General Business and Finance Blog

People have been investing since the beginning of time. When one is investing, the “investor” supplies cash (capital) to help a business. The business in turn gives the investor an ownership stake in the business. When we’re talking stock and companies, this investment results in the investor receiving shares of the company. When one invests in a company they are expecting the company to grow well and prosperous resulting in the investor making a profit on their investment.

There are a few ways for these investments to occur. When a company first goes public the company sells some shares to the public, this is an Initial Public Offering (IPO). These offerings create an influx of capital for the corporation, even raising millions or billions of dollars. As with the first example, the investors in this IPO receive shares of stock in the company and therefore own a piece of the company.

The act of “trading” would be to take the shares of a company and sell them for profit, with the aim of repurchasing the shares back at a lower price. Trading is not a very liked occupation. The media considers it gambling and the actions of those traders with very large bankrolls can be scrutinized for improprieties. In recent years traders have been looked at in a kinder light than the past buy day trading is still frowned upon as an activity.

Stock trading varies greatly from investing in that an investor jumps into a company and holds on for a period of time. The trader buys and sells the fluctuations of the stock within the stock market. Looking to make profit and risk less capital. A trader trades many different time lines, they day trade, swing trade, long swing and scalp.

For example: A trader enters into an investment in an IPO because the company looks promising. News breaks on the company and a lot more trades become interested. With everyone buying shares, the demand for the companies stock causes the price to rise. When the example trader first entered the stock at the IPO stage he paid a share, now the demand causes the price to hit and now even . This triggers all the trading alerts and trader jump in and buy the hot stock pick. This drives the price up and over 0 in a very short amount of time.

How did this happen? A company with a solid share structure had great news and looked undervalued, investors and traders both bought in seeing a chance to make money on the hot stock. This drove the price up 10 fold. Nothing else has happened, the company isn’t now making profit, and who knows if the news will even pan out to be profitable. At this point the original investor could sell his shares for a huge gain. Or, the investor can hold on to see if the price doubles again or heads downward as the company grows.

If I’m that investor, I sell. I’m taking away all the risk and locking in my profit. That makes me a trader though, as I’m buying and selling the run in the stock. The investor would have let the company grow and grow hopefully becoming very profitable. This is the main difference between investing and trading. Since your always looking to gain profit, how long will you hold. The original investor can always wait for the price to drop a little and re enter if he really wants to invest in this company.

Over time the terms trading and investing have changed to mean different things. With the rising popularity of day trading, trading is often looked at as buying and selling over a shorter period of time. While investing is viewed as holding on to shares for a longer period of time. These definitions are not completely accurate but this is how trading and investing is viewed. In reality, a lot of this is in the traders or investors mindset as they enter the stock market. These mindsets are completely different and you better know what your doing before you put your hard earned capital into the stock market.

As mentioned before, day trading is a frowned upon buy the general public. Those who only invest like to point out that most day traders lose money and that day traders have lost fortunes in a short amount of time. They also consider it gambling. Traders like to point out that investors held onto their shares during the internet bubble and lost everything, waiting for a turn for better money. When done poorly, both trading and investing can lose you a lot of money.

Day trading is based on knowledge, skill, technique and a little “feel”. You have to put your rules in place and stick to them. You put these rules in place for a reason, you can’t not stick with the rules as soon as a stock heads the wrong way, this will only compound your losses. Sometimes this can be tough as you just “know” your right, and sometimes you will be right and sell only to watch the stock rise again. There are a bunch of day trading strategies you will not be good at all of them. Pick the strategies that work best for you and trade them following your rules.

These are just some of the many ways that trading is different than investing. I can’t say either is better. I day trade to make money but I have IRA’s and 401k’s that are pure investment. Mostly funds where I let those more in tune with fundamentals (hopefully) pick their stocks. With day trading I set my rules and trade the technical highly volatile stocks.

The only way trading or investing is wrong is when you lose money. If your making money, your doing it correctly as that is the goal.

How To Trade Currency

Do you take place to know how the fastest growing investment opportunity option is perfect now in our world? No, it is not particular Multi-Level-Marketing scam working to urge some unconventional fruit beverage who promises anti-oxidant boosts and improved health. No, it is not some get rich quick scam either! I experience observed tons of them in my day and I can say to you we are not discussing get rich quick here. What I am talking about in this article here, is called Forex. How To Trade Currency

Forex is an investment market where your country’s currency is being traded for another country’s currency and the deviations between the purchase and selling of currencies is where you either make or lose money. Forex is a round-the-clock 24 hour market where close to a whopping four trillion dollars is traded on a daily basis. Now the forex markets are not open on the weekends, but between Sunday evening/Monday morning and Friday afternoon/evening you can trade any part of the day or night. In currency trading, you have a multitude of options for what currencies that you want to trade. How To Trade Currency

Perhaps you want to sell the euro against the United States dollar or maybe you want to sell the Japanese Yen against the English pound. There are several different trading strategies taken for account for each currency pair. Not one strategy is going to work for two different currency pairs. If you try to trade the EURUSD and USDJPY the same way, you will most likely lose your shirt. Both currency pairs resemble different financial situations and cannot have the same volatility or movement behaviors. How To Trade Currency

To learn about forex, there are different ways to figure out the currency movements in a given currency pair. This is what we call Technical Analysis. There are different strategies from reading the financial news and the reaction to certain events, to measuring the candlesticks that are generated on the forex charts to reading oscillators that detect potential future movement. And there are the automated trading systems. How To Trade Currency

Yes, the automated forex expert advisors that are pre-programmed with a trading strategy in mind to work in a certain method in hopes of sending profits back to a given investor’s trading portfolio. If you lack the experience of knowing how to trade currencies, then maybe you should consider using an automated forex trading system such as an expert advisor. How To Trade Currency

Learn from how these systems react to price action and see how they make trades and help the investor increase his profits. Stop what you are doing RIGHT NOW and get your Life Changing How To Trade Currency Program. It’ll change your Life Forever!

