ABSTRACT

In the shifting to information economy, traditional commerce is out of the steps of time because of its lot shortcomings. As the direct result from the development of cyber Internet technology, EC (Electronic Commerce) is the new direction of future business. EC includes EDI (Electronic Data Interchange) and business on web. It is a definitely new business model. With the development of Internet, EC is booming all over the world and has been greatly used in many countries. Now, EC extends its antenna to all aspects of the society, and it has affected the field of international trade greatly. The application of EC in the field of international trade would provide the competitive superiority over traditional trade such as lower sales and marketing costs, more business partners to be reached, increased business efficiency, enhanced customer service, reductions in inventories, marketing globalization and trading verification, etc. After the entry into WTO, there are many opportunities and challenges to China’s international trade.

This thesis starts with the basic conception of EC, and first introduces its development course as well as its characteristics, etc. In the second part, analyzes the main influences of EC on international trade from six perspectives. In the conclusion part, on the basic of analyzing the developing situation of EC and some special problems that emerged in China, indicates the countermeasures to promote the development of international EC in China.

Key words: electronic commerce, international trade, trend

Chapter 1 Introduction

1.1 The Connotation of E-Commerce

Electronic Commerce (EC) started to develop vigorously since mid-1990s, which is a newly emerging item on the basis of the information economy. And the knowledge and understanding of EC is still at an immature stage. At present, there are many different definitions of EC provided by various books or organizations in and abroad, and the EC researchers have also defined EC from different aspects.

Mark M. Davydov in US defines EC in his work as “the concept being applied for illustrating the exchange of commercial information and the automatic handling of the business through Internet”.

SUN in the field of IT regards EC as “the commercial transaction carried out through Internet”.

In 2005, the electronic commerce expert Liu Yafeng published his work “General Introduction to Electronic Commerce”, in which he proposed to understand EC from multiple perspectives, that is, to probe into the connotation of EC in different fields. He pointed out that “EC emphasizes the production and application of the new service plan, namely, `creating commercial value' and `making the biggest profit with the smallest amount of money' ”.

Although there is no united definition of E-commerce, EC represents the developing trend of the trading way. The application of it has become more and more widespread, and it would become an irresistible tendency.

1.2 The Developmental History of E-Commerce

The Electronic Commerce we usually talk about is that which received its development since 1990s, and was divided into different groups according to the types trading (B2B, B2C, C2C, G2B, G2C etc.) on the basis of the application way of browser/server. The developmental history may be divided into four stages according to the different technological characteristics and the application of each period.

The first stage: Time of EFT. In 1970s, EFT (electronic fund transfer) among the banks started to be promoted on the safe private network, which changed the flow of financial service. This was one of the most original forms of electronic commerce as well as the most popular one.

The second stage: Time of the transmission technology of the electronic texts. From the late 1970s to the early 1980s, in the form of electronic texts’ transmission technology, electronic commerce obtained promotion in the enterprises. The transmission technology of the electronic texts reduced the writing work quantity and raised the automated level of work, thus simplified the service flow.

The third stage: Time of on-line service. In mid-1980s, the on-line service started to be in fashion, which created the feeling of hypothesized community for the Internet users, and gradually formed the concept of “global village”. At the same time, the cost of the information visit and exchange has fallen into a very low level; moreover, the scope was experiencing unprecedented expansion, so that it was available for people all over the world to communicate mutually.

The fourth stage: Time based on the internet. From mid-1990s till now, there has appeared the application of www[i] on the Internet, which is the turning point of electronic commerce. “www” provided simple solutions to the problems in the filed of information publication and dissemination. The scale effect brought by “www” reduced the operational cost, and the scope effect that was also brought by “www” enriched the multiplicity of enterprise’s service activity. What’s more, “www” has created opportunities for the small enterprises, enabling them to compete with the cross-national corporations with abundant resources on the equal technological base.

1.3 The Characteristics of E-Commerce

Different from the traditional commercial ways, the superiority of electronic commerce is obvious. The following is a simple illustration:

Firstly, there is no limit of time and space in EC, which enlarges the trading opportunity. Through the Internet, the provider and customer are not confined by the factors such as working hours and regions, and can offer the order and deal with the business around 24 hours of a day without going outside. The Internet surmounts the limit of regions or nations and connects the whole world into a global village. And the trans-regional and the cross-national electronic commerce can also be finished in the mouse clicking.

Secondly, EC reduces the cost and enhances the trading efficiency. In the traditional commerce, a deal can only be made after the two sides’ participating the display, negotiating for several times and cautiously inspecting. A good example is the cross-national trade, the cost of which often makes many small and medium-sized enterprises be awed at the sight; moreover, the achievement of a trade calls for a long round of time. However, after the realization of electronic commerce, the identity and the credit authentication of the two sides can both be carried out online. Negotiation, signing, the transportation and the allocation are all finished online, which greatly reduces the cost and enhances the trading efficiency.

