The Theoretical Impact Of Electronic Commerce On International Trade And The Reality Challenges

Ever since the last decade of last century, developments of modern information technology, and its application in the business world, have brought great changes to the form of production and trade. In this industrial revolution, international trade stands in the breach. The "new economy", reflected in economic globalization and revolution in information technology, serves as the outside momentum for international electronic commerce. This paper analyses the theoretical and realistic challenges EC has brought to the traditional international trade, and comes up with some new ideas about the trend and course of its development.In the first part, relevant concepts and background of electronic business are discussed. The second part emphasizes the deviation from traditional economic and international trade theories amid the new condition of international electronic commerce, where the comparative advantage has transferred from labor and capital to information and knowledge. The third part is about the reality, especially the policy making problems arising from the new application of IT in trade, including security, standard, intellectual property and digital gap, etc. In the last part of this paper, the author concludes several trends of the development for electronic application in international trade, such as becoming more objective, open and integrated. At last, some proposals, that is, innovation in both technology and institution, were brought up to further test and discussion.The topic of this paper is somewhat innovative, and it covers a variety of aspects in both theory and policy in international trade. Logic analysis is the main method adopted. Besides, because of the broad coverage, the paper is very conclusive and may miss some very important details. With limited time and capability, this paper certainly has a large room of improvement, so suggestions and criticism are welcome and the author hopes some deeper and more detailed study on this new topic can be carried out later.