International Trade Accounts

Current, Capital and Financial

Accounts
Revision of classifications
Current account; balance on goods, balance on
services, balance on income (i.e. income from NZ
investment in foreign companies, and income
from foreign investment in NZ companies) and
balance on current transfers (aid).
Capital account; debt forgiveness and migrant
transfers.
Financial account; direct investment, portfolio
investment, other investments, reserve assets.
Accounts revision
After a typhoon lashes a small Pacific country,
the NZ government gives $150million in aid to
rebuild. Which account?
Current account, current transfers.
Don Key, a wealthy investor, spends
$220million to buy up an 80% share of a shock
absorber manufacturer in Australia.
Financial account, net direct investment.
In groups, big prizes!
Sheikh Khalifa bin Zayed Al Nahyan buys a 100%
share in Canterbury Clothing. Which account?
Following the recession and economic problems
in Ireland, 220 families migrate to New Zealand
bringing with them cash and other assets worth
over $175 million.
The owners of Napa Valley Wines are so
impressed by our Pinot Gris, that they buy a 7%
share in Central Otago Vineyard Limited.
Questions
Peter Jacksons film company starts filming in
Fiordland and several thousand Australian and
American tourists follow to take pictures.
Inter-Islander Ferries purchases two more
ferries from an Italian company.
Kathmandu expands its product lines by using
its profits to purchase a 20% share in
Californias Sonoma Outfitters.
Questions
The Rugby World Cup 2011 attracts in 30,000
free-spending fans of the oval ball game, all of
whom spend on hospitality, accommodation,
travel and sight-seeing while in New Zealand.
Ongoing sewage problems in Christchurch means
that 23,000 port-a-loos have to be imported from
China.
Radiation problems in the coasts of Japan mean
that more seafood (mussels, abalone and clams)
is exported from the long white cloud to the
restaurants of the land of the rising sun.
Final and 10
th
question
Out of sympathy for the government and
people of the Democratic Republic of the
Congo, the government of New Zealand
forgives the debt of $350million, including
interest, that the DRC owes.