Слайд 1lnternational Marketing
Chapter 3
The Global Economic Environment
Слайд 2The economic environment
Regional economic
Слайд 3A. The Economic environment
Economic environment is major determinant of
global
market potential & opportunity.
The global economic environment plays a large
role
in the development of new markets for
organizations.
Слайд 4Economic factors
The World Economy
It refers to
the economy of the world, comprising of different economies of
individual countries, with each economy related with the other in one way or another.
In the past years the global economy has changed rapidly. Particularly marked has been the development of world economic integration and standardised products.
Слайд 5The World Economic Forum is an independent international organization committed
to improving the state of the world by engaging business,
political, academic and other leaders of society to shape global, regional and
industry agendas.
Слайд 6"Improve the State of the World:
Rethink, Redesign, Rebuild"
Слайд 8Li ke qiang stated China's policies on increasing domestic demand,
readjusting economic structure
and transforming the economic growth
pattern.
As a responsible big developing country, China will remain steadfast on the path of peaceful development and work with other countries in a joint endeavor to build a harmonious world of enduring peace and common prosperity.
Слайд 112. Economic systems
Foreign countries often will have different
economic systems from the domestic market and adjustments often need
to be made to take these differences into account.
3 main types of economic systems:
Market economy(Capitalist)
Planned economy(Socialist)
Mixed economy(Mixed)
Слайд 12Market economy(Capitalist)
A country may operate in a market economy
where private individuals own most of the property and operate
most of the businesses.
A market economy is usually the best economic environment for a foreign business because of the protection of private property and contract rights.
Слайд 13The essential feature of a market economy is the total
freedom of individuals and businesses to choose from between an
array of goods and services according to their tastes and preferences.
The decisions of what to produce, whom to produce for in a world of limited resources, are addressed by the forces of the market, namely the supply and demand of a particular commodity in question.
Слайд 14Planned economy(Socialist)
The state controls macro-economic policy and entrepreneurial activity.In
other words, there is state control of the factors of
production and centralized, state planning—what to produce, how to produce it, and who to produce it for—but with some freedom for individual decisions, like which job to take.
Operating businesses in this environment will be more difficult
Слайд 16Mixed economy(Mixed)
A degree of private economic freedom mixed
with a degree of government regulation of markets.
Most mixed economy can be described as market economy with strong regulatory oversight, in addition to having a variety of government-sponsored aspects.
Слайд 173. Stages of Economic Development
High-Income Countries
Upper-Middle-Income Countries
Lower-Middle-Income Countries
Low-Income Countries
Слайд 18High-Income Countries
GNP per capita above $9,656
Importance of service
sector, information processing and exchange, and intellectual technology
Knowledge as key
strategic resource
Orientation toward the future
Слайд 19Upper-Middle-Income Countries
GNP per capita between $3,126 to $9,655
Rapidly
industrializing
Rising wages
High rates of literacy and advanced education
Lower wage costs
than advanced countries
Argentina, Brazil, Mexico, South Africa
Слайд 20Lower-Middle-Income Countries
GNP per capita between $786 and $3,125
Early
stages of industrialization
Cheap labor markets
Factories supply items such as clothing,
tires, building materials, and packaged foods
Poland, Turkey, Indonesia
Слайд 21Low-Income Countries
GNP per capita of $785 or less
Limited
industrialization
High percentage of population involved in farming
High birth rates
Low literacy
rates
Heavy reliance on foreign aid
Political instability and unrest
Слайд 22High
Upper-middle
Lower-middle
low
Canada
Brazil
Cuba
Finland
Ukraine
Nepal
China
Thailand
Слайд 24Group of Twenty Finance Ministers
and Central Bank Governors
The
G20 is the leading international cooperation forum, focusing on the
most important international economic and financial issues.
It was formally established in September 1999
Слайд 25
Argentina Australia Brazil Canada China
France Germany
India Indonesia Italy
Japan Mexico Russia S.Arabia
Turkey UK US UN South Korea South Africa
Слайд 26 Argentina, Australia, Brazil, Canada, China, France, Germany, India,
Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi
Arabia, South Africa, Turkey, the United Kingdom, the United States of America
+
European Union
(represented by the President of the
European Council and by
Head of the European Central Bank)
Слайд 27G20 members represent almost:
90% of global GDP.
80% of international global-trade.
2/3
of the world's population lives in G20 member countries.
84% of
all fossil fuel emissions are produced by G20 countries
Слайд 28The objectives of the G20 refer to:
Policy coordination between its
members in order to achieve global economic stability, sustainable growth;
Promoting
financial regulations that reduce risks and prevent future financial crises;
Modernizing international financial architecture.
Слайд 29Once it became a venue for the meetings of heads
of states and governments, the G20 has been considered a
major mechanism for international economic cooperation, regulating financial markets and influencing global economic policy.
ALSO.The G20 maintains close relationship with formal international organizations, such as the International Monetary Fund , the World Bank, the Organization for Economic Cooperation and Development , the World Trade Organization , the United Nations and International Labor Organization regularly take part in G20 meetings.
Слайд 304. Purchasing Power of currency
It is the number
of goods or services that can be purchased with a
unit of currency.
Purchasing power is important because all else being equal, inflation decreases the amount of goods or services you'd be able to purchase.
Слайд 31The more goods and services that can be purchased with
the same amount of money in any form.the higher the
purchasing power of the individual.
It is all about receing the most benefit without incurring any additional expense.
RMB :1000(2005)- 576(2013)
Слайд 33Discussion Time
Why appreciate? Who will benefit from it?
How about the
disadvantages?
Слайд 34Why appreciate?
External:
Countries like Japan .US
and EU countries are pressing China hard to adjust its
exchange rates to push the yuan value higher.
