Ch.1 Introduction

1、 International Economics PART I: International Trade Theory and Policy2018-2019 (1)What is International Economics about?nGains from tradenTrade patternsnTrade policy (and policy effects)nTrade policy coordinationnBalance of payments (国际收支国际收支)nExchange rate determinationnInternational capital marke

2、tPart IPart IITheoriesn Ch.01 Overview of International Trade n Ch.02 Classical Trade Theory n Ch.03 Neoclassical Trade Theory n Ch.04 Post-Hecksher-Ohlin Theory of Trade n Ch.05 Arguments against Free Trade Policiesn Ch.06 Import Protection Policy: Tariffs n Ch.07 Import Protection Policy: Non-tari

3、ff Barriers n Ch.08 Export Promotion and Other Policies International policy coordinationn Ch.09 Regional Economic Integration n Ch.10 GATT & WTO Course Outline 1 Merchandise trade2 Trade in commercial services3 Chinas foreign tradeCh.1 Overview of international trade/pb/ht

4、tps://english/res_e/statis_e/wts_e.htm1 Merchandise Tradel Merchandise trade by major product groupingl Merchandise trade by destination Merchandise trade: visible trade: Go through customs clearance Transactions are observable. Manufactured goods (US$ 11 tn. in 2016)Fuels and mining prod

5、uctsManufactured goods: Iron and steel, chemicals, other semi-manufactures, machinery and transport equipment, textiles, clothing and other consuming goods;Fuels and mining products: Ores and other minerals; fuels and non-ferrous（有色的，非铁的） metals;Agricultural products: Food and raw materials Agricult

6、ural products 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Manufactured goodsFuels and mining productsAgricultural products 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201610%Agricultural products13%Fuels and mining products4%others73%Manufactured goods2% Iron and steel12% Chemicals11

7、% Office and telecom equipment9% Automotive5% Clothing and textiles34% Other manufactured goodsWorld merchandise exports by major product groups, 2016 (Share, %)World merchandise exportsWTO members exports US$ 15.96 tn.US$ 15.71 tn.In 2016Share of developing economies Share of top 10 traders 53%41%E

8、uropeNorth AmericaAsia 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Share of developing economies in world trade, 2000-2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016China, Germany, Japan, Netherlands, United StatesLeading traders in world exports of merchandise trade, 2006-2016

9、 (Indices, 2006=100)Ratio of world merchandise trade volume growth to world real GDP growth, 1981-2016(Annual percentage change and ratio)Definitions and methodologyMerchandise trade (exports & imports): according to general trade definitionGeneral trade: It covers all trade flows including good

10、s shipped through customs warehouses and free zones.Special trade: It excludes certain trade flows, such goods shipped through customs warehouses and free zones.General trade and special trade differs mainly in the way warehoused and re-exported goods are treated. General trade figures are larger th

11、an the corresponding special trade figuresCustoms warehouse (bonded warehouse, 保税仓库): a warehouse in which dutiable (应缴税的) goods are stored without paying the duties on them. If the importer decides to sell the goods for re-export, duties will not be incurred. If the imported goods are released for

12、sale, however, customs duties will come due.Bonded: 交了保证金或提供了担保的Value （额（额/值）值）and volume（量）（量） of international tradeValue of international trade nTotal value of international trade in merchandise and services. Aggregated value of imports or exports ? nAnswer: EXPORTS! As exports of goods are usual

13、ly valued at FOB excluding the cost of transportation and insurance, imports at CIF.Drawback: Value of international trade in different period is incomparable. Price changes.The value of international trade calculated on constant price.Volume（量）（量） of international trade 1978 1979Q0P0Q1P1Steel100 MT

14、$400/MT120 MT$420/MTWood200 M3$5/ M3250 M3$6/ M3Cloth1000 M2$2/ M21200 M2$4/ M2Total valueQ0P0=43,000Q1P1= $ 56,700Total volume (1979) = Q1P0=120*400+250 *5+1200*2 = $51,650Volume index2 Trade in commercial servicesl Trade in commercial services by categoriesl Trade in commercial services by destina

15、tionl Four modes of services defined by GATS Invisible tradenEstimates are obtained by examining foreign exchange records and/or through surveys of establishments (公司，企业公司，企业).nUsual customs records or data are not available for valuing these transactions. Be underestimated or overvalued. 2006 2007

