hnd經(jīng)濟(jì)學(xué)2世界經(jīng)濟(jì)學(xué)

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Economics2:TheWorldEconomy

F86E35

CandidateName:RENLU

GradeandClass:2013BA1

Introduction

2

1.Freetrade

3

2.Absoluteadvantagesandcomparativeadvantages

3

3.Thebenefitsoffreetrade

4

4.Thepurposeofcarryingouttradeprotectionism

5

5．OneMechanismoftheWorldTradeOrganization

6

6.OnemeasureofEuropeanUnionpromoteseconomicintegration

8

7.Balanceofpayments

9

8.ThegeneraltrendsinUKtradeoverthelast30year

10

9.Thebalanceofpaymentsaffectedbyexchangerates

12

10.Advantagesanddisadvantagesoffixedrateandfloatingrate

13

11.Effectsoffixedrateandfloatingrateonindividualsandcompany

15

12.Thecharacteristicsofthenewlyindustrializedcountriesandthedevelopingcountries

16

13.Theissuesofthenewlyindustrializedcountriesandthedevelopingcountries

17

14.TheinfluencesMulti-NationalCorporationsbringtonewlyindustrializedcountries.

18

Conclusion

19

Reference

20

Introduction

Thisreporthasintroducedtheworldeconomicssimply.Thecontentincludes:Internationaltrade,freetrade,Protectionism,theroleofWTOandunder-developednation,UKabsoluteandcomparativeadvantage,theprotectionismandtworecentexamplesaboutdemonstrateargumentswhichgovernmentmayputforwardforitsuse,twobarriersoftrade,aEUinitiativeabouttheroleoftheEUinpromotingtrade,thecompositionofthebalanceofpayments,thegeneraltrendsinUKtradeoverthelast30years,thewaywhichthebalanceofpaymentsaffectedbyexchangerates,ananalysisoftwocurrentissuesthatfaceLDCs,andtheaidofrecentexamplesabouttwoimpactsofmultinationalsonNICsandLDCs.

I.Freetrade

(1).Freetradeisatypeoftradepolicythatallowstraderstoactandtransactwithoutinterferencefromgovernment.Thus,thepolicypermitstradingpartnersmutualgainsfromtrade,withgoodsandservicesproducedaccordingtothetheoryofcomparativeadvantage.

China-ASEANfreetradeareawasformallyestablishedinJanuary1,2010,coveringapopulationof1900000000.China-ASEANfreetradearea’sGDPamountedto$6andtradeamountedto$4.5.Itisthelargestfreetradezoneamongdevelopingcountries.

AftertheestablishmentofCAFTA,morethan90%productsarecarriedoutforzerotariffsonbothsides.AveragetariffsfromChinesetoASEANdecreasefrom9.8%to0.1%,AveragetariffsfromASEAN’ssixoldmemberstoChinesedecreasefrom12.8%to0.6%.Tariffs’hugereductionpromotedtherapidgrowthofbilateraltrade.

ChinaandASEANcountries’tradeinvestmentgrows,economicintegrationdeepens,companiesandpeoplearewidelybenefit,realizinggoalsofmutualbenefitandwin-wincooperationandcommondevelopment.ChinaandASEAN’stotalquantityofbilateraltradegrowsrapidly.FromJanuarytoOctoberthisyear,thebilateraltradevolumehasreachedto$295900000000,ayear-on-yeargrowthof25.7%.

(2).Absoluteadvantagesandcomparativeadvantages

Absoluteadvantagesissaidtooccurwhenonecountrycanproduceagoodorservicetopre-determinedqualitywithlessresourcesormorecheaplythananothercountry.

Evenwhenacountryhasanabsoluteadvantageoveranothercountryintermsofcommoditiestheywishtotradeitwillstillbetotheirmutualadvantagetotradeprovidingeachcountryhasthecomparativeadvantages.

UKisamajorimporterofmanufacturinggoodssuchclothes,shoes,toys,electronicproducesetc.astheselabororientedconsumergoodswillcostmoreinUKbefore1980s.UKhastheWiththedevelopmentofservice,theadvantageoftradeisservicetrade.

Thegoodsthatcourtryimportandexportchangeovertimeasthegoodsinwhichtheyhaveacomparativeadvantagechangeovertime.Before1970s,manufacturingindustryisitsabsoluteadvantage.After1970s,serviceindustryismorecompetitiveforinternationaltradesuchascomputersoftware,businessserviceandpharmaceuticals.Theseindustryareseentobringthepossibilityoflongtermgrowth,whiletheindustriesbasedonheavycapitalinvestmentorrequiringrelativelycheaplaborwillnotbecompetitivewithdevelopingcountries.

