This document discusses trading partners and interdependence. It defines a trading partner as two or more participants in an ongoing business relationship, and a business relationship as an association between companies entered into for commercial purposes through a legal contract. Countries trade more when they have differences in climate, labor, capital, and innovation abilities. Interdependence describes how trading partners rely on and influence each other. For example, China and the US influence each other's economies. The document then discusses types of interdependence and China and North Korea's trading relationship.

1. PRESENTATION:
DETERMINATION OF TRADING
PARTNERS
INTERDEPENDENCE
Jasmeet Singh
MBA (2 years)
2nd Semester
13062110

2. TRADING PARTNER
]
One of the two or more participants
in an ongoing business relationship.

3. BUSINESS RELATIONSHIP
An association between individuals or companies
entered into for commercial purposes and
formalized by legal contract or agreement.

4. Determination of Trading Partners
There are number of theories that explain why do countries
trade with each other. Out of those we can make out
that:
- Greater the dissimilarity among countries, the greater the
potential for trade. For e.g. Great difference in climate
conditions lead to great differentiated products.
- Countries that differed in labor or capital intensities would
differ in the types of products they could produce
efficiently and differences in innovative abilities affect
how production of a product would move from one
country to another during product life cycle.

5. INTERDEPENDENCE
Interdependence describes relationships in
which members of the group are mutually
dependent on the others.
In trade people and departments must rely on
one another to share information, financial
resources, equipment and more, making
interpersonal communication highly valuable
to a company and oneself in order for a
successful outcome.

6. Example : China buys lots and lots of U.S. dollars in order to
keep the $ strong and the Yuan low. This means more money
for America which, in turn, America buys lots and lots of
Chinese products.

7. INTERDEPENDENCE OF
TRADING PARTNERS
• Trade – the exchange of goods or services
between countries.
• Imports – goods or services brought into a
country from another country.
• Exports – goods or services sent out from a
country to another country.
• Balance of trade – the difference between the
value of the goods and services that a country
exports and the value of the goods and services
that it imports.

8. Canada’s Trading Partners
$208 billion
$348 billion
$24
$9
$13
$8
$13
$7
$10
$3

9. TYPES OF INTERDEPENDENCE
• Pooled Interdependence
• Sequential Interdependence
• Reciprocal Interdependence
• Comprehensive Interdependence

10. THE CHINA & NORTH KOREA
RELATIONSHIP
1. China is Korea’s biggest trading partner, main
source of food, arms and fuel.
2. China’s support for North Korea in Korea War
(1950-53).
3. To support North Korea when Pyongyang
tested a nuclear Weapon.
4. Pyongyang is economically dependent on
China.

11. • Support for Pyongyang provides a buffer zone
between China and South Korea.
• North Korea’s trading terms and port
operations are favorable for China, growing
Chinese firms invests there.