Forex Trading Tutorial

In the first and foremost place, there is a bickering regarding the intro-mission of trading robots presently in the trading industry. One of the most fundamental truths these types of traders do not understand is that such forex application didn’t just appear about, some of the trading software took nearly 38 years of development. Forex Trading Tutorial

To boot, well-celebrated loyalists in the trading region have modernized a large amount of these Forex automation, they undergo gained eminent experience and vast skills in the trading market. For example, one trading robot-the Forex Megadroid, that was made by cement industry gurus. Megadroid was contrived with the purpose to make Forex trading uncomplicated, more agile, and accurate. In addition, Megadroid features the capacity of assisting traders pay heed to other business concerns while the trading tool advances trade for them with backed up information that exercises precise live trade. Forex Trading Tutorial

Megadroid engineers, (John Grace and Albert Perrie) allotting to the Megadroid internet site page critiques, the software contends trade outstandingly well. It constitutes a foretelling power of about 95% precise. The scheme processes an algorithm technique that can assure future trade applying previous accomplished techniques. Albeit, Megadroid blusters of a trading success of almost 1,384.84% full gains-with only 8 months in the Forex. With these outcomes, Megadroid discoverers have guaranteed traders of utmost returns. For example, they’ve ascertained returns of 4 dollars per every single dollar vested. Forex Trading Tutorial

Amidst the most of all important things you will get freely in a foreign trade business, is the Forex tutorial that is available at the Megadroid’s software and this cast of trading does not require the substitution of whatsoever palpable product. In the foreign exchange, trade often happens electronically and is regarded as inter-bank proceedings or-over the counter trading. Forex Trading Tutorial

This apparently implies you don’t have to be corporeally in a central financial institution for you to participate in trading. All you would require is your computer and a cyberspace access. To boot, Forex Megadroid ensures well-detailed client service support. Megadroid besides features plug and play capability, installation takes approximately five minutes. And finally it also features simple tutorial schemes for unfledged investors who still can not comprehend how the market operates. Stop what you are doing RIGHT NOW and get your Life Changing Forex Trading Tutorial Program. It’ll change your Life Forever!

Trade shows show promise as a “golden” marketing opportunity. Many business owners are stepping outside of the traditional box and investing in portable signage. Talking one-on-one with potential buyers provides an immediate gratification that is empowering. The trade shows makes highlighting business services or products easier. Plan AheadWorking trade shows requires some planning. If possible, visit the facility prior to selecting your booth. Walk through the facility looking for potential problems that would inhibit your success, such as:Food court: Although being located next to the food court could be beneficial, it creates a distraction. It’s difficult enough to interest a potential buyer in 3-minutes; you don’t need the sweet smell of cotton candy interrupting.Competition: Don’t be suckered into renting a booth that is right next to a competitor. Some people believe its quality that counts and are eager to take the challenge of competition. Accessibility: Ideally, your booth should be near the entrance or exit of the building, or the restrooms, or the main isle. Wherever there is an adequate flow of traffic.The location of your booth and the signage you use will have a direct result of your trade show success. Stay focus on the appearance of your site. Use a banner to display your company logo, web address, and phone number. It’s important you capture the attention of potential buyers with signage and color.Keep it short and simple, K. I. S. S. Use a secondary color to present information of importance. The two-tone color method adds depth and retains the attention of the reader and that’s a big advantage.Most booths are no more than a 9` by 5` area. So it is equally important that you make valuable use of the area. Eliminate any unnecessary clutter and keep things organized. It’s important that your potential buyer doesn’t become distracted.Offering a special is also a good way to bring more people to your booth. Use a tripod and display board to feature your special offer. Write clear and in large lettering. Be prepared to answer questions.Working a Business Trade ShowBusiness trade shows go hand in hand with network marketing. The primary purpose of this type of trade show is to draw the interest of other businesses. Your objective is to provide enough information for the other participants to promote your services or products by word of mouth or through passing literature.It’s common practice for business groups to exchange business cards and brochures at a business trade show. Each booth gives a 2 minute presentation to visitors, a free gift (ink pen, magnet, sticky notes, or eraser), and ask for the visitors literature. Professionals shake hands and begin asking questions.• How can I assist you?• What are the benefits of using your services or products?• Who is your target market?• How can potential buyers reach you?• Do you work outside of your area?Business trade shows are not limited to business owners. Most vendors will invite others that may profit from using the services or products of the network group. Finding a good booth, using the proper signage, and displaying a sample of your services or products are all-important elements of trade show marketing.Some believe network trade shows are more profitable. While others, think a trade show that deals directly with the consumer has more advantages. The secret to successfully marketing your business at a trade show lies in the tools you use. If you have a dynamic personality, make your next marketing strategy a trade show.

Trade shows according to Investorwords refer to events wherein the products and services of a business are exhibited and demonstrated. Based on this definition, it is undeniable that trade shows really play a major role in advancing the marketing efforts of a certain business. Trade shows serve as the ideal spot where different buyers, sellers, suppliers and retailers meet to do business. Many visitors attend a trade show that’s why it is considered to be a very ideal means of marketing a business. Aside from high visibility, your business is also given the chance to get a hold of effective branding. Surely, you don’t want to miss the chance to take your business to the next level. With trade shows many doors of opportunity are within your reach.But the question is how will you manage a trade show? How will you direct the attention of your prospects to your booth? Managing a trade show will never bring you trouble when you know the proper way to do it. You need to take into account several things just to make sure that you’re on the right track.Here are some basic steps that you must follow in managing a trade show:1. Create a strategy. The main purpose why you take part in a trade show is to build relations with your customers. Study which trade shows would bring out the best in your business. When you’ve evaluated which shows is the best; then it’s time to plan for the trade show.2. Do some pre-show promotions. Have some direct mail marketing. Use some kind of a teaser to secure the interest of your potential customers. Make contact with your prospects even before the show. This way you’re a one step closer to accomplishing your trade show objectives.3. Grab the attention of your targets. Don’t wait for the trade show visitors to find you. You should make a way for your booth to get noticed. It’s quite confusing however on how you will be able to do this. Even experts argue on which strategy is better. Some says that to get noticed you have to use bold and flashy trade show displays. While others say that it’s more effective when you use simple designs in your trade show displays. The bottom-line is to persuade your prospects to opt for your products and services. 4. Establish good relations. In trade shows, you make contact with your prospects in person. You don’t just present your products with your customers. You must learn the proper questions to ask. By asking the right questions to your customers, you’re able to get to know the customer better; thus it’s easy to build rapport between them.5. Make a follow-up after the show. Follow-up is very important in the absolute fulfillment of your trade show objectives. Leads are useless when they’re not activated. For this reason, it’s best if you would make a follow up five days after the trade show.Trade shows are ideally for the benefit of small businesses. It is very suitable especially when you want to make it in the industry without wasting your time, money and effort. If you want a fruitful business, then you must follow these steps. These steps will lead you one step closer to achieving a successful trade show promotion.

