Practice of International Trade[国际贸易实务].pptVIP

Practice ofInternational Trade Li Guo Chapter One:Introduction to International Trade I.What is International Trade? 1) Definition: International trade, also as world trade, foreign trade or overseas trade, is the fair and deliberate exchange of goods and services across national boundaries. It concerns trade operations of both import and export and includes the purchase and sale of both visible and invisible goods. Foreign trade:from the standpoint of a specific country World trade : the sum of each country’s foreign trade Overseas trade: some island countries (Japan ,UK etc.) 2)Characteristic of international trade The fundamental characteristic that makes international trade different from domestic trade is that international trade involves activities across national boundaries. Special problems may arise in international trade that are not normally experienced when trading at home. In particular: ▲Deals might have to be transacted in foreign languages and under foreign laws, customs (cultural shocks) and regulations. ▲Information on foreign countries needed by a particular firm may be difficult to obtain. ▲Foreign currency transaction will be necessary E.g USD,GBP,EURO JPY Exchange rate variations can be very wide and create many problems for international trade. ▲Risk level might be higher in foreign markets. The risks include political risks(of the imposition of restrictions on imports etc); commercial risks(market failure, products not appealing to foreign customers, etc); financial risks(of adverse movement in exchange rates, high rates of inflation reducing the real value of a company’s working capital,and so on);and transportation risks. ▲International managers need a broader range of management skills than do managers who are only concerned with domestic problems. ▲Large amount of important work might have to be left to intermediaries, consultants and advisers. ▲It is more difficult to observe and monitor trends and acti