Lecture X10 Foreign Trade.ppt

Lecture 10 Foreign Trade 5 Outline Brief history of China’s foreign trade. Economic advantages of foreign trade. What determine trade pattern. What determine the exchange rate. Problems of foreign trade from the Chinese and the US points of view Under valuation of the RMB. Recent US – China trade relations Growth of China’s Foreign Trade and China’s major trading partners From 1998 to 2002, the volume of foreign trade almost doubled (Table 17-1). By 2003 the volume of foreign trade increased to 65 percent of GDP and grew at the rate of 35 percent per year. In 2004, the trade volume reached 1.1 trillion US dollars. China became the third largest trading country in the world, next only to the United States and Germany. In 2002 when volume of trade was $620.8 billion, China’s main trading partners were Japan [101.9 billion], the United States [97.2 billion], Hong Kong [69.2 billion], Republic of Korea [44.1 billion], Taiwan [44.6 billion], Germany [27.8 billion], and Europe [112.6 billion]. Volume of Trade: China Statistical Yearbook 2007 Table 18-1 Volume of foreign trade in 2009 had not increased from 2007 Latest News :2009.11.23 ? ? ? ? ? ? ? ? ? ? ? ? Chinas foreign trade to reach US$2 trln in 2009: MOCAug. 13, 2009 (China Knowledge) - Chinas foreign trade has shown positive signs in the first seven months of this year and is expected to reach US$2 trillion for the whole year, said Vice Minister of Commerce Fu Ziying at a press conference in Beijing on Aug. 12. Chinas central government has taken a series measures to boost overseas demand, which currently shows some positive changes. In July.....? From 2003 to 2007 volume of foreign trade in billions of US dollars: 2003 2004 2005 2006 2007 850.9 1154.5 1421.9 1760.4 2173.7 Ricardo’s theory of comparative advantage explains what to trade by the production transformation curve Why Is trade advantageous for both trading partne