国际商务英语简要和课后答案

International Business English

Lesson 1

International Business

Business Knowledge:

The major differences between international business and domestic business A. Differences in legal systems B. Differences in currencies

C. Differences in cultural background

D. Different in natural and economic conditions The major types of international business A. Trade

a. Commodity trade b. Service trade B. Investment

a. Foreign direct investment b. Portfolio investment C. Other types

a. Licensing and franchising

b. Management contract and contract manufacturing c. Turnkey project and BOT Trade Terms:

1. Customs area关税区: 2. Conversion货币兑换

3. Visible trade有形贸易: The form of commodity trade, i.e. exporting and

importing goods produced or manufactured in one country for consumption or resale in another. (including cash transaction-by means of money and market, and counter trade)

4. Invisible trade无形贸易: The form of transportation, communication, banking,

insurance, consulting, information etc. is called invisible trade or service industries.

5. FDI外国直接投资: Foreign direct investments. Returns through controlling the

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enterprises or assets invested in a host country. / P.256. One country acquires assets in a foreign country for the purpose of controlling and managing them.

6. Portfolio investment证券投资: Purchases of foreign financial assets for a

purpose other than controlling.

7. Stocks股票: Capital stocks or bonds.

8. Bonds债券: The papers issued by a government or a firm with promise to pay

back the money lent or invested together with interest. 9. Maturity（票据等）到期

10. Certificate of deposit大额存单

11. Licensing许可经营: In licensing, a firm leases the right to use its intellectual

property to a firm in another country. They choose licensing because they do not have to make cash payments to stat business, and can simply receive income in the form of royalty.

12. Franchising特许经营: Under franchising, franchisee is allowed to operate in the

name of another, franchiser who provides the former with trademarks, brand names, logos and operating techniques for royalty. 13. Trade Mark商标 14. Patent专利

15. Royalty专利（许可）使用费，版税 16. Copyright版权 17. Licenser许可方 18. Licensee被许可方

19. Franchiser特许方: A firm who provides the franchisee with trademarks, brand

names, logos and operating techniques for royalty.

20. Franchisee被特许方: A firm is allowed to operate in the name of another.

21. Management contract管理合同: Under a management contract, one company

offers managerial or other specialized services to another within a particular period for a flat payment or a percentage of the relevant business volume. 22. Value chain价值链 23. Turnkey project“交钥匙”工程: For an international turnkey project, a firm signs

a contract with a foreign purchaser and undertakes all the designing, contracting

and facility equipping before handing it over to the latter upon completion. 24. BOT建设、经营和移交: Build, Operate, Transfer 25. Expertise专门知识

26. Bonus红利、奖金、津贴 27. Royalty 许可使用费

28. International investment国际投资: Supplying capital by residents of one

country to another.

29. Contract manufacturing承包生产

30. GATT关贸总协定: General Agreement on Tariffs and Trade

31. International business国际商务: Transaction between parties from different

countries. Sometimes business across the borders of different customs areas of the same country is also regarded as import and export. 32. Intellectual property知识产权

33. Oil deposit: 石油储备 = oil reserves

34. the reserves of natural resources 自然资源储备

35. Personal advancement个人的晋升，个人素质的提高以及个人事业的进步等。 Answer the following questions:

1. What does international business refer to? Please tell the difference between

international business and domestic business.

A: International business refers to transaction between parties from different countries. Sometimes business across the borders of different customs areas of the same country is also regarded as import and export.

Some major differences between international business and domestic business is following:

(1) Differences in legal systems (2) Differences in currencies

(3) Differences in cultural background

(4) Different in natural and economic conditions

2. Please explain the differences between visible trade and invisible trade.

Which is becoming more and more important and accounts for an increasing proportion in international trade?

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A: Visible trade is the form of commodity trade. The form of transportation, communication, banking, insurance, consulting, information etc. is called invisible trade or service industries. The later is become more and more important.

3. Can you cite some examples to illustrate cultural differences in international

business?

A: Cultural differences including language, customs, traditions, religion, value, behavior etc.

4. Please elaborate on the two categories of international investment. What is

their major difference?

A: FDI (Foreign direct investment) is made for returns through controlling the enterprises or assets invested in in a host country. Portfolio investment refers to purchases of foreign financial assets for a purpose other than controlling. Such financial assets may be stocks, bonds or certificates of deposit.

5. What is licensing? Why do firms sometimes choose it as a means of entering a

foreign market?

A: In licensing, a firm leases the right to use its intellectual property to a firm in another country. They choose licensing because they do not have to make cash payments to stat business, and can simply receive income in the form of royalty. Besides, they can benefit from locational advantages of foreign operation without any obligations in ownership or management. The use of licensing is particularly encouraged by high customs duty and non-tariff barriers on the part of the host country.

6. What is franchising? How is it different from licensing?

A: Under franchising, franchisee is allowed to operate in the name of another, franchiser who provides the former with trademarks, brand names, logos and operating techniques for royalty. In comparison with the relation between the licenser and the licensee, the franchiser has more control over and provides more support for the franchisee.

7. What is a management contract? Under what conditions is it most

applicable?

A: Under a management contract, one company offers managerial or other specialized services to another within a particular period for a flat payment or a percentage of the relevant business volume. When a government forbids foreign ownership in certain industries it considers to be of strategic importance but lacks the expertise for operation, management contracts maybe a practical choice enabling a foreign company to operate in the industry without owning the assets.

8. What is an international turnkey project? In what way is its variant BOT

different from it?

A: For an international turnkey project, a firm signs a contract with a foreign purchaser and undertakes all the designing, contracting and facility equipping before handing it over to the latter upon completion. For a BOT project, a firm operates a facility for a period of time after building it up before finally transferring it to a foreign company. Making profit from operating the project for a period is the major difference between BOT and the common turnkey project

Translate the following sentences into English:

1.国际贸易一般指不同国家的当事人进行的交易，它涉及到许多因素，因而比国内贸易要复杂得多。

International business refers to transaction between parties form different countries. It involves more factors and thus is more complicated the domestic business.

2.随着经济一体化进程的发展，很少人和公司能完全独立于国际商务之外而存在。因此，在此方面具有一定的知识是十分必要的，这既有益于企业的发展又有益于个人的进步。

With the development of economic globalization, few people or companies can completely stay away from international business. Therefore, some knowledge in this respect is necessary both for the benefit of enterprises and personal advancement.

