Trade and International Business Essay

Total Length: 1365 words ( 5 double-spaced pages)

Total Sources: 3

Page 1 of 5

China



Unit 5



A neo-mercantilist trade policy is defined as a situation where the state plays an active role in shaping trade, building a close relationship with the country's businesses. In doing this, the state will take steps to encourage exports, discourage imports, and generally seek to create the conditions where the nation's producers can thrive (Thoma, 2009). Based on this definition, it is hard to argue against the idea that China is employing a neomercantilist policy. The PRC exerts strong control over imports, while providing a wide range of support to exporters. These supports include currency manipulation – not allowing the yuan to float freely is passive manipulation – the provision of financing by the state-owned banking system, and a system of favorable trade barriers.



China's trading partners should take action – the question is what? There are limits to what actions can be taken within the confines of law, and without creating a pointless trade war. But certainly, other nations that so desire should seek to protect their own industries from ones China is supporting, and should be cognizant of ensuring that trade policy with China allows for mutually beneficial trade – where reciprocity is a key tenet.



Unit 6



Ireland has inward trade flows double those of Japan. There are a few reasons for this. For one, Ireland has actively sought out investment. The nation seeks to leverage a particularly advantageous position within the EU. As an EU nation, it benefits from being part of that trade union, and seeks to be an English-speaking hub for companies that wish to operate within the EU. Further, Ireland has a free-flowing land border with the UK, one of Europe's largest markets. Leveraging both of these, Ireland has been able to attract a lot of investment in the form of service industries, software, and simply companies headquartered there whose profits flow through Ireland.
The number of greenfield startups in Ireland and Japan are not much different, but on average investments in Ireland are larger (Santander, 2018). This is in part because such investments are not just for the Irish market, but for the entire EU, which is a market twice the size of Japan. That alone appears to have explanatory power for the difference in inbound FDI, but there are political and cultural considerations as well.



Japan, in contrast, has always had an approach of building things internally and then selling to the world. Thus, Japan does not have the same level of encouragement of FDI – it doesn't need to because it has high productive capacity and a large market on its own. Where Ireland needs FDI to have a strong economy, Japan actually does not, because it can produce goods to sell to the rest of the world. So the structure of the Japanese economy is quite different. Further, there are cultural barriers that make Japan a more difficult place in which to invest. Where Ireland has a society more open to foreigners, and is English-speaking, Japan has always been somewhat mistrustful of foreigners, there are language barriers, and again there is also strong local competition. Companies are happy to sell products to Japan if they can, but they have no interest in investing in building businesses in Japan. With lower barriers, Ireland has the structure in place to attract inbound FDI, and it wants to. Japan does not care that much, and thus does not have the structure in place to handle as much inbound FDI.



Unit 7



The Gap's different brands each target a different market, which is usually the reason for differences in branding. Each brand has its own target defined by the products and the market. The Gap is the mainstream flagship brand aimed at the mass market. Athleta is the Lululemon knockoff stuff.....

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References

Santander (2018). Ireland: Foreign investment. Santander Trade. Retrieved April 21, 2018 from https://en.portal.santandertrade.com/establish-overseas/ireland/foreign-investment

Santander (2018). Japan: Foreign investment. Santander Trade. Retrieved April 21, 2018 from https://en.portal.santandertrade.com/establish-overseas/japan/foreign-investment

Thoma, M. (2009) Neomercantilism. Economist\'s View. Retrieved April 21, 2018 from http://economistsview.typepad.com/economistsview/2009/07/neomercantilism.html

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