2.Thebenefitsoffreetrade

(1).Goodsandservicesproducedatlowercost.Freetradecanpromotethecooperationofdifferentcountriesintheworld.Itcandecreasethecostofproducinggoods.

(2).Greaterrangeofcommoditiesforconsumers,morechoice.Anycountriescannotproduceallproducts,theyallhaveproductswhichareunabletoproduce.Tradeallowustobuyallofthem.Greaterrangeofcommoditiesprovidecustomerswithmorechoice.

(3).Increasedworld-wideoutput.Eachcountryproducingaccordingtotheirrespectiveadvantageshashighefficiency.Underthesameresources,ithashighyield.Therefore,internationaltradeincreasedworld-wideoutput.

BarrierstoInternationalTrade

Tradebarriersaregovernment-inducedrestrictionson

\o"Internationaltrade"

internationaltrade

.Thebarrierscantakemanyforms,includingthefollowingtariffsandnontariffs.

NonTarriffBarriers-exchangecontrols

Inarealworld,thereisandshouldbeacertaindegreeofgovernmentinterventiononforeignexchange.Importsneedforeigncurrenciestobuygooodsandservicesfromabroad.Importersmustapplytothecenytalbankforthecurrencytheyneedtopurchasegoodsinthatcountry,TheCentralbankcanerxertcontroloverthevarietyandvolumeofbothimportsandexportsbycontrollingthequantityofforeigncuurencyitwillissuetoexportersandimporters.

NonTarriffBarriers-ImportDepoits

Governmentrequiresimporterstolodgeanon-interestbearingdepositinadvancewithitsCentralBankbeforetheycanbuygoodsandservicesfromabroad.Besides,thedepositisusuallyinanamountequaltoallorpartofthecostofimportedgoods.Thisistimeconsumingandobviouslyexpensivesinceitreducestheliquidityoftheimportingfirms,whichtendtohindertheirimportingactivities.Before1984,theNigerianadvancedimportdepositrangedfrom50%to200%ofthevalueofalistofimportitems.

Giveaexampleabouttariffs,35%tariffsonChinesetyresimposedontheUnitedStateson11thSeptemberin2009.ItmakeChinesetyresfirmshavetoincreasepriceifsalesinAmerica.

Forexample,tnontariffsinRussiatoUkraineforembargoeswhichsuspensionofUkraineimportsofjuiceon29thJulyin2014.ItmakeUkraine’sjuicenotallowsaleinRussia.

4.ThepurposeofraisingbarrierstoInternationalTrade

(1)Thepurposeistoprotectemployment.

FootwearmanufactureersassociationsofItaly,SpainadPortugalarereportedtohavefieldapplicationstotheEUtocurbfootwearimportsfromChina.LocalshoemarkersinElche,thecapitalofSpain’sonceflourishingfootwearindustry,arguethat“madeinChina〞istakingawaytheirjobsbythatChineseshoeshavebeenboominginSpainjustbecauseofgoodqualityandreasonableprices.

(2)Thepurposeistoanti-dumping.InJuly2012,SolarWorldAG,aGermangiant,ledaconsortiumofaround25EUsolarpanelproducerstofileacomplainttotheEUCommissiontoinvestigatewhethertherehasbeendistortionofcompetitionbyChinesecounterpartsduetodumping.SoonGermanyagainstChinalowprice.

5．TheRoleofWTO

TheWorldTradeOrganization(WTO)isan

\o"Organization"

organization

thatintendstosuperviseand

\o"Freetrade"

liberalize

\o"Internationaltrade"

internationaltrade

.Theorganizationofficiallycommencedon1January1995underthe

\o"MarrakechAgreement"

MarrakechAgreement

,signedby123nationson15April1994,replacingthe

\o"GeneralAgreementonTariffsandTrade"

GeneralAgreementonTariffsandTrade

(GATT),whichcommencedin1948.

Theorganizationdealswithregulationoftradebetweenparticipatingcountriesbyprovidingaframeworkfornegotiatingandformalizingtradeagreementsandadisputeresolutionprocessaimedatenforcingparticipants'adherencetoWTOagreements,whicharesignedbyrepresentativesofmembergovernmentsandratifiedbytheirparliaments.

