Product Four

Foreign trade, also known as "international trade" or "import and export trade", refers to the exchange of goods and services between one country (region) and another. This trade consists of two parts: import and export. For the country (region) that imports goods or services, it is called import; for the country (region) that exports goods or services, it is called export. This phenomenon emerged and developed in slave societies and feudal societies, and became even more rapid in capitalist societies. Its nature and function are determined by different social systems.

Equivalence trade: A trade method where the seller purchases goods or services of equivalent value from the buyer.

Exhibition trade: An international fair or market held in the home country, concentrating on import and export transactions for a certain period of time.

Processing trade: Usually referred to as "three-in-trade", including processing trade with imported materials, assembly trade with imported components, and sample processing trade. It is also called processing trade.

Compensation trade: First, import machines, equipment, and technologies from abroad in the form of credit purchase. After production begins, use the products and services produced to repay the principal and interest of the loan. (Compensation trade combined with processing trade is usually called "three-in-one-compensation".)

1. Developing foreign trade enables the exchange of goods and the adjustment of supply and demand, thereby achieving the optimal allocation of resources.

2. Developing foreign trade can save social labor and yield better economic benefits.

3. Developing foreign trade allows for the absorption and introduction of advanced scientific and technological achievements from the contemporary world, thereby enhancing the economic strength of the country.