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3.其他参与国际贸易的形式有管理合同、承包生产和“交钥匙”工程。

Other forms for participating in international business are management contract, contract manufacturing and turnkey project.

4.国际贸易最初以商品贸易的形式出现，即在一国生产或制造商品而出口或进口到另一国进行消费或转售。

International business first took the form of commodity trade, i.e. exporting and importing goods produced or manufactured in one country for consumption or resale in another.

5.除了国际贸易和投资，国际许可和特许经营有时也是进入国外市场的一种方式。

Besides trade and investment, international licensing and franchising are sometimes taken as a means of entering a foreign market.

Lesson 2

Income Level and the World Market

Business Knowledge: (1) GNP and GDP

(2) Per capita income and per capita GDP

(3) High-income, middle income and low-income countries

A. Standards for classification B. Representative countries (4) Triad and Quad

A. United States B. Western Europe C. Japan D. Canada

(5) Other important markets for China

Trade Terms:

1. GNP国民生产总值: Gross national Product. The market value of goods and

services produced by the property and labor owned by the residents of an economy.

2. GDP国内生产总值: Gross Domestic Product. The market value of all goods and

services produced within the geographic area of an economy. 3. National income国民收入 4. Per capita income人均收入

5. Per capita GDP人均国内生产总值: It is calculated by dividing its total GDP by

its population, which reveals the average income level of consumers. 6. PPP购买力平价: Purchasing power parity 7. Consumerism消费主义

8. Income distribution收入分布: The proportions of its rich, middle income and

poor people.

9. Infra structure基础设施 10. Staple goods大路货 11. Invoice （开）发票 12. Creditor country债权国

13. OECD经合组织，经济合作与开发组织: Organization for Economic Cooperation and Development.

14. The Commonwealth of Independent States 独联体，独立国家联合体

15. ASEAN 东盟，东南亚国家联盟: Association of Southeast Asian Nationals. 16. NIEs（亚洲四小虎）: Newly Industrialized Economies 17. Factors of production生产要素

Answer the following questions:

1. Explain the concepts of GNP and GDP respectively and point out their major difference. Can we use them interchangeably?

A: GNP (Gross national Product) refers to the market value of goods and services produced by the property and labor owned by the residents of an economy. GDP (Gross Domestic Product) measures the market value of all goods and services produced within the geographic area of an economy. The difference between them is that GNP focuses on ownership of the factors of production while GDP concentrates

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on the place where production takes place. The difference between GNP and GDP can be ignored since it very small in most cases. Therefore, we can use them interchangeably.

2. In what different ways are GDP and per capita income significant in assessing the potential of a particular market?

A: Total GDP indicates the overall size of an economy, which is important in market assessment for durable equipment or bulk goods (grain, steel or cement). Per capita GDP reveals the average income level of consumers, which is important when marketing consumer durables.

3. What are meant by high income, middle income, and low-income countries according to the World Bank? Cite some examples for each group.

A: High-income countries: those enjoying annual per capita income of $9386 and above. In this group comprise three types of countries; most members of OECD, rich oil producing countries of the Middle East, small-industrialized countries or regions. Middle-income countries: those with annual per capita income below $9386 but above $765. Included in this category is most East European countries and most members of the Commonwealth of Independent States, six OECD members, quite a number of Latin American countries and some comparatively developed countries in Asia, South Africa and oil-producing countries in African.

Low-income countries: those that have per capita incomes of only $765 or even less. Most African countries, some Asian countries and a few Latin American countries are included in this group.

4. Why are high-income countries important to trade and investment? Should we neglect low-income countries in international business?

A: High-income countries often have good infrastructure, high purchasing power, and advanced technology, efficient management and favorable environment for trade and investment. They offer prime markets for expensive consumer goods and are both attractive sources and destinations of investment.

In international trade the low-income countries should not be neglected, because they constitute markets for lower-priced staple goods, provide cheap labor and are

often rich in resources. Once tapped, the business potential of these countries will one day become real business opportunities.

5.Was China a low-income country a few years ago? How about now?

A: China with a per capita income of over $1100 is a middle-income country though it was a low-income country just a few years ago.

6.What does the term “Triad” refers to? What is meant by Quad?

A: The term Triad refers to the three richest regions of the world; the United States, the European Union and Japan that offer the most important business opportunities. The scope of Triad to include Canada and name the broadened grouping Quad.

7. How much do you know about OECD? Please make a brief account.

A: OECD means Organization for Economic Cooperation and Development. The organization is included 29 members, 23 of them are high-income countries and 6 are middle-income countries. The headquarters is in Paris.

8. What is the best policy for China to develop business opportunities?

A: So far as China is concerned, other markets we should pay particular attention to are those around us: the Four Tigers, the ASEAN countries, Russia, India and a bit farther away Australia. These countries or regions either have rich consumers and offer good business opportunities or are developing fast with very promising market potential. And their geographical proximity to China is a great advantage for us in developing business relations with them.

Translate the following sentences into English:

1. 民生产总值和国内生产总值是表明一国收入的两个重要概念。区别在于前者强调的是生产要素的所属权而后者着重于进行生产的国家。

GNP and GDP are two important concepts used to indicate a country’s total income. The difference between them is that the former focuses on ownership of the factors of production while the latter concentrates on the country where production takes place.

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2. 要评估某一市场的潜力，人们往往要分析其收入水平，因为它为那里居民的购买力高低提供了线索。

In assessing the potential of a country as a market, people often look at per capita income since it provides clues about the purchasing power of its residents..

3. 世界各国被世界银行分为三大领域：高收入国家，中等收入国家和低收入国家。

Countries of the world are divided by the World Bank into three categories of high-income, middle-income and low-income economies.

4. 中国现在年人均收入为1100美元以上，但几年前它还是个低收入国家。 China with a per capita income of over $1100 is a middle-income country though it was a low-income country just a few years ago.

5. 就中国来说，周围还有其他应特别关注的市场，如亚洲四小虎、东盟国家、俄罗斯等国，这些国家都具有前景看好的市场潜力，能为中国提供很好的商机。 As far as China is concerned, other markets we should pay particular attention to are those around us: the Four Tigers, the ASEAN countries, Russia, etc. These countries with very promising market potential and can offer good business opportunities to China.

