Givesomeexamplesofeachtype.Whataretradedinternationall14InvisibleTradeRevenueandexpenditureincurredbyexchangeofservicesandothernonmaterialcommodities.Incomeandexpensesconcerningtheimportandexportofcommodities,e.g.freight,premium,processingcharges.Incomeandexpensesirrelevanttotheimportandexportofcommodities,e.g.travelingexpenses,diplomaticagentexpenses,overseasremittances,franchisefees,dividendspaidtoforeigninvestors,etc.Asinvisiblesdonotgothroughcustomsclearance,theyarenotindicatedincustomsstatistics,butonacountry’sstatementofbalanceofpayments.InvisibleTradeRevenueand15Howtomeasureinternationaltrade?ThebalanceoftradeThebalanceoftradeisanation’srelationshipofexportstoimports.Afavorablebalanceoftrade=tradesurplusanunfavorablebalanceoftrade=tradedeficitThebalanceofpaymentThebalanceofpayment=thedifferencebetweenmoneycomingintoacountryandmoneygoingoutofthecountry+moneyflowscomingintoorleavingacountryfromotherfactors.favorablebalanceofpaymentsVSunfavorablebalanceofpaymentsAboutFDIHowtomeasureinternationalt16TheBalanceofPaymentrelationshipbetweentheamountofmoneyanationspendsabroadandtheincomeitreceivesfromothernations.ThebalanceofpaymentsisofficiallyknownastheStatementofInternationalTransactionsandincludestwomainaccounts:Thefirst,thecurrentaccount,tracksactivityinmerchandisetrade—exportingandimporting;incomeearnedfrominvestmentsabroad;moneypaidtoforeigninvestors;andtransactionsonwhichthegovernmentexpectsnoreturns.Thesecond,thecapitalaccount,tracksbothloansgiventoforeignersandloansreceivedbycitizens.Becausethebalanceofpaymentsisonereflectionofanation'sfinancialstabilityintheworldmarket,theInternationalMonetaryFund(IMF)usestheseaccountstomakedecisionssuchasqualifyingacountryforaloan.TheIMFalsoprovidestheinformationtoitsmemberssothattheycanmakeinformeddecisionsaboutinvestmentsandtrade.TheBalanceofPaymentrelation17Thebalanceofpaymentscanbeusedasanindicatorofanation'seconomicstability.Changesinthebalanceofpaymentscanaffecttheexchangerateofacountry'scurrency.Forexample,adeficitinmerchandisetrademeansthatthecurrencyofthatnationisfloodingtheworldeconomy,sinceitisbeingusedtobuytheimportsthatcausethedeficit.Unlessgovernmentcontrolsareused,thevalueofthecurrencywillmostlikelydepreciate.Thebalanceofpaymentscanbe18FDIForeignDirectInvestment(FDI)isthebuyingofpermanentpropertyandbusinessinforeignnations.Itcantaketheformofeitherdirectorportfolioinvestment.Directinvestmentoccurswhenacquisitionofequityinterestinaforeigncompanyismade.Thisinterestmayvarybetweenasmallpercentageandacontrollinginterestofacompany’sequity.(Ownershipofmorethan50%isnotnecessaryinsecuringacontrollinginterestinacompany).Controllinginterestinaforeigncompanyrepresentsahighlevelofcommitmenttoforeignoperationsandisusuallyaccompaniedbypersonnelandtechnologytransfersabroad.Theappealofdirectinvestmentlieswiththeaccesstomarketandresourcesaswellasrationalizationofglobalproductionaffordedbysuchanarrangement.Incontrast,portfolioorindirectinvestments,arechieflymotivatedbyshort-tomedium-termprofits.Theymayincludeequityinvestmentsthatdonotinvolveanactiveroleinmanagementorbondsandotherdebtinstrumentsissuedbyforeigncompaniesandgovernments.Asfinancialmarketsaroundtheworldbecomeincreasinglyintegratedinrecentyears,internationalportfolioinvestmentshavebecomepopularwithinvestorsasavehicleofdiversificationfurtherhasteningtheprocessofinternationalfinancialintegration.More…FDIForeignDirectInvestment(19Foreigndirectinvestmentisthebuyingofpermanentpropertyandbusinessesinforeignnations.Inthe1980s,thesurgeinforeigndirectinvestmentbycountriessuchasJapancausedmuchconcernintheUnitedStates.WhentheJapaneseobtainedAmericanlandmarkssuchasRockefellerCenter,PebbleBeachGolfCourse,andColumbiaPictures,manyAmericansfelttheywerelosingthe“soulofournation.”ThesimplefactwasthatU.S.property,buildings,andcompanystockwereallmoreattractivethancomparablealternativesinothercountries.Inthelate1990s,AmericansbarelyraisedaneyebrowwhenforeigninvestorspurchasedcompaniessuchasChrysler,Amoco(oil),andRandomHouse(publishing).Foreigndirectinvestmentcanbeviewedasasignofstrengthinanation’seconomy.Thetimetoworryiswheninvestorsnolongerfindacountryattractive.Foreigndirectinvestmentist20FDIInflows

1980-1996$B1-11Figure1.4FDIInflows

1980-1996$B1-11Fig21

OftheTop260in1973

OftheTop500in1997

UnitedStates 126(48.4%) 162(32.4%) Japan 9(3.5%) 126(25.2%) Britain 49(18.8%) 34(6.8%) France 19(7.3%) 42(8.4%) Germany 21(8.1%) 41(8.3%)

TheNationalCompositionoftheLargestMultinationals1-12Table1.3 OftheTop260in1973 Ofth22TheReasonsforFDIThedeclineofbarrierstoforeignownershipinmostcountriesoftheworld.Liberali