PhD Research proposal:

Supervisor: Professor Lan Yisheng

Shanghai University of Finance and Economics

 

Analysis of Chinese Trade and Foreign Direct Investment on eight African countries Economic Development

  

I-Introduction

 

China’s newfound interest in trade and investment with African-home to 300 million of the globe’s poorest people and the world’s most formidable development challenge presents a significant opportunity for growth and integration of the Sub-Saharan continent into the global economy.

These emerging economic “giant” of Asia is at the center of the explosion of African-Asian trade and investment, a striking hallmark of the new trend in South-South commercial relations. Both nations have centuries-long histories of international commerce, dating back to at least the days of the Silk Road, where merchants plied goods traversing continents, reaching the most challenging and relatively untouched markets of the day.

Chinese trade and investment with Africa actually dates back several decades, with most of the early investments made in infrastructure sectors, such as railways, at the start of Africa’s post-colonial era.

China’s fast-growing economic ties with Africa are attracting considerable attention. The relationship came into the spotlight during the summit of the Forum on China-Africa

Cooperation (FOCAC) in Beijing in November 2006 and the Annual Meetings of the African

Development Bank (AfDB) in Shanghai in May 2007. While the expansion of trade and investment between Africa and China has been generally welcomed, concerns have been expressed about how China’s growing presence might affect African development (These concerns range from debt sustainability and governance reform to environmental impact; see news reports in Les Echos, October 24, 2006 (in French); Financial Times, November 28, 2006, and News Edge, May17, 2007).

Today’s scale and pace of China’s trade and investment flows with Africa, however, are wholly unprecedented. The volume of African exports to Asia is accelerating. It grew by 15% between 1990 and 1995; it has grown by 20% during the last five years (2000-2005) (Harry G. Broadman: “Africa’s silk road”; China and India new Economic Frontier).

Trade between Africa and China began to accelerate in about 2000. Between 2001 and 2006,

Africa’s exports to China increased at an annual rate of over 40 percent, rising from US$4.8 billion to reach US$28.8 billion in 2006 (Figure 1 and Table 1). During the same period,

Africa’s imports from China quadrupled to US$26.7 billion. In 2006 Sub-Saharan Africa

(SSA) accounted for the bulk of the Africa-China trade; the region’s exports to China amounted to US$25 billion, about 85 percent of all African exports to China that year.

According to statistics compiled by China, for 2004–06 Africa ran a small trade surplus, about US$2 billion each year (See IMF Working Paper (2007) “What Drives China’s Growing Role in Africa?” Jian-Ye Wang).

 

The acceleration of South-South trade and investment is one of the most significant features of recent developments in the global economy.

Trade between China and Africa is also expanding rapidly. Valued at only around $3 billion in 1995, total trade grew to an estimated $40 billion in 2005. Premier Wen Jiabao of China stated during the China-Africa Cooperation Forum summit that China hopes to increase that amount to $100 billion by 2010.

Table 1: China Imports and Exports from Africa (US$ millions)

  

Figure 1: China-Africa Trade Statistics 1995-2005

 

Source: World Atlas Trade Data, Tralac Analysis (Centre for Chinese Studies, Stellenbosch University (South Africa))

China started providing aids to Africa in 1956. By May 2006, it had contributed a total of 44.4 billion yuan (US$5.7 billion) for more than 800 aid projects, according to a researcher at the Chinese Academy of Social Science (He, 2006). The last officially reported flows were in 2002, when the Chinese government reported that it provided (US$1.8 billion) to support Africa.

China has also been providing debt relief to African countries on its own terms. At the first China-Africa Cooperation Forum in October 2000 in Beijing, the Chinese government pledged to write off in two years overdue obligations on 156 loans owed by African countries; these equaled to 10.5 billion yuan (US$1.3 billion). The pledge was fulfilled ahead of schedule (He, 2007).

Chinese capital flows to Africa in the form of foreign direct investment (FDI) are growing. While in the past many of these investments were limited to the raw materials sector, the current wave involves firms from many countries and sectors than ever before. This foreign investment also has many implications patterns and the development of the bilateral trade and integration. Many African exports are channeled through multinational enterprises, helping to integrate African countries both with one another and with the global economy.

 

Table 2: Chinese capital flows to Africa

 

Figure 2: China FDI flows to Africa

 

Source: Jonathan HOLSLAG “China’s FDI in SUB-SAHARA AFRICA” Brussels Institute of Contemporary China Studies.

So far, the nature of these flows has been quite similar to those between Africa and its traditional trading partners noted in the OECD studies (2005-2006) (OECD study, The Rise of China and India: What’s in it for Africa?). Against this backdrop, there is intense interest by policy makers and businesses in both Africa and Asia, as well as by international development partners, to better understand the evolution and the developmental, commercial, and policy implications of African-Asian trade and investment relations. This interest is reflected, perhaps most notably, in the South- South discussions held during the African-Asian summit in Jakarta in April 2005 celebrating the fiftieth anniversary of the Bandung Declaration, where the dramatic rise in international commerce between the two regions figured prominently, as well as at the July 2005 (G-8 summit in Gleneagles G8 Summit took place at Gleneagles Hotel, Perthshire, Scotland on 6-8 July 2005), where the leaders of the North underscored the growing importance of South-South trade and investment flows, especially as they pertain to the prospects for fostering growth and poverty reduction in Africa.

The importance of South-South trade has been recognized for some time; however, there has been no in-depth study conducted specifically on Africa-China trade relations to date.

The main objective of this study is to build a basic understanding of the potential of Africa-China trade and investment relations.

A literature review will be first conducted tracing the evolution of economic growth theories since Adam Smith to the present on the impact of commercial and technological aspects, resulting from international trade, on the physical accumulation and quality of productive factors.

Next, using historical data covering a sample of African countries, multiple regression analyses will be performed to determine the relationship between the specific determinants and real per capita economic (GDP) growth over a twelve year period. Using the results, conclusions will be drawn about the relationship among the determinants in their effects on long-term economic growth. Several additional trials will be carried out to determine more nuanced information and to test the reliability of the endogenous growth theory model.

The data will be collected according to the International Standard Industry Classification (ISIC).