Lesson 3

Regional Economic Integration

Business Knowledge:

(1) Major objectives of regional integration * (2) For levels of regional economic integration

A. Free trade area B. Customs union C. Common market D. Economic union (3) European Union (EU)

(4) Asia-Pacific Economic Cooperation (APEC)

(5) Organization of Petroleum Exporting Countries (OPEC)

Trade Terms:

1. Economic integration经济一体化

2. Free trade area自由贸易区: The members remove barriers to trade among

themselves while still adopts each own external policy

3. Customs union关税同盟: The members remove barriers to trade among

themselves and adopt the same external policy 4. Tariff rates关税税率 5. Settlement

6. NAFTA北美自由贸易协定: North American Free Trade Agreement

7. Common market共同市场: The members remove barriers not only to trade but

also to factors of production and adopt the same external policy. 8. Banknotes circulation货币流通 9. Cartel卡塔尔

10. APEC亚太经合组织，亚洲太平洋经济合作组织: Asia Pacific Economic

Cooperation

11. OPEC石油输出国组织: Organization of Petroleum Exporting Countries 12. European Commission欧盟委员会 13. Council of ministers部长理事会

14. Dual-Ministerial Meeting双部长会议 15. Quota Restrictions配额限制

16. Economic Union (EU)经济同盟: The members remove barriers not only to trade

but also to factors of production, adopt the same external policy and harmonize their taxation, government expenditure, industry policies and use the same currency.

17. EU欧盟，欧洲联盟: European Union

18. EC欧共体，欧洲共同体: European Community

19. Benelux荷比卢（比利时、荷兰和卢森堡三国）:Belgium, Netherlands,

Luxemburg

20. Mercousur南方共同市场: Southern Cone Customs Union

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21. ECSC欧洲煤钢共同体: European Coal and Steel Community 22. EEC欧洲经济共同体: European Economic Community

23. EURATOM欧洲原子能共同体，欧洲原子能联营: European Atomic Energy

Community

24. SOM高官会议: Senior Officials Meeting

25. TILF贸易投资便利化自由化: Trade and investment liberation and facilitation 26. ECOTECH经济技术合作: Economic and technical cooperation 27. Political entity政治实体 28. Sovereign state主权国家 29. Multi-polarization多极化 30. Sub-committee分委员会

31. NTA新跨大西洋议程: New Transatlantic Agenda

32. TABD跨大西洋商业对话: Transatlantic Business Dialogue 33. TACD跨大西洋消费者对话: Transatlantic Consumer Dialogue 34. Territory economies区域经济体 35. Pacific Rim环太平洋圈

36. Informal Meeting of Economic Leaders领导人非正式会议

Answer the following questions:

1. What is a free trade area? Make a brief account of the most notable free

trade area in the world.

A: Free trade area is the loosest form in the regional economic integration. Members in this form removes barriers to the flow of goods and services among themselves while each member still adopts its own policy as regards to trade with outsiders. The most notable one is the North American Free Trade Agreement (NAFTA), the largest free market formed by the United States, Canada and Mexico in 1991 with over 360 million consumers and total GDP of more than 6 trillion US dollars.

2. In what way is a customs union different from a free trade area?

A: The Customs Union goes a step further by adopting the same trade policy for all the members toward countries outside their organization in addition to abolishing

trade barriers among themselves. Imports from other countries are subject to the same tariff.

3. What are the characteristics of a common market? Which organization

remained a common market for some years in the past?

A: The common market is further up the scale of regional economic integration. Besides free movement of goods and services and adoption of common external trade policy, factors of production such as labor, capital and technology are free to move among members so that they can be utilized in a more efficient and productive way. In the past, the European Community remained a common market for some years.

4. How much do you know about an economic union? Can members of an

economic union keep all of their national sovereignty?

A: The economic union is the highest form of economic integration, which is characterized by integration of the domestic policies of its members in respect of economy, finance etc. in addition to absence of trade barriers, practice of common external policy and free production factor mobility. The members of an Economic Union are required not only to harmonize their taxation, government expenditure, industry policies, etc., but also use the same currency.

The member countries of an economic union are required to surrender some of their national sovereignty, which is eroding the tradition of the world political system based on the autonomy and supreme power of sovereign states.

5. Make a brief account of the origin and development of the EU.

A: The first community, the European Coal and Steel Community (ECSC) was established in 1952, which set the stage for more ambitious integration efforts.

The signing of the monumental Treaty of Rome in 1957 marks the establishment of the European Economic Community with the aim of gradually realizing the free movement of goods, services, labor and capital as well as the harmonization of economic policies of the member countries.

Ten years later in 1967, the European Community was formed by merging EEC, ECSC and European Atomic Energy Community (EURATOM).

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1992 it became a true common market as envisaged by the Single European Act. Then on January 1, 1994 the European Union (EU) came into being on the strength of the Maastricht Treaty.

From the beginning of 1999 most of the members began to use the common European currency for accounting and settlement and in 2002, euro banknotes and coins were put into circulation.

6. What is the most powerful institution of the EU? What is the executive body

of the EU? How does it operate?

A: The most powerful institution of the EU is the Council of Ministers.

Its executive body is the European Commission composed of 20 commissioners overseeing 23 departments in charge of different affairs.

Decisions of the council are made by votes allocated to member countries on the basis of their size. Different ministers attend the council meeting depending on the matters discussed. The council even has the power to pass legislation.

7. Explain briefly the five layer organizational structure of Asia-Pacific

Economic Cooperation.

A: a. the Informal Meeting of Economic leaders b. Dual-Ministerial Meeting

c. Ministers Responsible for Trade d. The Senior Officials Meeting (SOM)

e. Subordinate committees under SOM: Committee of Trade and Investment, Economic Committee, Economic and Technical Cooperation Sub-committee of SOM and Budget Management Committee.

8. What are the tenet and objectives of APEC? What do its two wheels mean? A: The tenet and objectives of APEC are inter-dependence, mutual benefits, adhering to an open and multilateral trading system and reduction of regional trade barriers. Its two wheels mean trade and investment liberation and facilitation (TILF) and economic and technical cooperation (ECOTECH).

9. What are the nature and objectives of OPEC?

A: OPEC is a commodity cartel. It tried to limit the overall crude oil supply of the world for the purpose of maintaining higher oil prices.

