The Effect Of Culture On Foreign Trade

When the Cold war ended in 1990, an increasing attention has been paid on to the influence of culture upon foreign trade. Guo (2004) showed that the trade among the China, Korea and ASEAN had grown substantially since 1995 because of the Chinese cultural circular. In other words, the relatively active bilateral trade tends to take place in homogeneously cultural environment. However, cultural includes many things such as language, education, religion, food and hobbies, so there are no two countries have the same culture. The cultural similarities and differences between Ireland, India and China are described above and the following content will show the impact of these cultures on bilateral trade.

Language and international trade

There is no doubt that having a common language is very important for bilateral trade. Melitz (2008) summarised that it was very important to have a common language to communicate directly in promoting international trade. For example, General Motor’s slogan is “Body in Belgium”, which means “Corpse by Fisher” in French. Similarly, a Brazilian airline has a “comfortable rendezvous”, but this is “a legal for illicit sexual counters” in Portuguese. The slogan is very creative, but it has different meanings when translated into different languages, followed by difficult expanding the market. One could image that if an Irish company wants to develop the Chinese market, they must translate all the information of the company into Chinese so that the Chinese market can understand the Irish company, followed by further cooperation. There is no doubt that if the staff of the two companies have a common language, it will greatly enhance the possibility of cooperation between the two companies and work efficiency because of zero cost of translation. However, if both companies only speak their native language, they will spend a lot of money and time on translation service, which increasing the difficulty of mutual understanding and reduce the possibility of cooperation.

At the same time, the cost of translation is a huge expense for the company, which will directly affect whether the company is willing to continue to expand overseas markets. English, which is widely used all over the world, is often used as one of the working languages at international meetings and in most international business. The use of English is markedly different in Ireland, China and India. English became the dominant language in Ireland from 1800. Almost everyone in Ireland who enjoys political, social, economic and cultural powers uses English rather than Irish. Despite this, there are still about 4 million people speaking Irish. China is a country with fifty-six ethnic groups, which has its own language, but ninety percent of Chinese people use mandarin. After the mid-1960s, English was chosen as the first foreign language. Especially after 1983, as one of the compulsory courses in Chinese elementary education, English was treaded in the same way as other subjects in the entrance examination for higher education. Similar to China, India also has many ethnic groups, but they use both Hindi and English as official languages. In India, the proportion of English-speaking population is small, but it constitutes an elite class and dominates society.

They are more accustomed to using English as working language. China has not had the opportunity to establish diplomatic relations with Ireland until China used English as the first foreign language (Russian as the first foreign language). Since Ireland and China established diplomatic relationship in 1979, the trade between these two counties has developed rapidly. Algieri (2002) reported that China had reached a crucial position on the EU’s external relations agenda and was the EU’s third largest non-EU economic partner (the second largest economic partner for Ireland). In 2017, the bilateral trade volume between Ireland and China was US4$11. 06 billion, a year-on-year increase of 36. 9%. As the end of 2017, Ireland invested 1. 83 billion US dollars in China while China directly invested 670 million US dollars in Ireland. Ireland’s exports to China mainly include mechanical and electrical products, chemical products, food and medical equipment while Ireland’s imports from China mainly include furniture, toys, textiles and the light industrial product. The trade between Irish and Indian is more and more frequent because of the common working language.

According to the World Bank, India’s economy is developing very rapidly, and it has become the top ten largest economic in the world. India regards Ireland as the gateway to Europe while India offers significant marketing opportunities for Irish luxury good exporters. Especially after Britain officially leaves the bloc, Ireland become the best choice for the European gateway. In order to follow the government’s Asian strategy, there are about 150 Irish companies working with India. Ireland is home to countless well-known large India companies and more than forty Indian companies have settled down. As we all know, Ireland is the home base of the global biopharmaceutical industry. Wockhardt, a well-known Indian pharmaceutical company, acquired Pinewood Laboratories, a local Irish pharmaceutical company in 2006. It is well known that there are many professional terms in pharmaceutical, so both companies have a common language to communicate is very important.