 

II-Statement of the problem and motivation

II-1.Overview

China is not a new player in Africa. But its economic and political presence on the continent and its impact on Africa have grown exponentially in the last few years. This has huge consequences for Africa, but it also has significant implications for western policy towards the continent.

In thinking through how Africans and the wider international community should address the new challenges posed by China’s role on the continent, a critical starting point is to better understand the diverse impacts of China on Africa.

Like other parts of the world, Africa is being affected indirectly by the phenomenal growth of the Chinese economy.

It is clear that Africa must not loss its momentum and determination to tackle its development problems and attain the renewed vision of a prosperous vibrant region. In this regard the establishment of the China-Africa Forum came at a critical juncture, offering unconditional support for the AU (African Union) and its various instruments including NEPAD, which is being integrated into sub-regional and National development strategies.

Put another way the big question is how to kick start African poor countries out of a cycle of poverty throughout their trade relationship with China.

So, what is so important about economic growth? Economic growth leads to greater economic prosperity. Increasing overall prosperity improves the lives of those able to partake in the system. People are better able to provide for their needs and fulfill their wants, without the use of force. This rising prosperity is empirically linked to higher overall levels of human happiness and betterment.

Recent developments in growth theory have considered various sources of long-run growth, each of which involves an externality associated with some activity. Examples include human capital accumulation through either learning by doing or education and technological advance through R&D activities.

Additionally many policy makers and academics contend that foreign direct investment (FDI) can have important positive effects on a host country’s development effort, but that empirical evidence for FDI generating positive spillovers for host countries is ambiguous at both the micro and macro levels. In a recent survey of the literature, Hanson (2001) argues that evidence that FDI generates positive spillovers for host countries is weak. But Balasubramanayam et al. (1996) found that in developing countries pursuing outward-oriented trade policies, FDI flows were associated with faster growth than in those developing countries that pursued inward oriented trade policies (Laura Alfaro. “Foreign Direct Investment and Growth: Does the Sector matter?”).

A questions immediately arises relative our study and which we would like to answer is:

-What role does China-Africa trade relationship play in African countries economic growth?

 

-What is the contribution of Chinese outward FDI to host African countries economic growth?

 

II-2.The aim and Objectives

 

The need for base-line studies to assess the changing future impact of China on Africa and to the extent that trade links are an accurate reflection of the wider impact of China on Africa.

 

The main aim of this research is to understand the role of China in the economic growth process of African countries trough its trade relationship with those countries.

In order to achieve this, the key objectives are:

-See the Africa’s Position in International Trade.

-Present the statistics (data) on the Chinese net export with Africa.

-Measure and analyze volume and composition of trade between China and Africa.

-Measure the impact of the trade relationship on African countries trade balance.

-To examine the contribution of Chinese FDI on African countries economy.

-To determine whether FDI and ICT exerts different effects on African countries economic growth.

 

II-3.Expected finding

 

Since imports and FDI bring additional competition and variety to domestic markets, benefiting consumers, and exports enlarge markets for domestic production, benefiting businesses. Trade exposes domestic firms to the best practices of foreign firms and to the demands of discerning customers, encouraging greater efficiency. Trade gives firms access to improved capital inputs such as machine tools, boosting productivity and providing new opportunities for growth for developing countries.

We would expect to observe greater spillover effect through Chinese trade relationship with Africa on Africa economic growth. We also expect that Chinese FDI flows to Africa will tend to have a positive effect on African countries economic growth.

 

III-Literature context and issues:

China first became involved in Africa during the cold war, when it made friends and did business in parts of the world overlooked by the West and the Soviet Union. Its investment is paying off now in oil and raw material imports and markets for manufactured goods.

Since the 1960s, China has been rather consistent in offering assistance to African countries in agriculture, heavy industries, and infrastructure development. In recent years, Sino-African trade has enjoyed particularly rapid growth. As Paul Mooney reports, many African leaders, regarding China as a reliable friend who has suffered the similar imperialist aggression by Western powers, welcome investment and development teams from Beijing. Furthermore, the Chinese have not used their economic power to place political pressure on Africa. Skepticism, however, does exist. Some African scholars think that China is simply relaying the European colonial torch of purchasing raw materials from the continent and selling value-added products back, creating an unfavorable trade balance for Africa.

But “The Chinese are much more prone to do business in a way that today Europeans and Americans do not accept paying bribes and bonuses under the table. The researcher think that it will be much easier for some African countries to work with Chinese companies, rather than American and European companies, which are becoming more and more restricted by the publish what you pay initiative and others calling for better transparency” ( www.Catholicrelief.org).

While acknowledging such drawbacks, other Africans have welcomed the opportunity to diversify the continent’s external partnerships. They also appreciate the absence of explicit political or economic policy conditions on China’s part, in contrast to the sometimes heavy-handed approach of certain Western powers.

As to illustrate the landscape Macharia Gaitho, managing editor of the Kenyan daily Nation, commented  “As long as China is so willing to invest in Africa, we must not miss out on the bounty,” “But we must engage with our eyes wide open.” because : Charity and international aid will not solve Africa’s problems, but economic reform and growth can.(Allafrica.com)

 

China’s burgeoning relationship with Africa is alarming not only because it has facilitated Chinese energy and weapons dealings, but also because it is competing with U.S.–African trade. The China–Africa Cooperation Forum (CACF) was founded in 2000 to promote stronger trade and investment relations between China and African countries in both the government and private sectors.

 

In recent years, Beijing has identified the African continent as an area of significant economic and strategic interest. America and its allies and friends are finding that their vision of a prosperous Africa governed by democracies that respect human rights and the rule of law and that embrace free markets is being challenged by the escalating Chinese influence in Africa.

The love affair with China, however, may be sour as well as sweet. For countries that do not sit on oil or mineral deposits, higher commodity prices make life harder. Even for producers there are risks. A recent report by the World Bank argues that Africa’s new trade with China and India opens the way for it to become a processor of commodities and a competitive supplier of cheap goods and services to Chinese and Indian consumers. But another report, from the OECD (2005-2006), a club of industrialized countries, argues that China’s appetite for commodities may stifle producers’ efforts to diversify their economies. Oil rigs and mines create few jobs; it points out, and tends to suck in resources from other industries. And if Africa is to escape its vulnerability to the capricious movements of world commodity prices, it must start to export more manufactures. On this the World Bank adds its own warning: China and India must end their escalating tariffs on Africa’s main exports.

