山东建筑大学双语黄皮书chapter.ppt

Chapter 3 The Economic Environment An Economic Description of Countries Factor conditions/Production factors e.g human resources, physical resources, knowledge resources, capital resources and infrastructure Demand Conditions/market potential e.g the composition of home demand (quality of demand), the size and pattern of growth of home demand (quantity of demand), the internationalization of demand. China OpportunityHuge growing market Countries classified by Income Criteria of the classification GNP (GNI)- the value of all goods and services produced by a country during a one-year period. GDP- the value of goods and services produced by a domestic economy over a one-year period. In other words, when we add to GDP the income generated from exports, imports, and the international operations of a nation’s companies, we get GNI. Purchasing Power Parity (PPP): PPP is the number of units of a country’s currency required to buy the same amounts of goods and services in the domestic market that $1would buy in the United States. Suppose 650 baht in Thailand will buy a bag of groceries that costs $30 in the U.S Thai GNI/capita = 122,277 baht U.S.GNI/capita = 26,980 US$ Exchange rate US$ 1= baht 41.45 122,277/41.45=US$ 2,950 650/30=baht 21.67 122,277/21.67=US$5,643 Human development Index: The index measures a country’s achievements by looking at life expectancy, education, and income per person. Categories of Countries Developing countries (emerging countries): low and middle-income countries Developed countries (industrial countries): high-income countries Transition countries: countries in economic transition to a market transition Low-Income Countries GNI per capita of $875 or less Characteristics Limited industrialization High percentage of population involved in farming High birth rates Low