On the one hand, the translation process wastes a lot of financial resources. On the other hand, the accuracy of translation has a great impact on the company and its products. Compared with Ireland, China have a large population, so the number of people who do not speak English is also large. As a result, if the Irish company wants most Chinese people to know and use their products, some translation work is necessary. As an example, after the Irish wholesale and retail group Musgrave signed a cooperation agreement with Alibaba, it will start exporting its own brand Supervalu products to the Chinese market. Musgrave will initially supply more than 40 private label products, including SuperValu’s breakfast cereals, coffee, jams, biscuits and healthy snacks. In China, almost everyone goes shopping through Alibaba, whether he is a farmer, a teacher, a lawyer or a student. However, not all of customer who use Alibaba shopping have learned English and they have a different level of command of the language. Musgrave must employ a professional translation team so that everyone knows the information of the goods as much as possible.

There is a close correlation between the immigration and language. Gould (1994) and Head and Ries (1998) reported that immigrants have positive influence on the foreign trade, since they can speak their native language and the ability of translation. As a result, if the cost of transaction decreases the foreign trade, immigrants may play a role as trade intermediaries. Ireland’s living environment, social welfare and old-age medical conditions attract a large number of foreign immigrants. According to the Irish Immigration Service, Ireland issued a total of 115. 000 residence permits in 2016. The top five countries registered in Ireland are Brazil (13. 2%), India (12. 2%), China (9. 2%), the United States (7. 9%) and Pakistan (6%). Globerman (1995) showed that there are three mechanisms for immigrants can influence international trade. Firstly, immigrants bring preferences for particular varieties of foreign products, and then the opportunities of imports are significantly increasing. There is no doubt that immigrants would like to buy the home-country products and they also bring their international market information, which has been translated.

In Ireland, especially in Dublin, there are many Chinese and many Chinese restaurants and supermarkets. Similarly, Indian special food appears in supermarkets such as Tesco, SuperValu and Aldi. If you want an India curry, you can easily find an India restaurant in Ireland. Secondly, immigrant links play a key role in the bilateral trade, since they can decrease the translations costs. For export, it is important to understand the potential market and the sales channel in an unfamiliar environment. In the meanwhile, for importer, finding a reliable supplier is important as well. Immigrant can speak their native language and the language of host country, so there is no communication barrier for them. Last but not least, the development of trust through immigrant contacts will reduce the cost of trade contracts and ensure the following enforcement, since the contracts for delivery is an important of the trade between the two countries.

Food and international trade

The food market in the world is changing very fast. People used to like heavily tasted food, but now people prefer healthy and convenient food. The international trade in food is very influenced by economics and infrastructure. In Ireland, food company have advanced and mature production technology and high food safety awareness, so Irish food is relatively healthy and safe. Unlike Ireland, India and China are still developing countries and their production technologies, food safety awareness and infrastructure construction are relatively lacking. In China, there are about ten thousand of people who die from food safety accidents every year. The use of chemical fertilizers in China accounts for 35% of the world’s total, which is equivalent to the sum of the United States and India. The average amount of chemical fertilizer used per acre in China is 21. 9 kilograms, which is much higher than the world average of 8 kilograms per acre and is 2. 5 times that of the European Union. Excessive use of chemical fertilizers allows pollutants to enter the soil environment on which people depend for survival, accumulating in the soil for a long time, forming a chemical time bomb. Because of rapidly growing population and growing demand for imported goods, food imports in China are accelerating.

For example, Larry Goodman, the head of ABP Food Group, which is the largest beef processor in Ireland, confirmed that ABP Food Group has signed a supply agreement worth 50 million Euros to supply beef to the famous Chinese restaurant chain Wowprime. Conor O’Sullivan (the trade Commissioner of the Irish Food Authority in ShanHai) said that as urbanization accelerates, Chinese consumers’ demand for beef grows faster than any other food. In addition, according to the data from the Irish Food Authority (Bord Bia), Ireland produces 10% of infant formula worldwide and has also become China’s second largest supplier of infant formula, only behind the Netherlands. Kerry group and Beingmate collaborated and developed an infant formula called “Green Love+”, which enter the Chinese market in 2012. Even if the price per kilogram of infant formula is four times the Irish price, it is still very popular in China because the infant formula is 100% produced in Ireland and excellent quality. For another example, Guinness is a very famous brand of dark in the world. With the increasing number of Irish people going to China, Guinness has a growing market in China. At the same time, Irish pub culture is also popular in China so that you can easily find bars with Irish flags and clover on the bustling streets of China. Compared with China, although India has a large population as well, India has twice the area of cultivated land and abundant rainfall, so India’s agricultural exports are large. Verma (2011) reported that India mainly exports iron ore (57. 7% of total) and cotton (7. 7% of total) to China while India mainly imports electrical (26. 8%) and nuclear reactors (19. 2%) from China.