TheWTOdisputesettlementmechanismismeasuresofdealingwithtradedisputesbetweenmembers.Itistheeffectivewayforcountriesespeciallythedevelopingcountriestoresolvetheeconomicfrictionandsafeguardtheirlegitimaterightsandinterests.Itisveryunfavorableforthedevelopingcountriestoresolvetradedisputesespeciallytradedisputeswiththedevelopedcountriesthroughbilateralchannels.Thebilateralapproachpursuesstrengthdoctrine.Involvedintradedisputesamongdevelopingcountries,theWTOdisputesettlementmechanismrulingiscomparativelyfairandreasonable.Aseitherthecomplainantorrespondent,thelegitimateinterestsofthedevelopingcountrieshavebeeneffectivelyprotected.ItisbecausetheWTOdisputeadjudicationhasverystrongfairness,developingcountriesgenerallyhaveahighenthusiasmtousetheWTOdisputesettlementmechanism.SomelargereconomicscaledevelopingcountriesismoreactiveintheuseofWTOdisputesettlementmechanism.Ithelpstoreducetheeconomicfrictionbetweencountries,andpromotefriendlyrelationsamongnations.

TheUruguayRoundwasthe8throundof

\o"Multilateraltradenegotiations"

multilateraltradenegotiations

(MTN)conductedwithintheframeworkofthe

\o"GeneralAgreementonTariffsandTrade"

GeneralAgreementonTariffsandTrade

(GATT),spanningfrom1986to1994andembracing123countriesas"contractingparties".TheRoundledtothecreationofthe

\o"WorldTradeOrganization"

WorldTradeOrganization

,with

\o"GATT"

GATT

remainingasanintegralpartoftheWTOagreements.ThebroadmandateoftheRoundhadbeentoextendGATTtraderulestoareaspreviouslyexemptedastoodifficulttoliberalize(

\o"Agriculture"

agriculture

,

\o"Textiles"

textiles

)andincreasinglyimportantnewareaspreviouslynotincluded(tradein

\o"Service(economics)"

services

,

\o"Intellectualproperty"

intellectualproperty

,

\o"Investmentpolicy"

investmentpolicy

tradedistortions)

HerearesomeothersareastheWTOhasdealtwithinattemptstoestablishitselfasthepolicingbodypromotingfreetrade.TheBananaDispute.TheWTOruledthattheEuropeanUniondiscriminatedunfairlyagainsttheUSwithitsbananaimportrules.TheWTOallowedtheUStoslapa$191millionsanctionontheEU.Wasitpaid?Wedonotknowbutprobablynotso.

6.OnemeasureofEuropeanUnionpromoteseconomicintegration

TheEuropeanUnion(EU)isa

\o"PoliticsoftheEuropeanUnion"

politico

-

\o"EconomicandMonetaryUnionoftheEuropeanUnion"

economic

unionof28

\o"MemberstateoftheEuropeanUnion"

memberstates

thatarelocatedprimarilyin

\o"Europe"

Europe

.TheEUoperatesthroughasystemofsupranational

\o"InstitutionsoftheEuropeanUnion"

institutions

and

\o"Intergovernmentalism"

intergovernmental

negotiateddecisionsbythememberstates.Theinstitutionsare:the

\o"EuropeanCommission"

EuropeanCommission

,the

\o"CounciloftheEuropeanUnion"

CounciloftheEuropeanUnion

,the

\o"EuropeanCouncil"

EuropeanCouncil

,the

\o"CourtofJusticeoftheEuropeanUnion"

CourtofJusticeoftheEuropeanUnion

,the

\o"EuropeanCentralBank"

EuropeanCentralBank

,the

\o"CourtofAuditors"

CourtofAuditors

,andthe

\o"EuropeanParliament"

EuropeanParliament

.TheEuropeanParliamentiselectedeveryfiveyearsby

\o"CitizenshipoftheEuropeanUnion"

EUcitizens

EUcaneliminatecustomersdutiesandquotasonimportsandexportsofgoodsbetweenmemberstatesandeliminatetariffsbetweenEUmembers.Thoughtheinstitutions,memberscanestablishcommonpoliciesforagricultureandtransportforfreetrade.

Itcanacceleratetheinvestmentfromawiderangeofcontries.WiththerisingstatusoftheeuroanddevelopmentofEuropeancapitalmarket,members’costofcapitalwilldecline,whichisconducivetoinvestmentandeconomicgrowth.TheEuropeanCentralBank(ECB)developandimplementaunifiedmonetarypolicy,eachcountry’sinterestrates,pricesandinvestmentreturnswillgraduallynarrowthedifferencesorreachtounanimous,leadingtoanoveralldeclineofpriceandthelevelofinterestrates.

