SAGUID, JANINE J

MBA

1. The triad nations dominate the world trade and investment, and a great deal of this
activity takes place both among and within triad nations. For example, the US and Japan
do approximately $210 billion of trade annually, the US and EU account for over $380
billion of trade, and the EU and Japan do $120 billion of business annually.
One of the major area of triad trade is automobiles, which provide an excellent example
of the economic interrelationships that exits between triad members.
The Triad nations are highly developed free-market economy. Western Europe tended to
attract so-called “high-value-added” manufacturing industries (e.g., automobile
fabrication and aerospace work), whose finished products are worth much more than the
materials and labour needed to create them.
The four countries are at different stages of development, and have had different economic
approaches and levels of openness. Their policies—on trade, investment, and immigration in
particular—vary, as do their ideas of how open their economy should be. They have different tools at
their disposal. And while, in some cases, their economic interests are complementary, there is a
range of areas in which they are competitive as well.
2. China's stunning economic growth has convinced the West that it is just a matter of time until China
becomes a world superpower. But its ideological orientation makes China a revolutionary power that
is threatening both to the United States' status and global structure. 
China is a unique blend of market and command economy, but the market is gaining importance.
Partly because of trade surpluses, China has accumulated foreign-exchange reserves in excess of
$3 trillion. These surpluses allow for outward overseas direct investment – much of the current
focus is on China's investments in many African and Latin American countries.
Chinese companies are preparing for investments in Western and Eastern Europe in engineering and
technology as part of an effort to find new markets and gain greater control of global supply chains. In
2010 Geely (a Chinese car maker) purchased Volvo (Sweden). Lenovo (the world's largest
manufacturer of personal computers) bought IBM's PC business
 EXERCISES

(AACSB: Reflective Thinking, Analytical Skills)

1. Identify the main political ideologies.

2. What is capitalism? What is a planned economy? Compare and contrast the two forms of economic ideology discussed

in this section.

3. What are three policy areas in which governments can create rules and regulations in order to control, manage, and

intervene in trade.