In addition, India is one of the countries most affected by religion in the world, and the influence of religion goes deep into every part of its society and culture. Religion plays a central and decisive role in the life of this country and its majority of people. Most Indians do not eat beef because of their religion. In this case, even if the quality of beef from ABP Food Group is good, there will be no good market environment in India. However, on the Irish table, beef is essential, since feeding of natural Irish pasture, perfect meat processing system and no added growth hormone, followed by increasing number of Indian restaurants with increasing of Indian immigrants. The preference of people in different countries for food promotes trade in food between the two side.

Education and international trade

The impact of education on bilateral trade cannot be ignored. Education can influence international trade in many ways. First of all, paying greater attention to English education has added many opportunities for China, which was mentioned in the part of language. Secondly, the increasing in international students will significantly increase bilateral trade.

Around the 1990s, in China the strategy relying on science and education to rejuvenate the nation proposes the new duty to the reform and development of education, such as introducing the nation unified college entrance examination system and allowing to study abroad at one’s own expense, followed by more and more Chinese student chose to study abroad. In the meanwhile, as Chinese education becomes more and more perfect, Chinese universities are attracting more foreign students to study in China as well. From the exchange program between the University College Cork and the Beijing Technology and Business University, we can see that the number of Chinese students who study in UCC had increase: in 2014, only the top three talents in the class can participate in the exchange program while the number of people allowed to participate in the exchange program has increased to 25 in 2018. Finally, since the start of developing education, Chinese industry is getting closer to the technological frontier of traditional fields including aviation, electronics and machinery as well as emerging areas such as A. I. , big data and e-commerce. UC Web browser is a mobile APP developed by Alibaba Corporation of China, entering the India market in 2009. Due to the small installation package, provincial traffic and fast assess, UC browser accounts for 50% of India’s market, followed by Google Chrome.

After the UC browser has a place in the India market, Alibaba spent $500 million to invest in India e-commerce Snapdeal because India has a huge e-commerce market. Between 2015 and 2018, Chinese Internet companies have completed at least 22 transactions in the Indian market, involving more than $5 billion, covering strategic investments, financial investments and cross-border mergers and acquisitions. Take India as an example: India regards higher education as the focus of education development and hopes to enhance its international competitiveness through the development of education. At the same time, India attaches great importance to engineering technology education. Some universities in India are well know in the world. There are millions of engineers, teachers, doctors and laborers from India and there are tens of thousands of people employed in organizations or institutions within the UN system. It is worth mentioning that the software industry in India. India’s continued economic growth in recent years is inextricably linked to the rapid development of software technology in the past decade.

In recent years, India’s software exports have grown at a rate of 60% a year, which account for 33% of India’s total exports. At present, 170 companies in the India software company have obtained the IS9000 quality standard certification, which is the country with the largest number of quality certification software companies in the world. India does not have a software market itself, so they have to export to overseas. This also cause the India software company’s products to be mostly not final products, but intermediate products such as system integration software.

According to the David, international trade between India and Ireland increases in recent years because of growing links with the IT sector in India. Due to the geographical advantage of Ireland, it connects the Silicon Valley of the United States with the Bangalore of India. Infosys Technologies Ltd, the first Nasdaq-listed India company, focuses on providing IT services such as consulting and software to customers around the world. In 2015, Infosys said that it would create 250 new technology jobs in Ireland, which would see the first development centre and product-centric research outside India. Irish Prime Minister Enda Kenny also said that this behaviour proves that Ireland has excellent workforce and is seen as a great development market.