7.Balanceofpayments

(s://gov.uk/government/statistics/announcements)

Thebalanceofpayments(BOP)ofacountryistherecordofalleconomictransactionsbetweentheresidentsofacountryandtherestoftheworldinaparticularperiod(overaquarterofayearormorecommonlyoverayear).Thesetransactionsaremadebyindividuals,firmsandgovernmentbodies.Thusthebalanceofpaymentsincludesallexternalvisibleandnon-visibletransactionsofacountryduringagivenperiod,usuallyayear.Itrepresentsasummationofcountry'scurrentdemandandsupplyoftheclaimsonforeigncurrenciesandofforeignclaimsonitscurrency

Thistableillustratescurrentaccount,capitalaccountandfinancialaccountinUKduringthe20yearsfrom1980to2010.Intermsofcurrentaccount,therejustfouryearsthefigureispositivewhenbetween1980and1983.Andthenthefigurealmostnegativefrom1984to2010.Andthefigureachievesthelowestnumberabout-55190millionin2008.ThissituationillustratethattheeconomyofUKdevelopnotverywell.

Asforcapitalaccount,thedatashowsthatthisaccountexperienceafluctuatetrend.First,thefigurewas-4millionin1980andthenthefiguredecreaseto-79millionin1981.Afterthatthefigurewas6millionin1982increaseto159millionin1987.Whatisfunnythingisthefigurefallagainto-39millionin1988.Afterthatthefigureexperienceafluctuateandwhatisnotableisthefiguregainalowestnumber-1527millionin2006.

Intermsoffinancialaccount,thefigureseeanpositivetrendfrom2157millionin1980to122millionin1986.Andthenthefigureexperienceanegativetrendbetween-9690millionin1987and-23296millionin1993.Andfrom-20261millionin1999to-30276millionin2010thisaccountexperiencenegativetrendagain,andgetthelowestnumberin2008becauseofthefinancialcrisisthefigurewas-39301million.

8.ThegeneraltrendsinUKtradeoverthelast30year

Overall,theevolutionoftradeingoodsshowanupwardtrend.Withthequickdevelopment,UKneedtokeepupwiththetimes,thecountrymustthroughtradeingoodtoincreasecountry’sincomesowiththepassageoftime,therearemoreandmoretradeinUK.

ThetableshowstheevolutionoftradeingoodsandservicesinUKbetween1980and2008.Thetradeingoodsaccountstand20billionin1980.Thetradeingoodsaccounthasremainedindeficit.Thedeficitgrewremarkableinthelate1980storeachapeakofabout24billionin1989.Andthendecreasedbackto20billioninearly1990sandkeepastableat10billionfrom1991to1998.In1998thedeficitjumpedbyover9billion,andithascontinuedtorisesince,reachingacashrecordof92.9billionin2008.

Thechartshowsthatthetotalgoodsexportsarelessthanimports,whichleadstodeficit.However,thetotalserviceexportsaremorethantotalserviceimports,whichresultsinsurplus.

ItshowsUnitedKingdomisinalargefiscaldeficitinthelast30years.Thehighestsurplusisin1981,howeverthecurrentbalancedeficitfrom1984to1990.From1984to1989,thecurrentbalancedeficitandin1987,thedeficitincreasequickly.Thecurrentbalancedeficitfellsharplyfrom1990to1991.From1992to1997,thecurrentbalanceslightlyfluctuates.Thenfrom2000to2006,thedeficitincreasedsubstantially,althoughfrom2002to2004,thereisaslightdecline.From2007to2008deficithasasteepdecline.Mainreasonmaybeingoodstradebalancedeficits,whilethesurplusontradeinservices,especiallyinthelast30yearsgrowth.

Inthepast30yearsBritain'smerchandisetradedecreased,becauseofthehighcostofHR,theUKisfewtodoingthemanufacture,mostgoodsisdependonimported,noexported.Butthefinancialservices,rentingandbusiness,istotallyincreased,sointhepast30years,theUKfinancialhasbeensteadilyincreasing.

9.Thebalanceofpaymentsaffectedbyexchangerates

(1)Theeffectsofexchangeratesfortrade

a.Importedgoodswillbedearer,thereforetheTradeinGoodsislikelytomoveintodeficit.Consumersmayturntoconsumemoreimportedgoods;Inflationmaybelowerbecausedomesticfirmsmayreduceprices.ThepriceofimportedrawmaterialsmaygodownagainaffectingtheTradeaspect.Consumersmayfinditeasiertobuyimportedgoods.

b.Domesticgoodsandserviceswillbecheaperbothinforeignanddomesticmarkets.Acountrywhichhasreducedthevalueofitscurrencywouldcertainlybelookingtosellmoreabroad.ThisshouldmeananimprovementinTradeinGoods.

