Trading Nation – The World’s Forex Trading System Explained
A trading nation is a nation in which international trade constitutes a big percentage of its gross domestic product. Trade involves purchases and sells of goods both near and far. In a trading nation goods are traded for the purpose of making profit through sales. There are many reasons which can be attributed to the growth of commerce in a nation.
One of the most important reasons for developing a trading nation economy is China. China manufactures the bulk of the world’s electronics and other consumer goods, including automobiles, clothes, footwear, computer equipment, and appliances. China’s economy is mostly based on exports. The country’s economy is growing at about 4% annually. The country exports over $3 trillion dollars worth of goods to over 200 countries.
Another reason for the growth of commerce in a trading nation is that China is becoming a major exporter of some vital commodities. China is now the leading exporter of many vital commodities such as petroleum, copper, iron ore, steel, wheat, and other agricultural products. It also takes fourth place in the world exports of crude oil.
Most importantly, China’s ever-growing economy is currently allowing it to become a major exporter of capital goods such as money, securities, and commercial loans. China’s trading system allows Chinese exporters to sell products to other exporters at less than the price of these products in the United States and Europe. This practice is known as export subsidization or zero import cost advantage. Since China’s trade surplus exceeds $US3 trillion, this translates to huge profits for Chinese exporters.
China’s ability to use its surplus earnings to buy large amounts of U.S. Treasury debt, which is issued by the U.S. Federal government, has been one of the largest drivers of the U.S. stock market. China’s low currency has made it possible for Chinese importers to purchase large amounts of U.S. Treasuries without having to pay any duty or tax. Of course, this has not stopped China from buying Treasury bonds as well. In fact, China is the largest single foreign buyer of Treasury bonds, second only to the United Kingdom. That’s right, folks in the United States are buying Chinese debt just so they can purchase more of the same to help smooth the way out of their current financial crisis.
Now you know why China is the trading nation of the 21st century. Not only have they been able to successfully jump starting the global economy, they have paved the way for the rest of the world to follow suit. Now you as an individual, can take advantage of the same advantages the Chinese have had to start and quickly become an international trader as well. Don’t miss out on your chance to make money because you don’t have access to the internet.