External Trade

1
Chapter 5

• External Trade

2
What are the differences between external trade
and domestic trade ?
External trade
Domestic trade
Definition
trade between countries/regions
trade within a country/ region
Product design
meet the requirements of export markets
meet the requirements of the local market
Competition
more
less
Transport risk
higher
lower
3
What are the differences between external trade
and domestic trade ?
External trade
Domestic trade
Payment process
more complex
simpler
Currency used
foreign currency
local currency
Language
foreign language
local language
Import and export regulations
yes
no
4
Why does external trade emerge and grow ?
? incapable of self-sufficiency
? specialisation
development of transport systems
? ______________________________
? ________________________________
advanced communication technology
? _________________________
influence of foreign cultures
? ____________________________________________
establishment of international trade organisations
5
How did Hong Kong become an international
financial and trade centre ?
? __________________________
stable government economy
? _________________
sound legal system
? simple tax system
? good location
? __________________________
well-developed infrastructure
? good trade support services
? established trading links
? excellent labour force
6
What are the main categories of Hong Kongs
imports?
fuel
foodstuffs
raw materials semi-manufactures
capital goods
consumer goods
7
What are domestic exports ?
manufactured
Domestic exports are goods _____________ in a
country/region and _________ to foreign countries.
exported
What are the main domestic exports in Hong Kong?
textiles clothing
toys
plastic products
electronic goods
watches clocks
8
What are re-exports ?
imported
Re-exports are goods _________ from one country
or region and then _________ to another country
or region without changing their forms and
functions.
exported
foodstuffs
What types of imports are there in Hong Kong?
capital goods
consumer goods
fuel
raw materials semi- manufactures
9
Which countries / regions are Hong Kongs major
trading partners ?
Imports
The mainland of China
Japan
Domestic exports
The mainland of China
USA
Re-exports (destination)
The mainland of China
USA
Hong Kongs biggest trading partner is
___________________.
the mainland of China
10
What is balance of payments ?
net receipt of money
The balance of payments is the __________________
by a country or a region in a year.
11
How is the balance of payments calculated ?
Balance of payments
Balance of current account
Balance of capital financial account
Balance of visible trade
Balance of invisible trade
Net factor income from abroad
Balance of current transfers
Balance of capital account
Balance of financial account
12
What are the possible cases of overall balance
of trade?
surplus
deficit
? trade ______
? trade _______
? ________ trade
balanced
How is the overall balance of trade calculated?
13
What difficulties does Hong Kong face in external
trade ?
?
?
?
?
?
?
?
14
What are the main types of trade restrictions?
? tariffs
? import quotas
? subsidies
? regulations
? foreign exchange controls
? embargo
15
What are the reasons for against trade
restrictions ?
For
Against
? protect ________ industries
domestic
? lose advantages from ____________
specialisation
? avoid _______________
over-dependence
retaliation
? __________ from other countries
? protect ________ interests
workers
balance of
? maintain _________ ________
? over-protect ________ industries
domestic
payments
foreign exchange
? increase _______________ income
? hurt __________ interests
consumers
? anti-________
dumping
? _______ factors
political
health
? safety ______ considerations
16
What trade restrictions does Hong Kong face ?
?
?
?
?
?
?
?
17
What organisations promote HK's external trade ?
? Trade and Industry Department
HKSAR Government
? Customs and Excise Department
Statutory bodies
? Hong Kong Trade Development Council
? Hong Kong Export Credit Insurance
Corporation
? Federation of Hong Kong Industries
Non-statutory bodies
? Hong Kong General Chamber of Commerce
? Chinese General Chamber of Commerce
? Chinese Manufacturers Association of Hong
Kong
18
What international trade organisations has Hong
Kong joined ?
19
What are the differences between external trade
and domestic trade ?
Products sold abroad must meet the requirements
of the export market.
?
20
What are the differences between external trade
and domestic trade ?
Exports need instructions in different languages
due to language barriers.
21
Visible trade balance
Visible trade is the trade of _____________
between countries.
tangible goods
Balance of visible trade ____________ -
_____________
visible exports
visible imports