China is also bringing irresistible “some say unfair” competition to Africa. All over Africa Chinese traders can now be seen selling cheap products from the homeland, not just electronics but plastic goods and clothes.

The Chinese government has also actively promoted their own brand of economic development and reform model to African countries, encouraging government counterparts in several countries to visit China and learn from their experience. China’s efforts to encourage African governments to fashion their economic systems after their own is an important indication of the soft power that China hopes to ultimately project in Africa.

China’s soft power gambit can also be seen in its heavy investments in Africa’s educational systems, both by sending teachers to Africa and providing scholarships to African students from across the continent to study in Chinese universities. Between the start of the educational exchanges in the mid-1950s and 2000, 5,582 African students had enrolled in Chinese universities. These students typically spend two years learning Chinese, then study technical subjects, particularly engineering disciplines. Currently, about half of African students are pursuing advanced degrees. This support for education improves China’s image in many countries, builds grassroots support in local communities and a better understanding of China among the educated elite.

IV-Methodology and Hypothesis

 

The trade performance of individual countries tends to be a good indicator of economic performance since well performing countries tend to record higher rates of GDP growth. The majorities of developing countries has joined the World Trade Organization (WTO) and have taken initiatives aimed at opening their economies.

But the net effect of trade openness on economic growth has been and remains a subject of controversy.

Two issues are at the center of the debate: theoretical elaboration and empirical investigation.

On the theoretical side, since the time of Adam Smith through Ricardo and Solow, trade has been shown to allow a country to reach a higher level of income since it permits a better allocation of resources.

Imports bring additional competition and variety to domestic markets, benefiting consumers, and exports enlarge markets for domestic production, benefiting businesses.

But the benefits of international trade for economic growth and development are difficult to understate.

In models of endogenous growth, trade can impact upon growth by allowing access to the innovative products of other countries. Since most LDCs do little if any innovation it is primarily through trade with developed countries that they profit from higher levels of technological development. Also Foreign Direct Investment is viewed as a major stimulus to economic growth in

developing countries.

We will predict manufacturing imports of China to a sample of African countries over a 12-year period (1995-2007). To predict such imports we will use a variety of measures of trade, China FDI, the GDP and GDP per capita of the importer and exporter.

With computer programs such as SPSS, Eviews, Matlab and SAS the study will consist on quantitative analysis using secondary studies. The sample will consist on some African countries. This particular sample will be chose based on the availability of data for each of the variables need in the project for the countries in question

 

In order to analyze the China’s role in Africa economic growth the analysis will first applies numerical measures to evaluate the evolution the trade performance index of individual countries and the index of overall, after we will adopt the empirical studies on intra-industry trade (IIT); the level of IIT in an industry is usually quantified by the Grubel and Lloyd index (1975). We follow the same fashion in this study. The index of IIT in an industry is generally defined as:

  

In the equation, refers to unit value of exports, while  refers to unit value of imports at time t.

 

IV-1.Time-series data analysis

 

Hence there are several preliminary steps to using time-series data in econometric analyses.

In many cases, particularly with macroeconomic data, it is reasonable to conclude, on the basis of theoretical considerations and by looking at a plot of data against time that a variable is or is not growing. Such growth could occur via a deterministic time trend, or it could occur because the annual change in the variable is equal to a constant.

 

Initially it is essential to determine the form in which the data can be used for any subsequent estimation; in many instances using macroeconomic data in their levels leads to serious econometric problems. Time-series data typically contains a trend, which must be removed prior to undertaking any estimation. The traditional detrending procedure separates the trend from the cyclical component of the series. This procedure is appropriate for trend stationary (TS) time-series. However, many macroeconomic time-series are difference stationary (DS). DS type time-series are nonstationary and they contain unit roots. The DS type sequences must be differenced prior to any meaningful econometric estimation. If ordinary least squares (OLS) estimation techniques are applied to undifferenced DS type sequences, resulting error terms are serially correlated. This renders any subsequent hypothesis tests unreliable.

 

IV-2.Econometric Techniques:

 In order to examine the hypotheses, suitable econometric models are required.

Since the objective of this research is to test the Granger-causality of several variables, the test should be based on the appropriate multivariate times series models (could be VAR ?vector autoregression? or VECM ?vector error correction model?).

The examination procedures conducted in this paper is that, firstly, unit root test at the levels and first differences are conducted to determine whether each variable is stationary or non-stationary. Secondly, the Engle-Granger residual-based test tests the existence of cointegration among the variables for each country. Thirdly, if a cointegration relationship does not exist, VAR analysis in first difference is applied, however if the variables are cointegrated, the analysis continues in a cointegration framework. Finally, the Granger-causality test is conducted based on the chosen analytical framework.

 

Figure 3: depicts the methodology heuristics.

 

Therefore, the overall methodology is as follows:

- test if the system is stable, using the unit root tests

- if there are unit root tests on the series of variables, apply cointegration tests

- if cointegration is found, then obtain the VECM representation of the system and apply causality tests on this representation

- if there is no cointegration, simply differentiate the variables to obtain the VARD (vector autoregressive representation on differences) representation and apply causality tests of VARD representation

- if the systems is stable, the use of the simple, initial VAR representation for causality tests.

Some methodological problems still have to be solved. These regards how we should collect and represent the data, which should be the autoregressive order of the system, what variables the stochastic model should comprise.

 

IV-3.Aggregate Production Function

Observing from theory the possible growth promoting roles of both FDI and Trade, our data analysis is modelled in an aggregate production function (APF) framework. The standard APF model has been extensively used in econometric studies to estimate the impacts of FDI inflows and trade on growth in many developing countries. The APF assumes that, along with “conventional inputs” of labour and capital used in the neoclassical production function, “unconventional inputs” like FDI and trade may be included in the model to capture their contribution to economic growth. The APF model has been used by Feder (1983); Fosu (1990); Ukpolo (1994); Kohpaiboon (2004); Mansouri (2005); and Herzer et al (2006) among others.