Translate the following sentences into English:

1. 过去的几十年，地区经济一体化越来越重要。

The past decades witnessed increasingly growing importance of regional economic integration.

2. 最著名的自由贸易区是北美自由贸易区，它是由美国、加拿大和墨西哥于

1991年建立的。

The most notable free trade area is the North American Free Trade Agreement (NAFTA), the largest free market formed by the United States, Canada and Mexico in 1991.

3. 经济联盟成员国不仅要在税收、政府开支、企业策略等方面保持一致，而且

还应使用同一货币。

The members of an Economic Union are required not only to harmonize their taxation, government expenditure, industry polices, etc., but also use the same currency.

4. 欧洲委员会是欧盟的管理机构之一，此机构将提议呈交给部长理事会做决

定，并监督各成员国根据所制定的条约履行自己的义务。

The European Commission is one of the governing organs of the European Union. It is the body that puts proposals to the Council of Minister for decision and sees that the members carry out their duties under the treaty.

5. APEC建立于在澳大利亚首都堪培拉召开的一次部长级会议上。当时有12

位成员国出席，分别为澳大利亚、美国、加拿大、日本、新西兰和东盟六国。 APEC was set up at the Ministerial Meeting held in the Australian capital Canberra attended by 12 members of Australia, the United States, Canada, Japan, Republic of Korea, New Zealand and six ASEAN countries.

Lesson 4

Economic Globalization

Business Knowledge:

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(1) Economic globalization as an objective trend

A. Basic feature *

B. Advantages and negative impacts (2) Multinational corporations

A. Organization- parent and affiliates B. Characteristics

a. Enormous in size

b. Wide geographical spread c. Longevity and rapid growth C. Need, goals and roles

a. Profit b. Security

c. As vehicles for cross-border transfer resources D. Four types

a. Multi-domestic corporation b. Global corporation

c. Transnational corporation d. World company

Trade Terms:

1. Share holders股东

2. Economic globalization经济全球化 3. Board of directors董事会 4. Inputs投入

5. Economic environment经济环境

6. Parent MNC headquarter跨国公司母公司，总部 7. Affiliate MNC子公司，分支机构，附属机构 8. Branch company分公司 9. Subsidiary company子公司 10. Day-to-day running日常管理

11. MNC跨国公司=TNC: Multinational corporation, are made up of vast numbers

of foreign subsidiaries, companies in which over 50 percent is owned by the parent company.

12. Home county母国: The country where the headquarter of the investor is located. 13. Host country东道国: The host country is a foreign country where the investor

operates.

14. MNE跨国企业: Multinational enterprise: A typical multinational enterprise shall

be defined as a business organization which owns (whether wholly or partly), controls and manages assets, often including productive resources, in more than one country, through its member companies incorporated separately in each of these countries. Each member company is known as a multinational corporation. 15. Economies of scale规模经济

16. Increase and growth数量的增多和规模的增大

17. Revenue adjusted for inflation（除去通货膨胀后的）实际收入

Answer the following questions:

1. What are the basic feature and major role of economic globalization?

A: The basic feature of economic globalization is to free flow of commodity, capital, technology, service, and information in the global context for optimized allocation.

2. Mention some of the pros and cons of economic globalization. What is the

right attitude towards it? (有利和不利方面)

A: The pros is that with the basic feature of free flow of commodity, capital, technology, service, and information in the global context for optimized allocation, economic globalization is giving new impetus and providing opportunities to world economic development and meanwhile making the various economies more and more interdependent. While the cons of economic globalization is different countries and peoples do not enjoy balanced benefits.

The right attitude towards it is follow the trend closely, availing the opportunities it offers to develop ourselves and avoiding its possible impacts.

3. What is the formal definition of a multinational enterprise? How can you tell

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whether a multinational corporation is a parent or just an affiliate?

A: A multinational enterprise shall be defined as a business organization that owns (whether wholly or partly), controls and manages assets in more than one country. If the MNC is the original investing corporation, it is known as the parent MNC, which is normally also the international headquarters of the MNE. If the MNC is established as a result of investments by the MNE, whether through the parent or through another of its already established MNC, it is an affiliate MNC. 4. Describe briefly the characteristics of MNEs. A: The characteristics of MNEs is as follow:

a. MNEs are generally enormous in size b. Wide geographical spread c. Longevity and rapid growth

5. What is the commonly recognized objective of MNEs?

A: MNEs are formed for profit, and the second basic need is security.

6. Why is security so important to MNEs?

A: Without security, an MNE’s survival can never be assured. The need of security includes the security of profits in the short-and-long-run, the security of the MNE’s assets and investment, and the security of other organizational needs. Profit is useless if it cannot be secured by the MNE and transferred wherever it so desires.

7. Do you think “wide geographical spread” of MNEs plays a very important

role in the development of their business? Why?

A: Yes, I do. MNEs enables them to have a wide range of options in terms of decisions in areas such as sourcing and pricing. They are also more able to take advantage of changes in the international economic environment. Such multi-nationality also enables MNEs to engage in worldwide integrated production and marketing.

8. What is the relationship between MNEs and their host countries?

A: MNCs are under the legal jurisdiction of their host governments that can impose various rules, regulations, and laws on the MNCs to the extent of nationalizing all their assets.

9. What are the four types of multinational enterprises? Describe each of them

briefly.

A: The four types of multinational enterprises is that:

a. Multi-domestic corporation: it is a group of relatively independent

subsidiaries. The parent company delegates sufficient power to each subsidiary to manage the production and marketing in the host country for the needs of local customers.

b. Global corporation: it operates and views the world market as an integrated

whole. Power and responsibility are concentrated at the headquarters that manages production and marketing to achieve the economies of scale as much as possible.

c. Transnational Corporation: The activities and resources of the transnational

corporation are highly neither centralized as the second type nor decentralized as the first type but are integrated in an interdependent network of affiliates. d. World Company: their national identities are blurred to a large extent.

10. Are there may world companies at present? Imagine their future role in

complete globalization.

A: Now it is very few. When such companies become dominating, the possibility of conflicts among sovereign states may be greatly reduced. Possibly they will be instrumental to the realization of complete globalization.