Optionsvisible exports / visible imports/
visible re-exports
22
Visible trade balance
Visible trade is the trade of _____________
between countries.
tangible goods
Balance of visible trade ____________ -
_____________
visible exports
visible imports
( _______________ __________ ) -
_____________
domestic exports
re-exports
visible imports
Optionsdomestic exports / visible imports /
visible exports / re-exports
23
Balance of invisible trade
Invisible trade is the trade in _______ between
countries.
services
Balance of invisible trade ________________ -
_______________
invisible exports
invisible imports
Optionsinvisible imports / invisible exports /
re-exports
24
How is the overall balance of trade calculated ?
Overall balance of trade _____________________
_______________________
balance of visible trade
balance of invisible trade
Optionsbalance of visible trade /
balance of invisible trade /
balance of exports / balance of
imports
25
How is the overall balance of trade calculated ?
Overall balance of trade _____________________
_______________________
balance of visible trade
balance of invisible trade
( ________________ __________ - _______ )
( _______________ - _________________ )
domestic exports
re-exports
imports
invisible exports
invisible imports
Optionsdomestic exports / exports / imports /
re-exports / visible imports /
visible exports / invisible imports /
invisible exports
26
What difficulties does Hong Kong face in external
trade ?
To increase competitiveness, manufacturers
practise product diversification.
27
What are the main types of trade restrictions?
A tariff is a tax placed by a country or a region
on _______.
imports
28
What are the main types of trade restrictions?
Import quotas are limits on _______ which a
country or a region imposes on imports.
quantity
29
What are the main types of trade restrictions?
Foreign exchange controls are controls placed by
the government of a country or a region on
_______________.
foreign currency
30
What are the reasons for against trade
restrictions ?
Food imported into Hong Kong must meet health and
safety requirements.
31
What organisations promote HK's external trade ?
The HKSAR Government
? Trade and Industry Department
? carries out governments ____________
trade policies
? grants ________________________ and
___________________
import and export licences
certificates of origin
? Customs and Excise Department
? enforces laws relating to _____________
trade controls
? processes __________________________
import and export documents
32
What organisations promote HK's external trade ?
Statutory bodies
Trade Development Council
? Sets up ________ of manufacturers and exporters
database
33
What organisations promote HK's external trade ?
Statutory bodies
Trade Development Council
? Sets up ________ of manufacturers and exporters
database
? Publishes newspapers and magazines
? Organises __________________, conventions
fairs and exhibitions
34
What organisations promote HK's external trade ?
Statutory bodies
Hong Kong Export Credit Insurance Corporation
? provides _________ protection to exporters
insurance
35
What organisations promote HK's external trade ?
Statutory bodies
Hong Kong Export Credit Insurance Corporation
? provides _________ protection to exporters
insurance
? provides advisory services to companies on the
_______________ of buyers
creditworthiness
? provides market information
36
What organisations promote HK's external trade ?
Statutory bodies
Federation of Hong Kong Industries
? Represents the interests of Hong Kongs
manufacturing industries, and advising the
government on _______________
industrial policies
? Provides a wide range of industry-oriented
activities and services
37
What international trade organisations has Hong
Kong joined ?
World Trade Organization
Objectives
? promotes __________ among countries
free trade
? lowers ______
tariffs
? removes ________________
trade restrictions
38
What international trade organisations has Hong
Kong joined ?
Organisation for Economic Co-operation and
Development
Objective
Improves economic growth by promoting ___________
among countries
co-operation
39
What international trade organisations has Hong
Kong joined ?
Asia-Pacific Economic Co-operation
Objective
free trade zone
Plans to set up a ______________ in the
Asia-Pacific region by 2020
40
What international trade organisations has Hong
Kong joined ?
Asian Development Bank
Objective
Provides _____ to most Asian countries for
large- scale development projects
loans
41
What international trade organisations has Hong
Kong joined ?
The Association of South-East Asian Nations
Objectives
? promotes good relationships among the
countries of ______________
Southeast Asia
? encourages economic growth and promotes
trade