Global Trading Environment

And
Recent Trade

Made By:
Tushar Chawla
MB12D16

Major Economies of the World

With their GDP (PPP).

United States China India Japan Russia -

$15.6 trillion
$12.4 trillion
$4.8 trillion
$4.5 trillion
$3.4 trillion

WHAT IS GLOBAL TRADING

ENVIRONMENT???
Refers to Exchange of capital, goods, and
services across international borders.
Represents a share of GDP.
Guiding Principle of global trade is comparative

advantage.

UNITED STATES OF AMERICA

World's

largest

national

economy

since

the

1920s.

Second-largest trading nation in the world behind

China.

Worlds third largest exporter, after the European

Union and China .
60% of funds used in international trade are U.S.
dollars.

Trading Partners of US.

Canada
China

15.30%

Mexico
41.90%

Japan
14.60%
Germany
South Korea
13.30%

United Kingdom
4.20%

2.60%
2.80%

5.30%
Others ( Brazil , Taiwan , India,
Netherlands,Italy,

Exports of USA (2012):

$1.564 trillion
Capital Goods
6.10%

3.80%

7.60%

Industrial Supplies

27.90%

Consumer Goods

8.60%

Automotive vehicles and

components

9.40%

Food and beverages

11.80%

24.80%

Fuel , oil and petroleum

products
Aircraft and components
Others

Imports of USA (2012):$2.299 trillion

4.80%

Consumer Goods

3.10%

Capital Goods
5.40%

22.70%

13.10%

Industrial Supplies
Crude Oil

18.70%

13.70%

Automative vehicles and

components
Computers and Accessories
Food and beverages

18.40%
Others

China
World's

second largest economy by nominal

GDP and by purchasing power parity .

China is also the largest exporter .
Second largest importer of goods in the world
The world's fastest-growing major economy,

with growth rates averaging 10% over the past

30 years.

Exports $ 1906.08 million

Imports - $ 1620.90 million
Balance of Trade - $ 285.18 million.

From 2004 to 2009 Chinas annual trade surplus has

increased 10 times.
Export includes apparel , textiles , iron ore , steel , optical
and medical equipments.
Major Export partners are
United States 17.2 %
Hong Kong 15.8%
Japan 7.4%
South Korea- 4.3%

INDIA
Third-largest by purchasing power parity (PPP).
One of the G-20 major economies and a member
of BRICS.
India is the 19th-largest exporter and the 10thlargest importer in the world.
India's Gross Domestic Product grew at 4.4 percent
in the second quarter of 2013- worst quarterly rate
since 2002.

Indias imports Rs 2342.13 billion

Indias exports Rs 1652.02 billion
Trade deficit -

Export

includes

Rs 690.11 billion

software

petrochemicals,

pharmaceuticals , textiles , precious stones ,

machinery , iron ore.

Import includes crude oil , coal , fertilizer , gold

, chemicals.

Export Partners
Column1

U.S.A
U.A.E

China
Singapore
Hong Kong
Japan

Japan
Fourth largest by Purchasing Power Parity

[10]

The world's second largest developed economy.

World's

3rd

largest

automobile

manufacturing

country.
Exports

include

motor

vehicles,

iron

and

steel

products , auto parts , plastic materials.

Import Includes petroleum , liquid natural gas, coal,
semiconductors .
Export to China ( 18%)
United States ( 17.7%)
South Korea ( 7.7%)
Thailand ( 5.5%)
Hong Kong (5.1%)

 Imports from China (21.3%)

United States (8.8%)
Australia ( 6.4%)
Saudi Arabia (6.2%)
United Arab Emirates (5%)
Exports JPY 5783.71 billion
Imports - JPY 6744.04 billion
Trade deficit 960.33 billion

RUSSIA
Fifth largest by purchasing power parity.

Russia's oil and gas production and pipeline projects have

been a primary source of Russia's economic growth.
Abundance of natural resources, including timber, precious

metals, and particularly fossil fuels (oil, natural gas, and

coal)

Exports petroleum and petroleum products, natural gas,

metals, wood to Netherlands, China , Italy , Germany.

 Imports machinery, vehicles, meat , fruits

and nut , optical instruments , iron , steel
from majorly China , Germany and Ukraine.

Exports - $ 43455 million

Imports - $ 30144 million
Trade surplus - $ 13311 million

Recent Trends in
World Trade

Chinas export rose 7.2% in Aug and imports rose by 7%.

Manufacturing Sector regained momentum, and service sector was at
five months high.
Global oil prices rose; due to turbulence in Libya and prospects on

Syria.
GDP growth for oil companies declined.
WTO has slashed its forecast for Indias global trade growth to 3.3%
in 2013 from 4.5% .
Called for strengthening the multilateral system to enable trade to
emerge as an engine to growth.
Trade growth is expected to remain sluggish in 2013 as the economic

slowdown in Europe continues to suppress global import demand.

Global trade growth may touch 5% in 2014.

 India & Japan have expanded bilateral currency swap to $ 5 billion.

They had inked bilateral swap agreement for $15 bn on 4 Dec 2012.
Lead to more dollar flows.

Russia has lifted the ban on imports of rice and peanuts after 9
months.
A positive impact on Indias export and better trade relations.

Petroleum Minister plans to lower dollar

outflow Crude Oil Payments.

Expected to import 11mn tones at an avg

of $105 per barrel .i.e. $8.47 billion.

India imports 44% of its crude oil from

Iran, as a set of against Irans import(

Rice).

US Federal Reserves Quantitative

Easing.

A third round of quantitative easing, QE3, was

announced on 13 September 2012.
Launched

a new $40 billion per month, open-ended

bond purchasing program of agency mortgage-backed

securities..
On 12 December 2012,

amount of open-ended

purchases increased from $40 billion to $85 billion per

month.
On 18 September 2013, the Fed decided to hold off
on scaling back its bond-buying program.

QEs Impact on US Higher inflation than desired.

Can fail to spur demand.
May depreciate USs exchange rates versus other
currencies.

not

Does

necessarily

increase

the

aggregated money supply.

But

inflationary

system's

economy

risks

are

outgrows

mitigated
the

pace

increase of the money supply from easing.

if

the

of

the

Impact on Emerging Asia

Increase in Foreign exchange reserves .
During QE 1 -Capital inflow of $9 billion per
quarter .

Increase in the monetary base (in US dollar

terms).

During the QE2 period, the

increase in the

monetary base was $19 billion per quarter .

THANK YOU