PRESENTATION:

DETERMINATION OF TRADINGPARTNERS

INTERDEPENDENCE Jasmeet SinghMBA (2 years)2nd Semester

13062110

TRADING PARTNER

]One of the two or more

participants in an ongoing business relationship.

BUSINESS RELATIONSHIP

An association between individuals or companies entered into for commercial

purposes and formalized by legal contract or agreement.

Determination of Trading Partners

There are number of theories that explain why do countries trade with each other. Out of those we can make out that:

- Greater the dissimilarity among countries, the greater the potential for trade. For e.g. Great difference in climate conditions lead to great differentiated products.

- Countries that differed in labor or capital intensities would differ in the types of products they could produce efficiently and differences in innovative abilities affect how production of a product would move from one country to another during product life cycle.

INTERDEPENDENCE

Interdependence describes relationships in which members of the group are mutually dependent on the others.

In trade people and departments must rely on one another to share information, financial resources, equipment and more, making interpersonal communication highly valuable to a company and oneself in order for a successful outcome.

Example : China buys lots and lots of U.S. dollars in order to keep the $ strong and the Yuan low. This means more money for America which, in turn, America buys lots and lots of Chinese products.

INTERDEPENDENCE OF TRADING PARTNERS

• Trade – the exchange of goods or services between countries.

• Imports – goods or services brought into a country from another country.

• Exports – goods or services sent out from a country to another country.

• Balance of trade – the difference between the value of the goods and services that a country exports and the value of the goods and services that it imports.

Canada’s Trading Partners$208 billion $348 billion

$24

$13

$13

$10

$9

$8

$7

$3

TYPES OF INTERDEPENDENCE

• Pooled Interdependence• Sequential Interdependence• Reciprocal Interdependence• Comprehensive Interdependence

THE CHINA & NORTH KOREA RELATIONSHIP

1. China is Korea’s biggest trading partner, main source of food, arms and fuel.

2. China’s support for North Korea in Korea War (1950-53).

3. To support North Korea when Pyongyang tested a nuclear Weapon.

4. Pyongyang is economically dependent on China.

• Support for Pyongyang provides a buffer zone between China and South Korea.

• North Korea’s trading terms and port operations are favorable for China, growing Chinese firms invests there.

THANKS