Thirdly, on the basis of the conformation of traditional commerce, EC has created new commercial opportunities. EC is a kind of brand-new commercial pattern, and several new types of trading means and methods would be created to adapt to EC.

Fourthly, the interactive characteristic of EC improved the quality of service. The interactive function is the biggest superiority of EC, by which the customer may order the product he or she likes by illustrating his or her demand on the network, so that the manufacturer will get the user’s demand and adjust the production accordingly, which greatly improves the quality of service. In addition, the manufacturer may receive the market’s feedback information through the online investigation or the online advisory service, which in turn improves the production.

Chapter 2 The Influence of E-Commerce on the Trend of International Trade

At present, the economical globalization has become a tendency, and the development of information technology revolution and Internet are urging the industry economy to transform to the information economy as well as the knowledge economy. Along with the fast development of information technology, the tendency of economical globalization and integration is speeding up unceasingly. The widespread application of information technology on the internet, as well as the realization of internationalization, informationization and paperless-ness of commercial activities through the computer, the network correspondence and the Internet have become a major tendency of the commercial development all over the world.

2.1 E-Commerce has Greatly Influenced the International Market

Although the improvement of the transportation and the communication level gradually strengthens the unity of the international market, it is electronic commerce that makes the international market realize the unification in the true sense during a short time.

Firstly, a unified global hypothesized market[ii] has come into being. The Internet has covered more than 160 countries and areas all over the world and has linked over ten thousand networks. The establishment of EC on the basis of the Internet has become a unified global hypothesized trading market.

Secondly, the value rule of market will work in a global scope. The formation of the hypothesized market has surmounted the former restriction of geographical boundary, making available for the related information of commodity and service to accurately flow in the global scope, which is with the characteristics of being public, complete and real-time. As a result, it reduces the dissymmetry of information between both sides of the import and export, and avoids the distortion caused by the incomplete market information. Hence the competition between the commodities of the same quality level is more and more intense, guaranteeing the full function of the value rule.

2.2 The Subject and the Object of International Trade Management have Experienced Important Changes

Along with the development of modern information technology, the electronic commerce is being widely applied in the international trade, with some hypothesized enterprises which provide the international market with products or service coming into being. And these hypothesized enterprises are not quite the same with others, as they might rapidly expand into the global scope. Moreover, as the electronic commerce technology simplifies the flow of international trade, it provides a facilitated channel for the small and medium-sized enterprises to enter the international market, which expands the developmental space of the small and medium-sized enterprises and enlarges the subject of international trade management.

After the apparition of the electronic commerce, a certain threat was posed to the intermediary organization of international trade, and the information network became the biggest intermediary agency, thus the status of the import and export business in the traditional trade has dropped correspondingly. In the traditional trade system, the import-export trading companies held extremely important status in the international market. The electronic commerce breakthrough the traditional trading pattern which mainly based on the unidirectional distribution and realized “the integrity of four factors” through the function of Internet, namely, taking the logistics as basis; the fund flow as the form; the information flow as the core; and the commerce flow as the main economical strategy. In addition, the electronic commerce puts together various traditional trading means such as agency and exhibition of management, and inputs the data which needs to be handled during the service flow into the computer, so as to provide the manufacturers and businessmen all over the world with omni-directional, multi-level and multiple-perspective commerce service through the network, as well as to eliminate the limit of space and time of the traditional trading activities.

2.3 The Cost Structure of International Trade has changed

As for the relationship between the development of the international trade sector and that of the national economy, the author suggests that consumer goods industries, such as textiles, were usually the first to undergo mechanization, because of their comparatively simple technology, their economical use of capital and the ease with which they drew upon existing pools of craft labor. As economic development proceeded, the share of the consumer goods industries in national output began to fall, relative to the share of the capital goods industries.

In the traditional international trade, the trading cost mainly refers to that which is needed in the aspects of information searching, transaction consultation, contract signing and fulfillment, post-sale service and so on, and the electronic commerce saves the corresponding technical and learning costs of software and hardware through the network and the service application system. At the same time, the electronic commerce has also brought new cost, such as the cost of computation, of maintenance, of risk and security because of the hypothesized characteristic of network as well as of the law because of the carrying on of international trading under the new pattern.

2.4 The Electronic Tool has made the International Trade and the Trading Measures More Convenient and Faster

The arrival of the electronic commerce time unconsciously makes more convenient and more efficient to carry out the international trade. The electronic commerce inputs and transmits all kinds of documentary information needed in the trading process into the network according to certain data format. The information issued on the enterprise’s website or each specialized website has partly replaced the advertising propaganda on the ordinary news media such as television, newspaper, etc. The transmission of electronic data and pronunciation through the Internet reduced the number of traditional information exchange tools such as facsimile, correspondence, and telephone, etc. all of which greatly reduced the trading cost and expense of the international trade. In the aspect of the payment method, the electronic currency took the place of the paper currency. According to the unified and standard financial authentication system, the enterprises and the financial organizations interconnect with each other, directly carrying out the fund payment and settlement by using the network. Moreover, the direct trading of such immaterial products as the computer software, the electronic books and periodicals, the electronic audio and video products and so on is realized through the network, which has become a brand-new international trade and delivery method.

