Sunday, May 31, 2009

terms of intenational trade SEZ & FDI

Quota
What Does It Mean?
What Does Quota Mean?
In the context of international trade, this is a limit put on the amount of a specific good that can be imported.
Investopedia Says
Investopedia explains Quota
Quotas are used to prevent other countries from "dumping."

Special Economic Zone - SEZ
What Does It Mean?
What Does Special Economic Zone - SEZ Mean?
Designated areas in countries that possess special economic regulations that are different from other areas in the same country. Moreover, these regulations tend to contain measures that are conducive to foreign direct investment. Conducting business in a SEZ usually means that a company will receive tax incentives and the opportunity to pay lower tariffs.
Investopedia Says
Investopedia explains Special Economic Zone - SEZ
While many countries have set up special economic zones, China has been the most successful in using SEZ to attract foreign capital. In fact, China has even declared an entire province (Hainan) to be an SEZ, which is quite distinct, as most SEZs are cities.
Tariff
What Does It Mean?
What Does Tariff Mean?
A taxation imposed on goods and services imported into a country. Also known as a duty tax.
Investopedia Says
Investopedia explains Tariff
Governments generally impose tariffs to raise revenue and protect domestic industries from foreign competition caused by factors like government subsidies, or lower priced goods and services.
Dumping
What Does It Mean?
What Does Dumping Mean?
1. In international trade, this occurs when one country exports a significant amount of goods to another country at prices much lower than in the domestic market.

2. A slang term for selling a stock with little regard for price.
Investopedia Says
Investopedia explains Dumping
1. Dumping is fought through the use of tariffs and quotas
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Foreign Direct Investment - FDI
What Does It Mean?
What Does Foreign Direct Investment - FDI Mean?
An investment abroad, usually where the company being invested in is controlled by the foreign corporation.
Investopedia Says
Investopedia explains Foreign Direct Investment - FDI
An example of FDI is an American company taking a majority stake in a company in China.

Special Economic Zone - SEZ
What Does It Mean?
What Does Special Economic Zone - SEZ Mean?
Designated areas in countries that possess special economic regulations that are different from other areas in the same country. Moreover, these regulations tend to contain measures that are conducive to foreign direct investment. Conducting business in a SEZ usually means that a company will receive tax incentives and the opportunity to pay lower tariffs.
Investopedia Says
Investopedia explains Special Economic Zone - SEZ
While many countries have set up special economic zones, China has been the most successful in using SEZ to attract foreign capital. In fact, China has even declared an entire province (Hainan) to be an SEZ, which is quite distinct, as most SEZs are cities.

Protectionism
What Does It Mean?
What Does Protectionism Mean?
Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses and direct state intervention.
Investopedia Says
Investopedia explains Protectionism
Any time a government undertakes any of these actions, they are engaging in protectionism. There is significant debate surrounding the merits of protectionism. Critics argue that, over the long term, protectionism often ends up hurting the people it is intended to protect and often promotes free trade as a superior alternative to protectionism.

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