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Chapter 02

Development and Role

of International Trade

LOGO

Chapter 02 Development and Role

of International Trade

contents

§1 international trade & economic development

§2. international trade’s sustainable development

2

§1 international trade &

economic development contents:

1.economic growth & economic development

2.foreign trade’s effects on economic development

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1.economic growth and economic development

(1) economic growth:

Generally it refers to the increase in production, emphasizing the increase in total economic output, usually measured by GDP / GNP, NI and its per capita.

(2) economic development:

It mainly refers to the structural changes of output and input and changes in general economic conditions with the emergence of the increase in output .

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2.foreign trade’s effects

on economic development

They are reflected in the following eight aspects:

(1) demand effect;

(2) resources effect;

(3) structure effect;

(4) chain effect;

(5) competitive effect;

(6) learning effect;

(7) scale effect;

(8) employment effect.

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(1) demand effect

effect of import demand:

Imports make up the national shortage of goods, stimulate consumers’ demands for these products to generate new demands, and thus stimulate domestic establishment and

development of new industries.

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effect of export demand:

Foreign countries’ demands for domestic goods stimulate the export sectors to increase domestic production volumes, improve product quality, and spur the economic growth of domestic industries.

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(2) resources effect

effect of resource import:

Importing resources can make up the shortage of resources, and solve their contradiction of resources shortage in the process of economic development.

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effect of resource export:

Due to foreign demands for domestic resources, the development of its resources make a

breakthrough in domestic market limitation, implement its allocation of resources more efficiently, and enjoy the benefits of international division of labor.

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(3) structure effect

The result of demand effect and resource effect’s common function is that the industrial structure of a country / region adjusts and optimizes. Some industries will be phased out, some other industries will quickly gain new development.

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