Following Herzer et al (2006), the general APF model to be estimated is derived as:

                                             1

Where  denotes the aggregate production of the economy (real GDP per capita) at time t, and  are the total factor productivity (TFP), the capital stock, and the stock of labor, respectively. According to Lipsey (2001), the impact of FDI on economic growth possibly operates through TFP (A). Moreover, from the Bhagwati’s hypothesis (Bhagwati, 1985), any gains from FDI on TFP will surely be dependent on the volume of trade of a particular host country. Since we want to investigate the impacts of FDI inflows (FDI) and trade variables on economic growth through changes in TFP, we assume therefore that TFP is a function of FDI, M, X and, other exogenous factors. Thus:

                                              2

Combining equations (2) with (1), we get:

                                               3

 where  and are constant elasticity coefficients of output with respect to the  and From equation (3), an explicit estimable function is specified, after taking the natural logs of both sides, as follows:

                                               4

 where all coefficients and variables are as defined, c is a constant parameter, and  is the white noise error term. The sign of the constant elasticity coefficient  and ?are all expected to be positive. Equation (4) represents only the long-run equilibrium relationship and may form a cointegration set provided all the variables are integrated of order 1, i.e. I(1).

 

From equation (4) Y is defined as real GDP per capita; FDI is the value of foreign direct investment flows; X is the value of the current country export to China and M is the value of the current country import to China; L is measured as the volume of the total labor force; since a time-series on the capital stock is not directly available for African countries, K is proxied by the real value of gross fixed capital formation (GFCF). This proxy for capital stock has been used in many previous studies. See Balasubramanyam et al., (1996), Kohpaiboon (2004), Mansouri (2005) among others.

 

IV-4.ARDL Model Specification

 

In this Section, the Autoregressive Distributed Lag (ARDL) bounds testing approach proposed by Pesaran, et al. (2001) will be used to examine the dynamic relationship between FDI, import and export for the 8 African countries. As pointed out by Narayan and Narayan (2005), the bounds test which is based on the estimation of an unrestricted error correction model (UECM) has several advantages over the conventional type of cointegration techniques. First, the standard Wald or F-statistics used in the bounds test has a non-standard distribution under the null hypothesis of no-cointegration relationship between the examined variables, irrespective whether the underlying variables are I(0), I(1), or fractionally integrated. Therefore, the bounds test obviates the uncertainty associated with pre-testing for unit roots as it does not require the information for the order of integration of the variables. Otherwise, the ARDL approach can be applied whether the regressors are I(1) and/or I(0). This means that the ARDL approach avoids the pre-testing problems associated with standard cointegration, which requires that the variables be already classified into I(1) or I(0) (Pesaran et al, 2001). If we are not sure about the unit root properties of the data, then applying the ARDL procedure is the more appropriate model for empirical work. Second, it is more robust and is the more statistically significant approach to determine the cointegration relation when applied on a small sample study compare to Engle and Granger (1987) or Johansen type of cointegation methods that require large data samples for validity. Third, the short as well as long-run parameters of the model could be estimated simultaneously. Fourth, once the orders of the lags in the ARDL model have been appropriately selected, we can estimate the cointegration relationship using a simple ordinary least square (OLS) method. The UECM used in the present study has the following form as expressed in the below Equations.

 

On the basis, the conditional VECM of interest can be specified as:

                                                     5

 where ?are the long run multipliers,  is the drift, and  are white noise errors.

 

IV-5.Bounds Testing Procedure

 

The first step in the ARDL bounds testing approach is to estimate equation (5) by ordinary least squares (OLS) in order to test for the existence of a long-run relationship among the variables by conducting an F-test for the joint significance of the coefficients of the lagged levels of the variables, i.e., ?against the alternative

.We denote the test which normalize on Y by

. Two asymptotic critical values bounds provide a test for

cointegration when the independent variables are I(d) (where ): a lower value assuming the regressors are I(0), and an upper value assuming purely I(1) regressors. If the F-statistic is above the upper critical value, the null hypothesis of no long-run relationship can be rejected irrespective of the orders of integration for the time series. Conversely, if the test statistic falls below the lower critical value the null hypothesis cannot be rejected.

Finally, if the statistic falls between the lower and upper critical values, the result is inconclusive. The approximate critical values for the F-test were obtained from Pesaran and Pesaran, 1997, p.478).

In the second step, once cointegration is established the conditional  long-run model for  can be estimated as:

                                                6

 Where, all variables are as previously defined. This involves selecting the orders of the  model in the six variables using Akaike information criteria (AIC).

In the third and final step, we obtain the short-run dynamic parameters by estimating an error correction model associated with the long-run estimates. This is specified as follows:

                                                  7

 Here ??and  are the short-run dynamic coefficients of the model’s convergence to equilibrium, and ??is the speed of adjustment.

 

IV-6.Growth model

 

The purpose of the empirical analysis is to determine whether FDI exerts different effects on a country’s growth. Following Borensztein et al. (1998), Carkovic and Levine (2002), and Alfaro et al. (2003), we want to look at the direct effect of FDI on economic growth using cross-section regressions with 8 Sub-Saharan African countries for the time period 1995-2006.

Initially, as a benchmark, we calculated the impact of overall FDI inflows on economic growth based on the following equations:

                                                      8

 We pursue this analysis and test the direct impact of FDI had on the growth of two different countries sample divided as importers countries and exporter’s countries.

Growth here is the GDP growth.

 

Hypothesis:

1-  are positive.

2-The correlation between GDP and ICT is high.

3-The correlation between GDP and FDI is low.

4-there are no correlation between ICT and FDI.

  

Reference

 

1.Blomstram, Magnus, Steven Globerman and Ari Kokko.2000.The Determinants of Host Country Spillovers from Foreign Direct Investment,” CEPR Discussion paper No.2350

2. Branstetter, Lee G. 2001. “Are Knowledge Spillovers International or International in Scope? Micro econometric Evidence from the U.S. and Japan,” Journal of International Economics 53:53-79

3. Coe, D. and Helpman, E. (1995)”International R&D Spillovers”, European Economic Review, 39, 859-887.

4. Coe, David, Helpman and A. W. Hoffmaister.1997 “North-South R&D Spillovers,” Economic Journal 107: 134-149.

5. Xinhua He, Yongfu Cao: “Analysis and Forecast of World Economic Situation (2005-2006); Yellow Book of International Economy.

6. Xinhua He, Yongfu Cao: “Analysis and Forecast of the World Economy in 2006-2007”; Yellow Book of International Economy.