16、2008 2009 2010 2011 2012 2013 2014 2015 2016TravelTransportOther commercial servicesGoods-related servicesWorld exports in commercial servicesWTO members exports in commercial services US$ 4.8 tn.US$ 4.73 tn.In 2016Share of developing economies Share of top 10 traders 53%34%Share of developing econo

17、mies in world trade in commercial services, 2005-2015 (percentage) USA UK China Germany France Netherlands Japan India Singapore Ireland Leading traders of commercial services, 2015 ( bn. US$)n During the 1980s, exports of commercial services outgrew merchandise exports.n Developed economies: servic

18、es account for large portions of GDP.n The United States was the worlds largest exporter and importer of commercial services. WTO GATS four modes of servicesGeneral Agreement on Trade in Services (GATS)Cross-bordersupply 跨境交付跨境交付Consumption abroad境外消费境外消费Movement of natural persons自然人流动自然人流动 Commerc

19、ial presence商业存在商业存在25Mode 1 (Cross-border supply):Mode 1 (Cross-border supply): from the territory of one Member into the territory of any other Member Example:TransportTelecommunicationInsuranceFinancial servicesMode 2 (Consumption abroad)Mode 2 (Consumption Abroad): in the territory of one Member

20、 to the service consumer of any other Member Example:TravelMode 3 (Commercial Presence)Mode 3 (Commercial Presence): by a service supplier of one Member, through commercial presence in the territory of any other Member Example:Financial servicesConsulting servicesEducation servicesMode 4 (Presence o

21、f Natural Persons)Mode 4 (Presence of Natural Persons): by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member. Which mode of supply accounts for most of trade in services? In terms of commercial value, the share of individual modes

22、in world services trade has been estimated. Modes of service delivery Share of individual modes in world services Mode 125-30%Mode 2 10-15%Mode 355-60%Mode 4 2-3 % 3 Chinas Foreign Tradel Merchandise trade and trade in commercial services in 2016l Trade by main commodity groupl Trade by destinationl

23、 Trade balance (particularly with the USA)l Ratio of Chinas merchandise trade to GDPMERCHANDISE TRADE Value Annual percentage change Million US$ 2016 2010-2016 exports, f.o.b. 2 098 161 5 imports, c.i.f. 1 587 431 2 2016 Share in world total exports: 13.5% Share in world total imports: 9.78%TRADE IN

24、 COMMERCIAL SERVICES Value Annual percentage change Million US$ 2016 2010-2016 exports, f.o.b. 207 725 5 imports, c.i.f. 449 833 2 2016 Share in world total exports: 4.31% Share in world total imports: 9.58%ExportsImportsLin, Justin Yifu and Yan Wang (2008). “Chinas Integration with the World: Devel

25、opment as a Process of Learning and Industrial Upgrading”Chinas trade balance Favorable/unfavorable balance of trade (BOT)nThe difference between EXPORT value and IMPORT valuenFavourable BOT: trade surplus, positive balance of trade, EXPORTS IMPORTS.nUnfavorable BOT: trade deficit, negative balance

26、of trade, EXPORTS IMPORTS.nBOT: important part of the current account (经常性账户经常性账户) of a nations balance of payment (BOP)（国际收支平衡表（国际收支平衡表).-100.000.00100.00200.00300.00400.00500.00600.00700.00197519801985199019952000200520102015Balance of trade in China during 1978-2017(billion US$)China trade balanc

27、e in USD billionChina trade balance in USD billionWTO, Trade profiles 2017.nDeterminants of BOT: lThe cost of production in the exporting economy relative to those in the importing economy; lExchange rate movements; lMultilateral, bilateral and unilateral taxes or restrictions on trade; lNon-tariff

28、barriers; lThe availability of adequate foreign exchange with which to pay for imports, etc. lBusiness cycle: e.g. economic expansion. A higher savings rate generally corresponds to a trade surplus. nChina, a high growth economy, has tended to run merchandise trade surpluses. Favorable BOT for nearly two decades in succession since 1994. nThe United States has a lower savings rate and has had a growing deficit in tradable goods since the mid-1980s.nEspecially with Asian nations (China and Japan) which now hold large sums of U.S debt that has funded the consumption of the United