§ 4 similarities and differences between international trade and domestic trade

1 same points:

(1)both are exchange of goods and services;

(2)both share similar processes;

(3)both purposes are business profits or economic benefits.

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§ 4 similarities and differences between international trade and domestic trade

2 differences between international trade and domestic trade

(1) international trade is more difficult;

(2) international trade is more complex;

(3) risk of international trade is greater;

(4) impact of international trade is deeper.

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(1) international trade is more difficult

5 reasons:

different languages;

different laws, customs;

more trade barriers than domestic trade;market research is more difficult;

more difficulties in transactions.

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(2) international trade is more complex

5 reasons:

all countries’ currencies, weights and measures vary widely;

complex business practices;

customs systems and other trade rules are different;

complex international exchange;

complex goods transportation and insurance.

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(3) risk of international trade is greater

6 risks:

credit risk;

commercial risk;exchange risk;

transportation risk;price risk;

political risk.

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(4)the impact of international trade is deeper

All the consequences or effects of domestic trade basically stay in the country, often with little influence to other countries. Involving relationships with other countries, usually international trade makes all trade countries to be in different status and to gain different interests.

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Homework ( in PPT )

Choose one from the following topics:

XXX country’s foreign trade analysis;

XXX products international trade analysis.

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