In: Economics
Question #1: Briefly discuss how technological innovation effects the trade activities around the world.
Question #2: Please write a note about major trade agreement of china with rest of world countries and their impact of China GDP (Gross domestic product)
Question #3: How USA president (Trump) decisions effect the trade activities with China.
Question #4: What is the export and import (in Yuan) values of China.
Q.1
Technological Innovation imapcts world trade via shift in modes of transaction, better security, improved supply chain analytics, effective connectivity etc
some recent technological shifts that have been impacting world trade are machine learning and artificial intelligence, mobile/digital payments, block chain, cloud services etc.
Blockchain is making movement of goods more efficient and relaible. It is being used to simplify the long and tedious process of obtaining a Letter of Credit (LoC), a payment mechanism used in international trade.
Artificial intelligence and machine learning has been informing supply chain analytics and other business decisions, advance statistical models and algorithms are being used to do better inventory planning and effective targetted marketing across the globe.
Q.2 Impact of trade agreements on China's GDP
In 2003, China signed the Closer Economic Partnership Arrangement with Hong Kong and Macau. A Free Trade Agreement (FTA) between China and the ASEAN nations came into effect on January 2010, which created the world’s third largest free trade area in terms of nominal GDP. China also made FTA with countries such as, Singapore, Pakistan, Costa Rica, Peru, Australia, New Zealand, and Chile. While FTA's with the Gulf Cooperation Council, Japan, Norway and Sri Lanka are under negotiation.
The opening of the country and the government’s massive investment
programs have prompted the country to become a major manufacturing
hub. The situation fostered trade growth, particularly after China
joined the World Trade Organization in 2001 and it massively
benefited from a steady improvement in its terms of trade.
It has experienced an astonishing growth of 26.9% annually in real goods and services exports during the 2002-2008 period. In 2013, China surpassed the United States as the world’s biggest trading nation.
3.
President Trump's decisions have been to impose and raise tariffs on imports if goods from china. As clear from historical evidence and empirical economic studies, tarrifs lead to a reduction in output, growth and employment.
Imposition of tax barriers reduces imports and negatively affects trade activities with china. These barriers also lead to retaliatory barriers from china, which creates deadweight loss as both the parties fail to capture the economic gain from trade in absence of free trade.
However, with the recent US-China trade deal, tensions are expected to ease for the next two years, as major imports and exports have been agreed on in all the sectors, which is likely to benefit both the countries.
4. Export and Import value of China
Exports - 1.41 trillion yuan
Imports- 1.09 trillion yuan
as per data till April-May, 2020
Hope the answers helped you :)