7. Grossman, G. M. and Helpman, E. (1991)“Innovation and Growth in the Global Economy”, MIT Press, Cambridge, MA.

8. Harry G. Broadman: “Africa’s silk road”; China and India new Economic Frontier.

9. Kao, C. (1999). “Spurious Regression and Residual-Based Tests for Cointegration in Panel Data”, Journal of Econometrics, 90, 1-44.

10. Kao, C. and Chiang, M.H. (1998) “On the Estimation and Inference of a Cointegrated Regression in Panel Data”, Working Paper, Center for Policy Research, Syracuse University.

11. Keller, W. (1998) “Are International Spillovers Trade-Related? Analyzing Spillovers among Randomly Matched Trade Partners”, European Economic Review, 42, 1469-1481.

12. Krishna, Pravin. 2003. “Are regional trading partners ‘natural’?” Journal of Political Economy

111: 202-226.

13. Liu, zhiqiang. 2002. “Foreign Direct Investment and Technology Spillover: Evidence from China” Journal of Comparative Economics 30:579-602.

14. SSB (State Statistical Bureau of China), Statistical Yearbook of China, Statistical Publishing House.

15. SSB (State Statistical Bureau of China), China National Science and Technology Committee, China Statistical Yearbook on Science and Technology, Statistical Publishing House.

16. OECD study, The Rise of China and India: What’s in it for Africa?

“Bottom of the barrel: Africa’s oil boom and the poor”, Catholicrelief.org.

17. Yuqing Xing. “Foreign direct investment and China’s bilateral intra-industry trade with Japan and the US” Bank of Finland, BOFIT, Institute for Economies in Transition. Discussion Papers 1.2007.

18. Laura Alfaro. “Foreign Direct Investment and Growth: Does the Sector matter?” Harvard Business School. April 2003.

19. Davidson, R. and MacKinnon, J.G. (1993) Estimation and Inference in Econometrics. New York: Oxford University Press, pp. 320, 323.

20. Gujarati, D. (2004). Basic Econometrics. 4th ed. New York: McGraw Hill, pp. 638- 640.

21. Stata (2003). Cross-Sectional Time Series. College Station, Texas: Stata Press, pp. 10, 62, 93, 224.

22. Testing Export-led Growth Hypothesis in Kenya: An ADRL Bounds Test Approach Mohan, Ramesh and Nandwa, Boaz. Bryant University, 03 November 2007.

 

 Links

-(Xinhua He, Yongfu Cao: “Analysis and Forecast of World Economic Situation (2005-2006))

-( Xinhua He, Yongfu Cao: “Analysis and Forecast of the World Economy in 2006-2007”)

-The main difference between these two types of time-series variables is the fact that TS type variables return to the deterministic trend function, whereas no such tendency exists with the DS type of time-series variables. Nelson and Plosser (1982) and McCallum (1993) provide a more detailed explanation of this point.

- A time-series variable is weakly stationary if its mean, variance, and covariance are finite, and if all of these are independent of time. If the variance increases over time, then the time-series becomes explosive. Given this fact, such time-series variables should not be used for hypothesis testing. For a further explanation of this point see Stock and Watson (1988), among others.

- Most of the variation in the data is across country, reflecting conditions that change slowly.

 

Often running a business becomes difficult for lack of adequate funds. It could be that there is a cash flow problem owing to seasonal slump in demand for your products or you could not get the payments in time. Or, you require greater funds to buy some expensive machinery, raw material or thinking of starting up a new trade. You can take out Small Business Finance for host of purposes. But you must be well prepared before applying for it.

First of all you should have your credit report thoroughly checked for any inaccuracies in it as the report is crucial in determining the rate of interest and terms-conditions.

Prepare a business plan, which should include the plan of investing the finance and your income sources for making the repayments. The loan providers will first scrutinize your business prospects in order to assess you for risks.

You can choose to borrow funds in secured or unsecured options under small business finance. Any of your commercial or residential property can serve as collateral for the secured greater amounts. The rate of interest will be lower and repayment duration also will be convenient in the range of 5 to 25 years. The unsecured option, however, comes with higher interest rate attached to it. You will borrow only a smaller amount for up to 10 years.

As far as sourcing of these loans is concerned, banks usually do not offer small business finance to new business, but you can get it for the established trade. To borrow the funds for starting a new trade, better explore opportunities on internet, where numbers of lenders can be contacted. Compare their rates and terms-condition for a suitable deal. Make the repayments in time for avoiding any debt build up and for making improvements in your credit rating as well.

After putting the New Years Eve noisemakers away in storage, it’s time to unleash the trade show giveaways. Following the holiday season is the busiest bundle of big business trade shows of the year. Chances are you’ve already reserved the best booth space and have chosen the most qualified employees to represent you. The coming weeks will be filled with important planning from what apparel your representatives will wear to what prospective clients you’re most interested in speaking with. Of course, one of the most important aspects to any trade show is the awesome swag you’ll be giving out.

The trade show giveaways that you select can help to boost traffic to your booth and block out the competition. But with so many items to choose from it can be hard to narrow down the selection. For those that can’t put their finger on the perfect giveaway, there’s an alternative option for you. Consider all of the giveaways you’ve used in your company’s past and choose the ones that were most profitable. Once joined with trade show favorites and other unique items, you’ll be ready to make your very own trade show giveaway wheel.

The brilliance of a trade show wheel will be seen as your booth quickly becomes the place to be. As attendees approach, it’s important to engage them. Have a representative out and about mingling with new visitors and controlling the crowd. Meanwhile, another representative can man the wheel and one more can network with serious inquiries. Depending on the number of company representative you have, more attendees can be spoken to at once. The important thing is to keep that wheel spinning.

Instead of running by your booth and grabbing a giveaway, attendees will focus a good amount of time exploring your company’s services and products. Not to mention, they’ll also go home with a wonderful gift. Depending on the construction of your trade show giveaway wheel, you can have anywhere from two to ten potential products. Using four items on your wheel is a sure fire way to attract attention without going overboard. For the sake of trade show tradition, include promotional tote bags and trade show snacks. These items will satisfy the needs of trade event connoisseurs but you’ll also want to throw in an exciting new item to generate a buzz for your business. You can use promotional electronics to create the hype and use your favorite all time promotional item to fill in the fourth slot.