Cheapercurrencyhelpsboosttheexport

Seeanexample:AUKfirmmanufacturesharddiscsforacomputerfirmintheUSA.

Sellingprice:100pounds.

Exchangerate:1pounds=$1.5

CosttotheAmerican:$150.

Exchangerate:1pounds=$2

CosttotheAmerican:$200

TheAmericanfirmmayconsiderthistobetooexpensiveandlookelsewhereforacheaperalternative.

If:

Exchangerate:1pounds=$1

CosttotheAmerican:$100

TheAmericanfirmmayconsiderthistobecheaper,andbuymore.

(2)Theeffectsofexchangeratesforcapitalaccounts

a.Manufacturingfirmsmightforexamplebuildupstocksattecheaperpriceandforeigninvestmentmayincreasebecauseprofitssentbackwillbeworthmoreintheirdomesticcurrency.

b.Itcouldencouragefirmsandindividualstoinvestabroadinthattheforigncurrencyearnedwillbeworthmorewhensentbacktothedomesticmarket.

10.Advantagesanddisadvantagesoffixedrateandfloatingrate

Floatingexchangerateorfluctuatingexchangerateisatypeof

\o"Exchange-rateregime"

exchange-rateregime

inwhichacurrency'svalueisallowedtofluctuateinresponsetomarketmechanismsofthe

\o"Foreign-exchangemarket"

foreign-exchangemarket

.Acurrencythatusesafloatingexchangerateisknownasafloatingcurrency.Afloatingcurrencyiscontrastedwitha

\o"Fixedcurrency"

fixedcurrency

.

Advantages.

Largereserveswillnotbenecessarytoprotectthecurrencyagainstchangesorspeculation.Acountryhasnoobligationtomaintainexchangeratestability,andthereforeitdoesnotneedforeignexchangereserveasmuchasinthefixedexchangerates,whichcansaveforeignexchangefunds.

Theexchangeratewillnotbecomeatargetbecausewhicheverwayitmoves,themechanismshouldstarttooperatequicklytorestoreequilibrium.Theimbalanceofacountry'sinternationalbalanceofpaymentscanbeeliminatedbyfreefluctuationofexchangerate.

Governmentsdonothavetointroducemeasurestokeepthevalueatafixedrate,whichmightbeharmfultoothersectionsoftheeconomy.Becausethebalanceofpaymentsofeachcountrycanadjustbythemselves,whichensuresthestabilityofforeignexchangemarketinacertainextent.

Disadvantages.

Thefuturesmarketisdesignedtopreventthis.Bybuyingforwardforcommoditiesapriceisagreedwhichdoesnotchangewhenthecommodityisdelivered.Itcausesallcountries'instabilityofabilityofinternationalsettlementandcommodityprice.

Demandmaybeunstablebecauseexternalpricesofdomesticgoodswillbesubjecttochange.Planningproductionmaybedifficult.Theinstabilityofexchangerateincreasestheriskofinternationaltrade

Ifthereisinflationafloatingexchangeratewillnotalwaysdealwithiteffectivelybecausethedepreciationofthecurrencyintheforeignexchangemarketswillmakeimportsdearerandassistpossiblecostpushinflation.

Fixedexchangerate,sometimescalledapeggedexchangerate,isatypeof

\o"Exchangerateregime"

exchangerateregime

wherea

\o"Currency"

currency

'svalueisfixedagainsteitherthevalueofanothersinglecurrency,toa

\o"Currencybasket"

basketofothercurrencies

,ortoanothermeasureofvalue

Advantages.

Theyreduceuncertainty,thismakestradeandinvestmentsbetweenthetwocountrieseasierandmoreexternalandmorepredictableandisespeciallyusefulforsmalleconomiesinwhichexternaltradeformsalargepartoftheirGDP.

Longtermgrantingofcredits,long-termcontractsandinvestmentoverseasareseentocarrylessrisk.Itmakesthecapacityoftheinternationalsettlementandthepriceofimportandexportgoodsbestable.

ThefixedrateplayedacrucialroleinachievingthisgrowthinFDI.Thestabilityoftheexchangeratesuppressedthespeculationofforeignexchangemarkettoacertainextent.