Translate the following sentences into English:

1. 经济全球化为世界经济发展提供了新的动力和机会，同时也使各经济体更加相互依赖、相互影响。

Economic globalization is giving new impetus and providing opportunities to world economic development and meanwhile making the various economies more and more

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interdependent.

2. 跨国公司是在一个以上国家拥有、控制和经营资产的商业组织。

A multinational enterprise is a business organization that owns (whether wholly or partly), controls and manages assets in more than one country.

3. 许多人欢呼经济全球化带来的好处，但同时也有强烈的反对声音。

While many people are acclaiming the benefits brought about by economic globalization, there are also loud vices of opposition.

4. 除了总部以外，跨国企业组织也可能有不同的地区总部和业务总部。

An MNE may also have various regional or operational headquarters, in addition to international headquarters.

5. 跨国公司的内部交换占整个国际贸易的一个很大的比例。

The transfer of the Intra-MNE transactions constitutes a very significant proportion of total international trade.

6. 尽管公司的日常管理工作下放到跨过企业的子公司，但重要决策，如有关公司目标和新投资等都由母公司来决定。

Although the day-do-day running of corporate operation maybe decentralized to the affiliate MNCs, the major decisions, such as those on corporate goals and new investments are made by the parent company.

7. 无论人们是否喜欢，经济全球化已成为世界经济发展中的一个客观趋势。 Like it or not, economic globalization has become an objective trend in world economic development.

Lesson 5

International Trade I

Business Knowledge:

(1) The definition of international trade (2) Two reasons for international trade

A. The uneven distribution of natural resources among countries B. International specialization

(3) Two theories for international specialization

A. The theory of absolute advantage B. The theory of comparative advantage

a. Contents of the theory b. Not a static concept

c. The cornerstone of modern thinking on international trade d. David Ricardo, the economist who introduced the theory

Trade Terms: 1. Services服务

2. Primary commodities初级产品

3. Specialization专业化: To restrict one’s economic activities to certain particular

fields.

4. Absolute advantage绝对利益: It holds that a commodity will be produced in the

country where it costs least in terms of resources (capital, land and labor)

5. Comparative advantage比较利益: It holds that even if a country is less efficient

than another in the production of both commodities, i.e. it has absolute disadvantage in production both commodities, there is still a basis for mutually beneficial trade. 6. Capital资本

7. Land and labor土地和劳动力

8. International trade国际贸易: The exchange of goods and services produced in

one country with those produced in another sufficient. 9. Farm produce农产品

10. Scarce resources 稀缺资源

Answer the following questions:

1. How would you define international trade?

A: International trade can be defined as the exchange of goods and services produced

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in one country with those produced in another sufficient.

2. Why did international trade first begin?

A: The distribution of natural resources is uneven. Some countries are abundant in resources, while elsewhere reserves are scarce or even nonexistent. And a country may be rich in some resources but poor in others. That’s why international trade first began.

3. What is the new incentive for trade that arose with the development of

manufacturing and technology?

A: With the development of manufacturing and technology, there arose another incentive for trade, i.e. international specialization. One country producing more of a commodity than it uses itself and selling the remainder to other countries.

4. According to the theory of absolute advantage, trade occurs only when a

country has an absolute advantage or comparative advantage?

A: According to the theory of absolute advantage, trade occurs only when each country has an absolute advantage over the others in the production of one commodity.

5. Who introduced the theory of comparative advantage? Which theory makes

more sense, absolute advantage or comparative advantage?

A: David Ricardo, English economist, introduced the theory of comparative advantage. It seems that the idea of comparative advantage makes more sense.

6. Explain briefly why trade to exploit comparative advantage promotes

efficiency among countries.

A: The comparative advantage holds that even if a country is less efficient than another in the production of both commodities, there is still a basis for mutually beneficial trade. The first should specialize in the production ad export of the commodity in which its absolute disadvantage is smaller and import the commodity that its absolute disadvantage is greater.

7. Is comparative advantage something static? Is it purely decided by the

endowments of nature? Give examples to show the development of comparative advantage by certain countries?

A: Comparative advantage is not a static concept. A country may develop a particular comparative advantage purely through its own actions, independent of the endowments of nature. Such as the watch making in Switzerland. Translate the following sentences into English:

1. 在复杂的经济世界中，没有一个国家可以完全自给自足。

In the complex economic world, no country can be completely self-sufficient.

2. 随着制造业和技术的发展，出现了另一个刺激贸易的因素，即国际专业化。 With the development of manufacturing and technology, there arose another incentive for trade, i.e. international specialization.

3. 按照比较利益学说，两个贸易伙伴均可从贸易中得到好处。

According to the theory of Comparative advantage, both trade partners can benefit from trade.

4. 比较利益并不是一个静止的概念，一个国家可以通过自己的行动发展某种特

定的比较利益。

Comparative advantage is not a static concept. A country may develop a particular comparative advantage purely through its own actions 5. 比较利益理论已成为现代国际贸易思想的基石。

The idea of comparative advantage has become the cornerstone of modern thinking on international trade.

Lesson 6

International Trade II

Business Knowledge:

(1) Other bases for trade among countries

A. Patterns of demand: different consumption preference

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B. Economy of scale: the cost advantages of large-scale production C. Innovation or style

(2) The reasons why complete specialization may never occur (3) Tariff barriers-the most common form of trade restriction

A. Export duty B. Import duty

a. Specific duty b. Ad valorem duty c. Compound duty

(4) Quotas-the most common form of non-tariff barriers Trade Terms:

1. Tariff关税: A tax levied on a commodity when it crosses the boundary of a

custom area.

2. Quota配额: A quota limits the imports or exports of a commodity during a given

period of time. It is the most common form of non-tariff barriers. 3. Import duties进口关税: Tariffs levied on goods entering an area 4. Export duties出口关税: Taxes levied on goods leaving an area 5. Ad valorem duty从价税: 6. Specific duty从量税

7. Compound duties复税、混合关税

8. Drawback退税: Duties paid on imported goods that are refunded if the goods are

reexported.

9. Most-favored-nation (MFN) treatment最惠国待遇: A tariff treatment under

which a country is required to extend to all signatories any tariff concessions granted to any participating country 10. Tariff schedule税率表、税则 11. Non-tariff barrier非关税壁垒

12. GSP普惠制: Generalized system of preferences. 13. Reasonable costs合理的成本 14. Customs area关税区 15. Customs union关税同盟

16. Tariff barriers 关税壁垒: The traditional protectionism measure Answer the following questions:

1. Are there other bases for trade when there are no differences among

countries in production conditions? Mention some of the bases.

