Foreign Trade Knowledge

Nowadays, the most of people begin to sell and purchase from oversea market through related B2B online platform and international terms (International Rules for the interpretation of Trade Terms) because of its advantage of price from oversea sourcing, advantage of quality. The most of businessman or companies purchase from Asia area such as China, India and Korea to content own companies’ demand and development. Certainly, Foreign trade still get some risk when you buy from over suppliers because of its far distance. Normally the buyers cannot inspect the production; shipment through sea facing many risk of products loss; dispute uneasy to be solved after receiving the goods as flaw and substandard. So hereby, I hope the most of businessman should be skilled to grasp foreign trade knowledge.

Introduction

Foreign trade is also called international trade or importing and exporting trade, shortcut as foreign trade. It refers to the exchange of goods, services and technology between one country (region) and another country (region). This trade consists of two parts: import and export. For the countries (regions) that import goods or services, we call imports; for countries (regions) that export goods or services, we call exports. After know of foreign trade concept, by next links let me explain other two concepts as competition of price, non-competition of price.

 

Basic Concept

Price Competition

Price Competition (Rate war) is simple to know that normally expanding the oversea market, seeking channels, beating rivals must be depended on price. Bargain price is the good choice for exporters and suppliers. When the products’ performance, effect, design and related service are extremely same by manufacturing through both of countries (or enterprises), the enterprises manufactured products will sale its products by lower price than rival’s. Undoubtedly, the enterprises are plunged into vicious price competition.

 

Non-price Competition

it refers to a form of competition in which a product is sold and participates in the market competition by means of non-price forms such as tangible and intangible differences of products, sales services, advertising and other means of promotion, etc., besides the price of the product or when the selling price remains unchanged.

 

Trade Dependence Ratio

The trade dependence ratio is also known as the “foreign trade coefficient”. A country’s Dependence On Trade is generally expressed in terms of the proportion of the total import and export value of foreign trade in the gross national product, GNP (or gross domestic product, GDP). That is, trade dependence = total of foreign trade / GNP. The change of proportion implies the change of the position of foreign trade in the national economy.

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