2.5 The Orientation of the International Trade Policies has been under Influence

The global economic structure is further developing towards the service industry and information industry; simultaneously, the development of electronic commerce has proposed a series of policy propositions related to international trade: the problem of defining the basic attribute of EC, the problem of security, the problem of customs, the problem of developing countries, etc. Electronic commerce has affected the trend of each country’s trading policy. The developed countries advocate the liberalization of electronic commerce because of their formidable superiority on the electronic commerce. The developing countries, however, are in the passive place during the process of the electronic commerce liberalization. On the one hand, they want to promote the development of economy in their countries through the electronic commerce liberalization; On the other hand, they are relatively passive because of the insufficiency of technology and fund.

In addition, the fuzziness of the participants and places of electronic commerce as well as the settlement way of electronic currency, which distinguish from the traditional commercial trade, has put the inevitable challenge and impact on the traditional tax pattern. And because of the global character of electronic commerce, its influence on the international tax is especially profound, which mainly covers the following aspects: How to levy tax on the invisible trading carried out through the Internet, such as provision of electronic publication, computer software, and service on the network, as well as on the visible trading which orders through the Internet and fixed by the ordinary methods; how to re-define the concepts such as tax levying places and taxation subjects in the traditional tax law; .and how to solve the problem that different taxation results may come from different defining of trading on the network.

2.6 The Disparity of Benefit among Different Types of Countries has been enlarged

Although the electronic commerce increased the international, the attribution of the trading benefit which was brought by the electronic commerce between the developed and developing countries was rather imbalanced.

Since that the economic potentiality of the developed countries is formidable, as well as that the technology is developed, the popular rate of network equipment is high, the quality of the enterprise personnel is good and the majority of enterprises have accessed the net, the developed countries have occupied absolute superiority in the electronic commerce.  In US, it was the commercial demand of the enterprises that has promoted the formation of network and electronic commerce technology. The electronic commerce practice in superior to the electronic commerce concept, and the application foundation and environment of electronic commerce is quite consummated. However, the general situation in the developing countries is just on the opposite; namely, the electronic commerce concept is superior to the electronic commerce practice, the electronic commerce technology is difficultly seeking for the commercial demand, and the application foundation and environment of electronic commerce is far away from consummated. Therefore, the developing process of electronic commerce in the developing countries falls far behind that in the developed countries.

In the political economics of international trade, electronic commerce would not necessarily create the “backward superiority” for the developing countries; in contrast, it might enlarge the distance between the developing and developed countries. The electronic commerce has raised the threshold for the developed countries to participate in the international trade and has further worsened the trading condition of the developed countries, making it more difficult for the developed countries to obtain the trading wealth.

In a word, the influence of the electronic commerce on international trade is revolutionary, and it has created opportunities for the developing countries and the small and medium-sized enterprises. The application of electronic commerce in the international trade is the irresistible historical trend of 21st century, as well as the objective law of the development of global trade and international economy, so that all of the countries ought to try best to grasp the opportunities and face the challenges.

Chapter 3 Conclusion

The superiority of electronic commerce is that it can effectively breakthrough various kinds of visible and invisible barriers among different countries or areas by surmounting the limit of time and space, playing the revolutionary role in promoting the exchange of foreign economical technology and cooperative information of different countries or areas. The electronic commerce indirectly stimulates foreign trade to adopt the means of electronic commerce, so as to avoid many middle links and reduce large amount of cost. Therefore, the electronic commerce enterprises in various countries will gradually develop towards the whole world along with the standardization and consummation of the international electronic commerce environment. Accordingly, the government and the enterprises should take comprehensive, positive and effective measures to contribute to the development of electronic commerce. Chinese enterprises ought to take the development of electronic commerce as an important measure to improve the competitive power in the international market of enterprises. The electronic commerce has become the laissez-passer of the international market, that is, missing the developmental opportunity of electronic commerce implies the giving up of the future.

As a brand-new operation pattern of international trade, the electronic commerce will definitely bring new vigor and opportunity to the international trade enterprises, and it will undoubtedly be the inevitable choice for the further development of the international trade enterprises in our country. However, in the contemporary electronic commerce upsurge, the international trade enterprises need to calmly know both the superiorities and inferiorities of our country, so as to avoid blind investment in the construction of electronic commerce and the redundant projects.

In conclusion, the influence of electronic commerce on the international trade is revolutionary. It deepened the international division of labor, expanded the international trade, changed the international market structure and created inexhaustible opportunities for the developed countries and enterprises. The application of electronic commerce-international trade system in the international trade domain has also become the irresistible historical trend of the 21st century. Moreover, China wants to be a great developing trading nation. It is necessary to act activity. We need making strategy to face EC, to face the impact, the pressure and chances in order to control our foreign business policies. Justify by us in order to follow EC steps in developing. That is the right way for us to challenge with other developed countries.