A: Yes, there are. First, patterns of demand may differ among nations. Second, trade may occur out of economies of scale, i.e. the cost advantages of large-scale production. Third, trade takes place because of innovation or style.

2. What is economy of scale? What is the relation between economies of scale is

trade?

A: Economies of scale is the cost advantages of large-scale production. The cost for the production of commodities will decrease if the goods are produced on a larger scale.

3. What does the theory of international specialization seek to answer?

A: The theory of international specialization seeks to answer the question which countries will produce what goods, with what trade patterns among them.

4. Will complete specialization occur in reality? Why?

A: No, it may never occur. For strategic or domestic reasons, a country may continue to produce goods for which it does not have an advantage. The benefits of specialization may also be affected by transport cost. Protectionist measures that are often taken by governments are also barriers to trade.

5. What are tariff barriers? What is a customs area and what is a customs

union?

A: A Tariff barrier is a tax levied on a commodity when it crosses the boundary of customs areas.

A customs area is usually coincides with the area of a country. And a customs area extending beyond national boundaries to include two or more independent nations is called a customs union.

6. What is most favored nation treatment? Is it a very special treatment? Why?

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A: MFN treatment refers to a tariff treatment under which a country is required to extend to all signatories any tariff concessions granted to any participating country. It gives a country the lowest tariffs only within the tariff’s schedule, but it still possible to have lower tariffs.

7. What is the most common form of non-tariff barriers? Explain it in a few

words.

A: Quotas or quantitative restrictions are the most common form of non-tariff barriers. A quota limits the imports or exports of a commodity during a given period of time. The limits may be in quantity or value terms, and quotas maybe on a country basis or global, without reference to countries.

8. What are the differences between visible trade and invisible trade? Give a

few examples of invisible trade.

A: Visible trade involves the import and export of goods and invisible trade involves the exchange of services between countries. Invisible trade is including transportation service, Insurance, tourism and the immigrant remittance from import and export labor service.

9. Explain briefly the different kinds of tariffs.

A: Import duties are tariffs levied on goods entering an area while export duties are taxes levied on goods leaving an area

Translate the following sentences into English: 1. 一件商品的成本会因生产规模的扩大而减少。

The cost of a product will decrease with the expansion of production scale.

2. 在实际中，即使完全的专业化在经济上有利，也可能永远不会发生。

In reality, complete specialization may never occur even though it is economically advantageous.

3. 配额或者说数量限制是最常见的关税壁垒。

Quotas or quantitative restrictions are the most common form of non-tariff barriers.

4. 有形贸易指货物的进出口贸易，而无形贸易涉及的是国家间的劳务交换。 The visible trade is the import and export of goods, and the invisible trade is the exchange of services between countries. 5. 国家从事的贸易种类是多样的、复杂的，往往是有形贸易和无形贸易的混合。 The kinds of trade nations engage in are varied and complex, often a mixture of visible and invisible trade.

Lesson 7 Incoterms 2000

Business Knowledge:

(1) The necessity and purpose of having Incoterms (2) The reasons for the 2000 revision of Incoterms

A. Spread of customs-free zones无关税区的发展

B. Changes in transportation practices运输方式的变化

C. Increased use of electronic communication电子通讯使用的增加 (3) The four groups of Incoterms

A. Group E: EXW

B. Group F: FCA, FAS, FOB C. Group C: CFR, CIF, CPT, CIP

D. Group D: DAF, DES, DEQ, DDU, DDP (4) The three most commonly used terms

A. FOB (free on board) B. CFR (cost and freight)

C. CIF (cost, insurance, freight)

Trade Terms: 1. Deal交易

2. Trade terms贸易术语、交易条件 3. Trade practices贸易惯例

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4. Negotiable（票据、证券等）可转让的、可流通的 5. EDI电子数据交换: Electronic Date Interchange 6. Customs clearance清关、结关 7. Dispatch发运、发送

8. ICC国际商会: International Chamber of Commerce 9. Roll on-roll off滚装滚卸的

10. Incoterms国际贸易术语解释通则: It is a set of international rules for the

interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree.

11. Negotiable transport documents可转让的装运单据=Transferable transport

documents

12. EXW工厂交货: Ex Work 13. FCA货交承运人: Free Carrier

14. FAS装运港船边交货: Free Alongside Ship 15. FOB装运港船上交货: Free On Board 16. CFR成本加运费: Cost and Freight

17. CIF成本、保险费加运费: Cost, Insurance and Freight 18. CPT运费付至: Carriage Paid To

19. CIP运费、保险费付至: Carriage and Insurance Paid To 20. DAF边境交货: Delivered At Frontier 21. DES目的港船上交货: Delivered Ex Ship 22. DEQ目的港码头交货: Delivered Ex Quay 23. DDU未完税交货: Delivered Duty Unpaid 24. DDP完税后交货: Delivered Duty Paid

25. UCP (the Uniform customs and Practice for documentary credit)跟单信用证统一

惯例

Answer the following questions:

1. What sort of risks can arise when goods are being moved from one place to

another? If risks do occur, what consequences would they bring about?

A: Sending goods from one country to another, they have to face the risk, such as lost

or damaged or delivery does not take place for some other reason. If risks do occur, the climate of confidence between parties may degenerate to the point where a law suit is brought.

2. Why is it necessary to have Incoterms? And what is the purpose of making

amendments and additions to Incoterms?

A: If, when drawing up their contract, buyer and seller have some commonly understood rules to specifically refer to, they can be sure of defining their respective responsibilities simply and safely. In so doing they eliminate any possibility of misunderstanding and subsequent dispute.

The purpose of Incoterms is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree.

3. What is the main characteristic of Incoterms 1990?

A: The main reason for the 1990 revision of Incoterms was the desire to adapt terms to the increasing use of electronic data interchange.

4. What are the four different categories of terms in Incoterms 2000?

A: In Incoterms 2000, the terms have been grouped in four basically different categories: Group E (departure), Group F (Main carriage unpaid), Group C (Main carriage paid) and Group D (Arrival).