As potential clients wait in line you can glance at their name tag and check your list to see if they’re an important prospect. Once they approach the wheel you can introduce yourself and welcome them into a friendly conversation. Because of your personable and professional approach to networking, they’ll be likely to stick around and converse with your other representatives. Even if attendees leave after receiving their prize, they’ll have an imprinted trade show giveaway with your logo on it. The fact that the giveaway went from their hands to yours to theirs also helps to rectify your services.

Using a giveaway wheel at your next appearance is a fun way to draw attention to the awesome services and products you supply. They’re perfect for businesses with surplus trade show items from the last few events and can even include further promotional slots like a special discount panel for more incentive. No matter what items you choose, rest assured that you’ll achieve awesome branding success. There are many possibilities to explore and yes, that’s right. You can give that trade show giveaway wheel a spin of your own, too.

There are many articles out there about how to set up your trade show booth. You need to have the right height for the table, the perfect lighting, and cool graphical banners with vivid colors. You will want a booth that is light-weight and easy to set up, and a few examples of your product or service to demonstrate to your potential clients. It all must look perfect.However, as a member of a sales team at the trade show, how do you keep up your stamina for what is normally an 8-12 hour day? Exhibitors must have mental and physical stamina to survive a busy trade show booth. Here are a few tips for surviving the trade show as an exhibitor.Shoes – Trade shows require sales teams to be one their feet and working most of the day, which is painful for both the feet and the lower back. Take steps to prepare for it. Women should wear professional looking shoes that have no heels. Standing on your tip-toes for 12 hours a day will not sell any more of your product. Men should wear comfortable, polishable shoes. Avoid sneakers, but don’t feel you have to wear dress shoes. As long as they look dressy and can polish up, you should be fine. Both men and women should wear shoe inserts, adding extra comfort and support to any pair of shoes.Clothing – Dress professionally, but comfortably. Ask the trade show managers in advance for what temperature they will keep the room and dress appropriately. Don’t wear something that looks fashionable but is itchy or too tight. Also, find clothes that are stain and wrinkle resistant. After 12 hours at a trade show, you want your clothes looking as good as they did when you started that morning. It’s also a good idea to bring an extra set of clothes just in case. Don’t get half-way through the trade show to discover your clothes are uncomfortable or sweaty and you can’t change.Energy – Bring energy drinks or other quick energy boosts with you. Also, keep eating and eat the right foods. Your body will not function well if you do not have the proper nutrition throughout the day. The same applies to water. You will feel tired and drained if you do not get the proper amount of water while you work, so keep a small cooler filled with water bottles behind your booth. You will need at least 8-12 cups of water while you’re working, more so if you are under warm lights. Take multiple small breaks if you can, switching out with another member of your sales team. During those breaks, take walks or do some stretches out of the view of your customers so your blood flow increases and your body stays refreshed.Knowledge and Manner – Know what you’re selling and like it. The best trade show display in the world can be ruined by an exhibitor who isn’t excited about the product. If you are having a bad day, hide it the best you can. Make goals for yourself and keep focused on them so you don’t get distracted. And make sure you can answer every question, no matter how obscure. Have someone from your sales team or even your family quiz you on product related questions, and make sure you answer in a polite and positive manner.Interaction – Interacting with potential customers can be fun but tiring. Make sure you are prepared to answer the same questions over and over again without wanting to strangle anyone. One way to do this is to tag-team your booth. Switch on and off with another member of the sales team to make sure that you are getting enough down time without compromising customer interaction and satisfaction. Be friendly and knowledgeable when answering question about your product or services. Remember, the idea is to build relationships and acquire a new customer base, not just sell stuff. Don’t over-react. Some people in the world are difficult, but keep your voice calm and answer question the best you can. If it turns into a ranting session, be polite and professional, but do not argue. Arguing with an irate customer will only make you lose focus and credibility. If you have an irate client who hates your product or service or who will not keep their voice down, remain calm and call security. The fault will be theirs and others will be impressed that you did not lose control.To survive a trade show as an exhibitor, you need to be prepared both mentally and physically. So follow these tips and make sure you have a great time at the next trade show.

If your business is regularly represented at trade shows, you need a quality trade show display that will give the right representation of your business. Trade show displays come in a variety of sizes with many different features, so choosing one is not as easy as you might think. Before you buy or order one, be sure to consider these things.
Size of the Display
Make sure the display is going to be the right size, both when packed and when in use. Trade show exhibits need to fit in the size of booth that you regularly use. If you regularly reserve double wide areas, for instance, make sure that the exhibit will cover the space well. On the other hand, if you regularly reserve the smallest area, make sure the display will not overwhelm it.
Also, you need to make sure that it is the right size when folded. Is it portable enough to easily move? If you regularly travel by yourself, will you be able to carry it? Will it be something you can check on the airplane, or will you have to pay extra fees for oversized baggage? Will it fit in the trunk of a small rental car? These considerations will help you narrow down your search.
Versatility
Another consideration to make is whether or not the display is versatile. Can you easily change the photos and text if you need to, or are they mounted permanently? Sometimes the display case has another function, such as serving as a podium or stand. If you are going to spend the money necessary to buy a display, you might as well get as much functionality out of the system as possible.
Set Up
Learn all you can about the setup of the display. Some trade show exhibits are quite difficult to set up, and even require special tools that you may not have on hand. If you are going to need some tools, make sure you bring them with you. Also, find out how many people are needed to set up the display. If you need several hands, but regularly travel by yourself, you probably need to consider a different display that is easier to put in place. Finally, find out how much time it will take to set up the display, and make sure that you will be able to give yourself that much time on a regular basis as you are traveling to exhibits.
Portability
Keep in mind that you will be regularly moving with your display case. Find one that is easy to transport. Wheels on the travel case are a great feature. Also, check for handles that will make transport easier. Finally, make sure the weight is not more than you can handle.
Purchasing Options
A final consideration is whether or not you really need to buy a trade show display. Believe it or not, trade show display rental is a very valid option. By partnering with a display booth rental company, you can get a quality display for a fraction of the price.
How does rental work? The rental company provides the display structure and some custom graphics and logos. Everything you need is included, including lights, chairs, when applicable, and display boards. Some set ups even come with television screens or computer monitors that can be used for videos or presentations.
One benefit of renting over purchasing, besides the ability to save money, is the fact that you do not have to replace components that stop working. If a light breaks, not because of your actions, the rental company will replace it. You will eliminate much of the stress that comes with owning your own display and being responsible for maintaining it. Unless you need to own your own display, renting is an economical and practical option.