Europe and China Trade Markets

Paper Summary:

This paper explains that China's emergence as both an economic and political force has presented opportunities for Europe to develop or expand its business and trade relationships with China. The author points out that the comparative advantage theory dictates that, if a country can produce an item at a lower relative cost than another country, then it has a comparative advantage for that particular product. The paper suggests that Europe has a strong comparative advantage in technology and infrastructure compared to the Chinese market; whereas, China's comparable advantage over any developed economy is production efficiencies based on its vast pool of low cost labor. The paper states that China has taken full advantage of the benefits of globalization by developing the technology channels to handle the communication and transaction of international commerce and the physical infrastructure for the transportation and logistics of goods and services through a supply chain channel.

Table of Contents:
Europe and China at the Crossroads
Overview
Comparative Advantage Theory
Overview
Europe's Market Advantages
China's Market Advantages
Foreign Exchange Dimension
China's Currency Issues
Europe's Currency Concerns
The Economic and Geo-Political Environment
Overview
Off-Shoring/Out-Sourcing
Currency Blocks
Production Possibilities Frontier
Foreign Direct Investment
Conclusion

From the Paper:

"Trade is of great concern to the EU and one of the major drivers in establishing a centralized body within which to set policy and coordinate trade agreements. Prior to the Maastricht Treaty that established the EU as a formalized body, the individual member states were seemingly caught up in endless internecine trade disputes with each other that precluded any sort of effective international trade policy to deal with an increasingly global economy. However, over the last several years, the EU has been much more effective at handling trade disputes between member states."

Sample of Sources Used:

• Backe, Peter, and Peter Mooslechner. "From Transition to Monetary Integration: Central and Eastern Europe on Its Way to the Euro Comments on the Country Papers." Comparative Economic Studies 46.1 (2004): 177+.
• Barnathan, J. "China steps onto the global stage." Business Week Online 12/April(2005): 1+.
• Barrell, R. "Trend growth and rising inflation." National Institute Economic Review, 191(2005): 8+.
• Barrell, R., & Davis, E. P. "Policy design and macroeconomic stability in Europe." National Institute Economic Review, 191(2005): 94+.
• Begg, Iain, Dermot Hodson, and Imelda Maher. "Economic Policy Coordination in the European Union." National Institute Economic Review (2003): 66+.

More papers on Europe and China Trade Markets:

• Essay # 71457 : "U.S.-China Trade Relations"
• Essay # 25032 : "Trade Relations Between Salem, Massachusetts and China"
• Research Paper # 128981 : "Strategies of Internationalization"

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