5. Why should the compilers of Incoterms 2000 take the trouble to set forth in

detail the division of duties, taxes, costs and charges etc. of both sellers and buyers, as some of them are irrelevant to either the seller or the buyer?

A: As with respect to the division between the parties of duties, taxes and other official charges, as well as the costs of carrying out customs formalities, the terms explain for the sake of clarity how such costs are divided between the parties although, of course, the seller might not have any interest at all in the buyer’s further disposal of

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the goods after they have been delivered to him.

6. In what areas are substantive changes made with Incoterms 2000?

A: The substantive changes have been made in some areas: one is the customs clearance and payment of duty obligations under FAS and DEQ. Two is the loading and unloading obligations under FCA.

Translate the following sentences into English:

1. 包装需按运输的要求进行，在大多数情况下，卖方明确知道把货物安全地运

道目的地所需要的包装。

Packing should be made according to the requirement of transportation. In most cases, the seller knows clearly the particular type of packing required for transporting the goods safely to destination.

2. 在许多情况下，应通知买方在卖方将货物启运之时或之前安排验货。除非合

同另有规定，否则买方必须支付为其自身利益而安排的验货费用。

In many cases, the buyer shall be notified to go through the inspection of goods at or before the time of shipment. Unless otherwise specified, the buyers supposed to undertake the charges of inspection thus incurred for his own sake.

3. 进口商可以通过可转让的运输单据将货物在运输途中卖给新的买方，这类可

转让单据用起来非常方便。

The importer can sell the goods to a new buyer while they are being carried by means of negotiable shipping documents that are very convenient for use. 4. 在所有条款中，买卖双方各自的义务排列在10项标题下。

Under all terms, the respective obligations of the parties have been grouped under 10 headings.

5. 2000年对国际贸易术语解释通则的修改考虑了无关税区的发展，商务活动中

电子通讯使用的增加，以及运输方式的变化。

The 2000 revision of Incoterms took account of the spread of customs-freezones, the increased use of electronic communication, and the changes in transport practices.

Lesson 8

Business Contract

Business Knowledge:

(1) The definition of the contract

(2) Two types of business negotiation: oral and written (3) Process of negotiation and conclusion of the contract

A. Inquiry B. Quotation

C. Offer and acceptance D. Counter-off

(4) The necessity of the written contract (5) The types of contracts

A. Sales contract B. Purchase contract

C. Sales (or purchase) confirmation (6) The settling of a contract

A. The title

B. The contract proper

a. The name and address of the buyer and the seller b. The details of the commodity transaction c. The terms and conditions mutually agreed

d. Indication of the number of original copies, language(s) used, and the

validity

C. The signatures of the contracting parties D. The stipulations on the back of the contract Trade Terms:

1. Inquiry / enquiry询盘、询价: It is made by the buyers to get information about the

goods to be ordered such as quantity, specifications, prices, time of shipment and other terms.

2. Quotation报盘: Estimate of how much something will cost 3. Validity period有效期

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4. Offer发盘、出价

5. Counter offer还盘: New offer made by the original offeree to the original offerer 6. Offeree收盘人

7. Sales (purchase) contract销售（采购）合同

8. Sales (purchase) confirmation销售（采购）确认书 9. Consignment寄售

10. Contraction parties缔约方 11. Arbitration仲裁

12. Business line业务范围、经营范围 13. Contract proper合同本身、合同正文 14. Article number货号

15. A first enquiry首次询价: An enquiry sent to an exporter whom the importer has

never dealt with

16. A contract一个合同: An agreement which sets forth binding obligations of the

relevant parties

17. A firm offer 一个实盘: Statement that you are willing to pay a certain amount of

money to by something. 18. Trade fairs 商品交易会

19. Executed contract已履行的合同 20. Executory contract待履行的合同 21. Dispute settlement合同争议的解决 22. Law suit诉讼= Legal action, Litigation

Answer the following questions:

1. What is a contract? What may happen if contraction party fails to fulfill his

obligations?

A: A contract is an agreement which sets forth binding obligations of the relevant parties.

If the party that fails to fulfill his contractual obligations may be sued and forced to make compensation.

2. Mention the two types of business negotiations, and give examples of each. A: Oral and written business negotiations. Oral business negotiations refer to face-to-face discussions or those conducted through international trunk calls. Written negotiations often begin with enquiries.

3. Is an inquiry binding on the inquirer? What are a first inquiry, and what

information should be given in it?

A: No, it isn’t. A first enquiry is an enquiry sent to an exporter whom the importer has never dealt with. The information should be given in the enquiry as to how the name and address of the exporter have been obtained, the business line and usual practice of the importer, etc.

4. What is a firm offer? What contents should be included in a firm offer?

A: A firm offer is a promise to sell goods at a stated price. In making a firm offer, mention should be made of the time of shipment and the model of payment desired in addition to an exact description of the goods including the quantity, quality, specifications, packing, validity period, etc.

5. Is a counter offer an acceptance or a refusal of the original offer? What

happens to the offer once a counter offer is made?

A: A counter-offer is a refusal of the offer that will be invalid and unbinding once a counter-offer is made.

6. Is a written contract a must internationally for the conclusion of a

transaction? What is the case in China? What are the functions of a written contract?

A: A written contract is generally prepared and signed as the proof of the agreement and as the basis for its execution.

7. What is the difference between a sales contract and a purchase contract, and

between a contract and a confirmation?

A: A Contract is made by the seller, is called a sales contract, and when made by the buyer, a purchase contract. A sales or purchase confirmation is less detailed than a contract, covering only the essential terms of the transaction.

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8. Give the major items of the contract proper.

A. The title

B. The contract proper

a. The name and address of the buyer and the seller b. The details of the commodity transaction c. The terms and conditions mutually agreed

d. Indication of the number of original copies, language(s) used, and the validity

C. The signatures of the contracting parties D. The stipulations on the back of the contract

9. Are the stipulations on the back of the contract its constituent parts? Are

they binding on the contracting parties?

A: The stipulations on the back of the contract are constituent parts of the contract and are equally binding upon the contracting parties.

Translate the following sentences into English: 1. 合同依法实施，未能履行合同义务的一方可能受到起诉，并被强制做出赔偿。 A contract is enforceable by law, and the party that fails to fulfill his contractual obligations may be sued and forced to make compensation.

