What does Hainan Free Trade Port mean?

The full name of Hainan Free Trade Port is Hainan Free Trade Port. As the name implies, Hainan Free Trade Port will be a free and open economic activity area. In the planning, Hainan Free Trade Port can fully exchange capital and trade.

The significance of Hainan Free Trade Port is that it can make the economic exchange between China and ASEAN more effective, and the emergence of bulk logistics will surely give birth to a world-class logistics center.

Trade refers to the general name of buying, selling or trading, and usually refers to all exchange activities or behaviors with money as the medium. Its scope of activities includes not only the commodity exchange activities engaged by merchants, but also the commodity trading activities organized by commodity producers or others; Not only domestic trade, but also international trade between countries.

In the ancient market, there were both material commodity transactions and slave transactions. In the modern market, in addition to tangible commodity trade, there are intangible trade activities such as technology, capital, information, labor services, insurance and tourism.

Import and export exchange ratio

The exchange rate of export commodities and import commodities. Also known as the comparison of import and export commodity prices, it is usually expressed by an index, that is, the comparison index of import and export commodity prices. The calculation formula is: terms of trade index = export price index/import price index × 100. For example, based on the previous year, the price indexes of import and export commodities were all 100, and the prices of import and export commodities all rose, but the increase rates were different. If the export price increases by 10% and the import price increases by 5%, the terms of trade index will increase.

The term of trade index higher than the base period means that the price of export goods is higher than that of import goods, that is, the country can exchange less export goods for more import goods, which is beneficial to the country and improves the terms of foreign trade.

On the contrary, if the price index of imported goods grows faster than that of exported goods, or even the price index of exported goods remains unchanged or decreases, the terms of trade index is lower than the base period, which means that a country has to export more goods in exchange for the same imported goods, which is obviously unfavorable to the country and is a deterioration of the terms of trade. This change is usually used as an indicator of unequal exchange between developed and developing countries.

Terms of trade refer to the ratio of a country's export commodity price index to its import commodity price index. Based on a certain period, the terms of trade are 100. If the terms of trade in the comparison period are greater than 100, it shows that the country can exchange less export goods for the same amount of imported goods, and the terms of trade are improved, which is beneficial to the country. If it is less than 100, it means that a country needs to export more goods in exchange for the same amount of imported goods, and the terms of trade deteriorate, which is unfavorable to the country.