国际商务英语chapter1IntroductiontoInternationalTrade精课件

1、Chapter 1 Introduction to International TradeWhat is international trade?What is the origin of international trade?Why trade with other nations?What are traded internationally?How to measure international trade?What is international trade?International trade is the fair and deliberate exchange of go

2、ods and services across national boundaries.International trade vs. foreign trade Free trade The movement of goods and services among nations without political or economic obstruction. Pros and Cons of free trade.International trade vs. foreign tradeInternational trade, also called “world trade”, ge

3、nerally refers to the exchange of goods and services among different countries. It is the aggregate of the import and export of all the nations. Foreign trade refers to the exchange of goods and services of one country (region) with another country (region). It comprises two parts - import and expor

4、t.Pros and Cons of Free TradeProsThe global market contains over 6 billion potential customers for goods and services.Productivity grows when countries produce goods and services in which they have a comparative advantage.Global competition and lower-cost imports keep prices down, so inflation shoul

5、d not curtail economic growth.Open trade encourages innovation, with fresh ideas coming from foreign marketsUninterrupted flow of capital gives countries access to foreign investments, which keeps interest rates low.ConsDomestic workers in manufacturing lose jobs due to increased imports or producti

6、on shifts to global markets.Workers can face pay-cut demands from employers, who can threaten them with the possibility of sending jobs abroad.Competitive pressure often makes service and white-collar jobs vulnerable to operations moving overseas.Domestic companies can lose their comparative advanta

7、ge when competitors build advanced production operations in low-wage countries.South American Free Trade Zone Argentina, Brazil, Paraguay, and Uruguay form Mercosur, the largest free trade zone in South America. Bolivia and Chile are associate members of Mercosur.What is the origin of international

8、trade?The story of the caveman takes place on an international basis.Global ProductionSwan OpticalDesignManufacturingGrowth of World Trade and World Output1950=100Figure 1.11-6Why trade with other nations? AdvantagesInternational trade leads to more efficient and increased world production, thus all

9、owing countries (and individuals) to consume a larger and more diverse bundle of goods. A nation possessing limited natural resources is able to produce and consume more than it otherwise could. the establishment of international trade expands the number of potential markets in which a country can s

10、ell its goods. The increased international demand for goods translates into greater production and more extensive use of raw materials and labor, which in turn leads to growth in domestic employment. Competition from international trade can also force domestic firms to become more efficient through

11、modernization and innovation.Why Trade With Other Nations?ImportanceSome nations export only to expand their domestic market or to aid economically depressed sectors within the home economy. Other nations depend on trade for a large part of their national income and to supply goods for domestic cons

12、umption. In recent years foreign trade has also been viewed as a means to promote growth within a nations economy. Developing countries and international organizations have increasingly emphasized such trade.What are traded internationally?Merchandise Exports and Imports They are also referred to as

13、 visible exports and imports because their movements across international borders are visible to observers. They constitute a crucial link in the international economy and are the major source of international revenue and expenditure for most countries.Exports and Imports of services They are also r

14、eferred to as invisibles and include all sales other than visible goods. As consumption of services has risen steadily in recent decades, there has been an explosive growth in service trade. Trade in services generally requires a greater level of commitment and sophistication than that required by m

15、erchandise trade. This is because the service trade often requires components of training and technology transfer that demand support from the vendor over time. Growth in service trade is expected to exceed that of merchandise trade. Give some examples of each type.Invisible Trade Revenue and expend

16、iture incurred by exchange of services and other nonmaterial commodities.Income and expenses concerning the import and export of commodities, e.g. freight, premium, processing charges.Income and expenses irrelevant to the import and export of commodities, e.g. traveling expenses, diplomatic agent ex

17、penses, overseas remittances, franchise fees, dividends paid to foreign investors, etc. As invisibles do not go through customs clearance, they are not indicated in customs statistics, but on a countrys statement of balance of payments.How to measure international trade?The balance of trade The bala

18、nce of trade is a nations relationship of exports to imports. A favorable balance of trade = trade surplus an unfavorable balance of trade = trade deficitThe balance of payment The balance of payment = the difference between money coming into a country and money going out of the country + money flow

19、s coming into or leaving a country from other factors. favorable balance of payments VS unfavorable balance of paymentsAbout FDIThe Balance of Paymentrelationship between the amount of money a nation spends abroad and the income it receives from other nations. The balance of payments is officially k

20、nown as the Statement of International Transactions and includes two main accounts: The first, the current account, tracks activity in merchandise tradeexporting and importing; income earned from investments abroad; money paid to foreign investors; and transactions on which the government expects no

21、 returns. The second, the capital account, tracks both loans given to foreigners and loans received by citizens. Because the balance of payments is one reflection of a nations financial stability in the world market, the International Monetary Fund (IMF) uses these accounts to make decisions such as

22、 qualifying a country for a loan. The IMF also provides the information to its members so that they can make informed decisions about investments and trade.The balance of payments can be used as an indicator of a nations economic stability. Changes in the balance of payments can affect the exchange

23、rate of a countrys currency. For example, a deficit in merchandise trade means that the currency of that nation is flooding the world economy, since it is being used to buy the imports that cause the deficit. Unless government controls are used, the value of the currency will most likely depreciate.

24、FDIForeign Direct Investment (FDI) is the buying of permanent property and business in foreign nations. It can take the form of either direct or portfolio investment. Direct investment occurs when acquisition of equity interest in a foreign company is made. This interest may vary between a small per

25、centage and a controlling interest of a companys equity. (Ownership of more than 50% is not necessary in securing a controlling interest in a company). Controlling interest in a foreign company represents a high level of commitment to foreign operations and is usually accompanied by personnel and te

26、chnology transfers abroad. The appeal of direct investment lies with the access to market and resources as well as rationalization of global production afforded by such an arrangement. In contrast, portfolio or indirect investments, are chiefly motivated by short- to medium-term profits. They may in

27、clude equity investments that do not involve an active role in management or bonds and other debt instruments issued by foreign companies and governments. As financial markets around the world become increasingly integrated in recent years, international portfolio investments have become popular wit

28、h investors as a vehicle of diversification further hastening the process of international financial integration.MoreForeign direct investment is the buying of permanent property and businesses in foreign nations. In the 1980s, the surge in foreign direct investment by countries such as Japan caused

29、 much concern in the United States. When the Japanese obtained American landmarks such as Rockefeller Center, Pebble Beach Golf Course, and Columbia Pictures, many Americans felt they were losing the “soul of our nation.” The simple fact was that U.S. property, buildings, and company stock were all

30、more attractive than comparable alternatives in other countries. In the late 1990s, Americans barely raised an eyebrow when foreign investors purchased companies such as Chrysler, Amoco (oil), and Random House (publishing). Foreign direct investment can be viewed as a sign of strength in a nations e

31、conomy. The time to worry is when investors no longer find a country attractive. FDI Inflows1980-1996$B1-11Figure 1.4Of the Top 260 in 1973Of the Top 500 in 1997United States126 (48.4%)162 (32.4%)Japan9 (3.5%)126 (25.2%)Britain49 (18.8%)34 (6.8%)France19 (7.3%)42 (8.4%)Germany21 (8.1%)41 (8.3%)The National Composition of the Largest Multinationals1-12Table 1.3The Reasons for FDIThe decline of barriers to foreign ownership in most countries of the world.Liberalization of trade and financi