Global Marketing Concepts

Economic Theories in Global Markets

This article talks about the case where China denies that it banned Japan from exporting importing rare earth. Notably, china has been reported as the major producer of rare earth where it produces about 90% of the global production. These minerals are used in the enhancement of batteries, computers, and weapon systems among other applications. In this case, Japan is the main importer of the Chinese rare in the whole world. The anticipated reason for the ban is because Japan has detained a Chinese fishing boat captain. The officials from China and Japan have been reported denying the ban. The purpose of this assignment is to describe the roles and forces of global markets in the market in relation to the rare earths in China.  On this basis, this study will describe how the international market is impacted by different concepts of economics. Additionally, this study will look at the influences of the government in the marketing procedures in relation to the relationship of China and Japan. The aspects of security and sovereignty that is illustrated by detention of a Chinese fishing boat captain will be addressed in this study. In the explanation of this concept, this study will utilize economic concepts or models like; demand and supply, governments actions in the market, global markets in actions, externalities, and elasticity among others. These concepts used in this study mainly affect both domestic and international trade. In this case, the production of rare earth minerals and their usefulness determine their demands (Hornby, 2010).

Analysis of the report

Forces of demand and supply are the main determinants in the market system. In this case, the demand of an item will determine its price. On the other hand, the supply of an item will affect the price in that the higher the supply the lower the price. In the context of the Chinese rare earths, there is high demand of these minerals from all over the world since they have a wide range of significance. As a result of this, since the supply is low in the whole world with China producing the largest share; the demand increases. In this case, it would have a lot of impact if Japan is banned from importing these minerals. These impacts would affect the both countries since Japan is the largest importer of the rare earths (Areddy et al, 2010).

From the demand curve presented below, the high the demand the higher the price and hence China would get a lot of income from the export of rare earths.  In this case, since there is high demand for the rare earths in the whole world China has issued some export quota in order to reduce importation. This is because China is also a manufacturing country and would like to manufacture some products like computers, batteries and weapons with the rare earths. Additionally, if the increased demand is not controlled it would lead to deprivation of these minerals resources in China. The curve below indicates that the demand of these minerals in the world is increasing hence causing an automatic increase in price. Basically, China would have issued quotas or tariffs on the importation of its minerals in order to increase their demands and hence reap high incomes from Japan (Qureshi, 1996).

On the other hand, the supply of the rare earth in the whole world is very low hence giving China a better ground as it is the largest supplier. It should be noted that, when the supply of an item is low in the market, its demand will be high in the supply-demand curve. On this basis, China would like to reduce its supply of the rare earths with an aim of increasing demand in the market and hence increasing income.  The equilibrium point is where the demand and supply curves intersect. In this point the demand of the rare earths equals the supply (Parkin, 2009).

About the Author

The author is associated with Term Paper Writing  Services. The author will assist you with Best Term Papers.

(Amega Global) Marketing & Lead Generation Concepts