Disadvantages.

Ifdeficitspersistthenreservesofforeigncurrencymaybeusedupquitequickly.Itleadstoreductionofexports,thedeficitofinternationalbalanceofpaymentsandmoreunstablethecurrency.

Countrieswhichhaveapersistentdeficitorsurpluswillhavetotakesomeactionwhichmayhavesevereimpactsuponexportsandimportsorboth.

Ifinflationoccurstheunderlyingcausewillneedtobetackled.Countriescannotrelyondevaluingthecurrencytogetridoftheproblem.Itweakenedtheautonomyofdomesticmonetarypolicy.

11.Effectsoffixedrateandfloatingrateonindividualsandcompany

FloatingExchange

Company.

Floatingexchangeratesystemputforwardhigherrequirementsforcompany'smacro-economicmanagementcapacityanddevelopmentoffinancialmarket.

Itincreasescompany’smanagementandoperationcost.

Thecompanydirectlyproducesexchangeloss.

Individuals.Inthefloatingexchangeratesystem,exchangeratetendtofluctuatesignificantly,whichisnotconducivetoindividualsinvestmentWithfloatingexchangerates,individualsmightspeculateinfinancialmarketsIndividualsarebeginningtorealizethechallengeofpriceadvantagerecessionandthenecessityofimprovingnonpricecompetitiveness.

Theindividualsbegantorealizetheimportanceofmonetarysettlementtiming.

Theindividualsbegantorealizetheimportanceofmonetarycurrencyselection.

FixedExchange

Company.Rigidexchangeratearrangementsmaybeconsideredimplicitexchangerateguarantee,soastoencouragecapitalinflowsintheshorttermandnohedgingofforeigndebt,damagingthecompany’shealthofthefinancialsystem.Fixedratemakesthecompany’sadjustmentofrelativepricebeeasierandsmoother.

Itisbeneficialtoalong-termstabledevelopmentofcompany’seconomic.

Itisdirectlygeneratetheexchangeratelosses

Individuals.ItIsconduciveforindividualstomakecostandprofitaccounting,whichavoidstheriskofexchangeratefluctuations.

Iteasilyleadstocurrencyovervaluationandweakenthecompetitivenessoflocalexports,causingpersonalimbalancesoflong-termcurrent-account.

Ithelpsindividualstoeliminatetheriskofexchangerateandreducethetransactioncostofinternationaltradeandinvestment.

12.Thecharacteristicsofthenewlyindustrializedcountriesandthedevelopingcountries

Newlyindustrializedcountries’economicstructureespeciallyindustrialandagriculturalstructurechangessignificantly,andtheproportionofindustryislargerthanagriculture.Intotalexports,theproportionofmanufacturedgoodsincreased,gettingridofthesituationofahalfofthedevelopingcountriesdependingonprimaryproducts.Manyintermediateproductsandmachineryandequipmentrequiredforproductionisstillinthehandsofthedevelopedcountries.Insomeproductionofmanufacturedgoods,Brazilisonlydevelopedcountries’assemblyprocessingfactory.Duetotheintroductionofalargenumberofforeigncapital,Brazilhaslargeforeigndebts,andtheamountofprincipalandinterestishuge.From2011to2014,theeconomyofBrazilisnotoptimisticthesituationoftheperiodforthesefouryears,theaverageeconomicwasonly1.4%.

Thedevelopingcountriesrelyheavilyonagriculturalproduction.Fromtheproductionstructureofagriculture,low-incomecountries’shareofagricultureintheGDPismuchhigherthanthatofdevelopedcountries;fromtheemploymentstructure,theproportionofagriculturallaborinIndiaupto50%~70%;fromtheurbanizationlevel,theproportionofurbanpopulationintotalpopulationoflowandmiddleincomeismuchlowerthanthoseofhighincomecountries.UnderdevelopedmarketeconomyisthenatureofIndia’seconomy.Duetothelongsufferingboundcolonialplunderandfeudalrelationsofproduction,aswellasgovernment’simproperinterventionafterindependence,themarketofIndiafailedtooperateandwasdistortedseverely,unabletofunctionasthebasicmeansofresourceallocation.

13.Theissuesofthenewlyindustrializedcountriesandthedevelopingcountries

Newlyindustrializingcountry:

WhileBrazilintroducinglarge-scaleforeigncapitalandborrowingfromtheinternationalfinancialcapital,Brazilcannotsolvetheproblemofexcessivedependenceoninternationalcapitalintheecono