国际商务英语chapter1-Introduction-to-International-Trade[精]课件.ppt

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”,generall

3、y 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 export.Pros and Con

4、s 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 should not curtail e

5、conomic 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 production shifts to glob

6、al 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 advantage when competitor

7、s 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 trade?The story of the

8、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 allowing countries(and indiv

9、iduals)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 sell its goods.The increased i

10、nternational 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 modernization and innovation.Why

11、 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 consumption.In recent years foreign t

12、rade 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 visible exports and imports becaus

13、e 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 referred to as invisibles and include

14、 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 merchandise trade.This is because the se

15、rvice 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 expenditure incurred by exchange of services and

16、 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 expenses,overseas remittances,franchise fees,divide

17、nds 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 balance of trade is a nations relationship of exports to imp

18、orts.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 flows coming into or leaving a country from other factors.favorable b

19、alance of payments VS unfavorable balance of paymentsnAbout 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 known as the Statement of International Transactions and includes t

20、wo 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 returns.The second,the capital account,tracks both loans given to forei

21、gners 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 qualifying a country for a loan.The IMF also provides the information to its m

22、embers 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 rate of a countrys currency.For example,a deficit in merchandise trade means that

23、 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.FDIForeign Direct Investment(FDI)is the buying of permanent property and business in f

24、oreign 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 percentage and a controlling interest of a companys equity.(Ownership of more than 50%is not n

25、ecessary 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 technology transfers abroad.The appeal of direct investment lies with the access to market and r

26、esources 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 include equity investments that do not involve an active role in management or bonds and other debt in

27、struments issued by foreign companies and governments.As financial markets around the world become increasingly integrated in recent years,international portfolio investments have become popular with investors as a vehicle of diversification further hastening the process of international financial i

28、ntegration.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 much concern in the United States.When the Japanese obtained American landmarks such as Rockefeller Cen

29、ter,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 more attractive than comparable alternatives in other countries.In the late 1990s,Americans barely raised an eyeb

30、row 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 economy.The time to worry is when investors no longer find a country attractive.FDI Inflows1980-1996$B1-11Figure 1.4Of th

31、e 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 mos

32、t countries of the world.Liberalization of trade and financial marketsDecline in transportation and communication costs that resulted from technological breakthroughs.The Reactions to FDI FDI has historically been controversial,especially in the receiving countrys point of view.Radical viewsMiddle-g

33、round viewsPositive viewsRadical views:(This has to do with the experience of many former colonies of the Western industrial countries.)Contractual terms based on unequal bargaining situations.Create dependence of the emerging country on the market knowledge and technology of the foreign investor.nM

34、iddle-ground views:welcome the technology and skills transfer but watchful to avoid some of the costs.(e.g.the loss of influence as decisions are made abroad regarding the dismissal of workers or the closure of a plant.)nPositive views:encourages free trade;transfers new technologies;serves as a channel for local firms to internationalize indirectly;generates positive spillover of ideas,including opening of new channels of information flows;increases competition,hence innovation and productivity.