They expect to reduce their trade deficit with China through yuan appreciation. And they hope that the RMB appreciation would help ease their domestic inflation pressure.
Слайд 352. Internal:
It would benefit China's imports of products . imports
of raw materials, energy, technology, equipment and other products.
Consumer in
china just spend a little money and even the same price you can easily buy high-quality high-end imported goods .Better for traveling overseas or studing abroad.
Слайд 36It will help rebalance China's economic growth structure from reliance
on exports to domestic demand. the producers focus less on
exports markets. Rather, they will concentrate more on the domestic market.
Allowing the currency to rise modestly can help contain inflation.
Слайд 37Disadvantages
The domestic market increased competition. more imported goods into the
domestic market with lower price. Lack of independent innovation, not
grasped the core technology, relying on low-cost domestic SMEs will fall into a very difficult situation, seriously affected the development of national enterprises.
Слайд 38It would facilitate imports of agricultural products, which would be
disastrous for China's more than 500 million farmers. leading to
more job losses.
If the yuan appreciates against the dollar, expectations of further gains in the value of the yuan would lead to increased capital inflows, which would bring financial instability and would endanger China's financial security.
Foreign demand for China goods will reduce as they get more 'expensive'.
Слайд 39B. Regional Economic
Asia(China.Japan...) & Oceania
North America(US) &
Latin America
Europe ( France.UK...) & North Africa
Слайд 41 Asia-Pacific Economic Cooperation
APECwas
established in 1989 in response to the growing interdependence among
Asia-Pacific economies.
It has become the primary regional vehicle for promoting open trade and practical economic cooperation. Its goal is to advance Asia-Pacific economic dynamism and sense of community.
Слайд 42APEC has 21 members:
Australia; Brunei; Canada; Chile; People's
Republic of China; Hong Kong, China; Indonesia; Japan; Republic of
Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Viet Nam.
Слайд 43APEC has worked to reduce tariffs and other trade barriers
across the Asia-Pacific region . creating efficient domestic economies and
dramatically increasing exports. APEC also works to create an environment for the safe and efficient movement of goods, services and people across borders in the region through policy alignment and economic and technical cooperation.
Free and open trade and investment helps economies to grow, creates jobs and provides greater opportunities for international trade and investment.
Слайд 44How important is APEC to China?
China seems to accept that
APEC is important to its overall economic relations with the
rest of the world.
The APEC region accounts for more than 70% of China's global trade, and a much higher percentage of its foreign capital inflows.
Слайд 45Since it joined, China has reduced its general tariff rates
for imported goods from APEC members from nearly 40% in
1991 to 9.8% by the end of 2010.
In addition to this, China created a US$10 million “APEC cooperation fund” to encourage and support Chinese enterprises to participate in APEC economic and technical cooperation, including education for Chinese companies looking to develop business and invest in other APEC.
Слайд 46“China will firmly uphold regional peace and stability and help
cement a foundation for a win-win situation in the Asia-Pacific”
, President Xi Jinping told an APEC business forum, as he emphasized his country was the biggest trading partner and export market for many nations in the region.
Слайд 49North American Free Trade Agreement(NAFTA)
In 1994, NAFTA came
into force.It’s a agreement between Canada, the US, and Mexico.
It removes many international trade barriers like tariffs.quotas and export subsides.
The agreement involve Market Access for Goods.Protection for Foreign Investment .Protection for Intellectual Property .Easier Access for Business Travelers.Access to Government Procurement
Слайд 50It created the world's largest free trade area, which now
links 450 million people producing $17 trillion worth of goods
and services.
2 developed countries + 1 developing country
Why?
Слайд 51Today, the NAFTA partners
exchange about US$2.6 billion
in merchandise
on a daily basis with each other.
That’s about US$108
million per hour.
Слайд 52Since NAFTA came into effect, Canada-U.S. merchandise trade has more
than doubled while trade between Mexico and the U.S. has
more than quadrupled.
It has helped to stimulate economic growth and create jobs. Furthermore, NAFTA has provided businesses with better access to materials, technologies, investment capital, This has helped make their businesses more competitive.
Слайд 55 The European Union (EU) is an economic and
political union of 27 member states which are
located primarily in Europe.
The EU has developed a single market through a standardised system of laws which apply in all member states. EU policies aim to ensure the free movement of people, goods, services, and capital,and maintains common policies on trade,agriculture,regional development.
Слайд 56 Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
Слайд 57Common external tariff on all goods entering the market. Once
goods have been admitted into the market they cannot be
subjected to customs duties, discriminatory taxes or import quotas, as they travel internally.
Free movement of capital is intended to permit movement of investments such as property purchases and buying of shares between countries.
Слайд 58Free movement of persons means that EU
citizens
can move freely between member states
to live,
work, study or retire in another country.
Free movement of services and of establishment allows self-employed persons to move between member states in order to provide services on a temporary or permanent basis.
The euro has become the second reserve currency in the world.
Слайд 60Summary
The economic environment involves the world economy. economic systems.stages of
economic development and purchasing Power of the currency
Regional economic :
Asia & Oceania (APEC). North America & Latin America(NAFTA) and Europe & North Africa (EU)
Слайд 61Reference
http://www.weforum.org/en/
世界经济论坛官方网站
http://www.g20.org/ (G20)
http://www.apec.org/ (APEC)
http://europa.eu/index_en.htm (欧盟)
http://www.chinadaily.com.cn/bizchina/
Слайд 62Summary
The political environment: Type of government. Party system. Economic policy
of the government. Political stability.Political relations between home and host
countries
The legal environment: The domestic laws of your home country.The domestic laws of each of your foreign markets.International law in general