2. 口头业务协商指的是面对面的直接谈判或通过国际长途电话进行的商谈。 Oral business negotiations refer to face-to-face discussions or those conducted through international trunk calls.

3. 买方发出的询盘是为了获得拟定购商品的有关信息，他对发出询盘的人无约

束力。

Enquires made by the buyer are to get information about the goods to be ordered, and are not binding on the inquirer.

4. 有效期对于确盘是必不可少的。在规定的时间之前，或在被对方接受或拒绝

之前确盘一直是有效的。

The validity period is indispensable to a firm offer, that remains valid until a stipulated time or until it is accepted or rejected.

5. 还盘是对发盘的拒绝，一旦作出还盘，原报盘即失效而失去约束力。

A counter-offer is a refusal of the offer that will be invalid and unbinding once a counter-offer is made.

Lesson 9 Modes of Trade

Business Knowledge:

(1) Origin and development of counter trade (2) Current counter trade

A. Barter

B. Counter purchase C. Buyback

D. Features common to the three forms of counter trade (3) Major advantages of counter trade

A. Helping to deal with foreign exchange shortage B. Promoting export

C. Reducing uncertainty regarding export receipts D. Bypassing international price agreement

E. Helping countries with debt problems to import goods. (4) The drawbacks of counter trade Trade Terms:

1. Counter trade对销贸易、反向贸易 2. Hyperinflation极度通货膨胀 3. Reichsbank德国国家银行

4. Cross-border contract进出口合同 5. Protectionism贸易保护注意

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6. Financial market金融市场

7. Clearing system清算系统、清算制度 8. Net positions实际头寸

9. Compensation trade补偿贸易

10. Trade credit accounts贸易信贷往来账户

11. Barter易货贸易: The direct exchange of goods and services, which is completed

in a short period of time.

12. Counter purchase反向购买、互购贸易: The assumption by an exporter of a

transferable obligation through separate but linked contract to accept as full or partial payment goods and services from the importer or importing country.

13. Buyback回购贸易: An agreement by an exporter of plant and equipment to take

back in the future part of the output produced by these goods as full or partial payment.

14. Vertical竖式地、涉及生产销售全过程的

15. Centrally planned economies中央计划经济国家 16. competitive devaluation竞争性贬值 17. Volkswagen大众汽车公司 18. Xerox Corporation施乐公司 19. Processing trade加工贸易 20. Consignment寄售

21. Leasing trade租赁贸易 22. Auction拍卖 23. Agency代理

24. Money market货币市场 25. Discount market贴现市场 26. Capital market资本市场

27. Securities market有价证券市场 28. Stock Exchange证券交易所

29. Foreign exchange market外汇市场 30. Gold market黄金市场

31. EPU欧洲支付联盟: European Payment Union

32. Trade credit accounts贸易信贷往来账户 33. Foreign exchange shortages外汇短缺 34. Policy objective政策目标 Answer the following questions:

1. What is counter trade? Why has it attracted so much attention?

A: Counter trade has become the generic term to describe a set of cross-border contracts that link a seller’s exports to imports from the buyer.

Counter trade has attracted so much attention as it is often associated with policy objectives of relevant economies like dealing with foreign exchange shortages and promotion of exports.

2. How did counter trade originate? And what was the nature of early counter

trade?

A: Following German hyperinflation, competitive devaluations and protectionism meant a global collapse in trade and in international financial and banking markets, then the counter trade originate.

The nature of early counter trade is counter trade partners are necessarily familiar partners and goods exchanged are sometimes vertically related

3. Why should Britain use bilateral clearing arrangements after World War II? A: During and after World War II, when financial markets were in disarray, Britain used bilateral arrangements

4. What are the main features of the current counter trade? Can you

summarize the categories briefly under current counter trade?

A: Current counter trade partners are not necessarily familiar partners and goods exchanged are sometimes vertically related. Current counter trade can be categorized as follows: Barter, Counter purchase, Buyback.

5. What are the major differences between counter purchase and buyback?

A: The important difference between counter purchase and buyback is that in buyback the goods and services taken back are tied to the original goods exported whereas that is not the case in counter purchase. Another important difference is that a buyback

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deal usually stretches over a longer period of time (as long as 15 to 20 years) than a counter purchase deal.

6. What is meant by bundling? What is the opposite way of doing business? A: Bundling means the exchanges of goods and services are bundled together. In normal market transactions buying and selling of goods and services is unbundled, and arrangement made possible by the use of money and the “market” as an institution. Thus, an individual can sell goods and services to obtain monetary income and con then use the income for other desired goods and services. Such unbundling greatly facilitates transactions and allows more efficient economic exchanges.

7. Since bundling is not an efficient way of getting business done, what should a

significant part of the international trade of goods as well as services still be bundled?

A: major advantages of counter trade:

a. Helping to deal with foreign exchange shortage b. Promoting export

c. Reducing uncertainty regarding export receipts d. Bypassing international price agreement

e. Helping countries with debt problems to import goods

8. What are the advantages and disadvantages of counter trade?

A: The advantage of counter trade is in Question 7. The disadvantage of counter trade is that it can be very risky business. By concealing the real prices and costs of transactions it may conceal and help perpetuate economic inefficiencies in the market place. Companies may suffer losses because they could not get rid of products of poor quality. Finally, counter trade may be considered as a form of protectionism.

9. What are the basic conditions for counter trade to exist?

A: The basic conditions for counter trade to exist are that the countries lack mature and competitive markets. In such an environment counter trade can be viewed as a

national form of contracting to deal with transaction difficulties.

10. What are the other modes of trade mentioned in the text?

A: The other modes of trade are processing trade, consignment, leasing trade, agency etc.

Translate the following sentences into English:

1. 对销贸易一般是与有关国家的政策目标相互联系的，如应对外汇短缺和扩大

出口之类的问题。

Counter Trade is often associated with policy objectives of relevant economies like dealing with foreign exchange shortages and promotion of exports.

2. 实质上，反向贸易指的是各种货物和服务的直接交换。

In essence, counter trade refers to the direct exchange of assorted kinds of goods and services.

3. 回购贸易和互购贸易之间另一个重要的区别在于回购贸易一般比互购贸易

要延续更长一段时间。

Another important difference between counter purchase and buyback is that a buyback deal usually stretches over a longer period of time than a counter purchase deal.

4. 在正常的市场交易中，由于使用货币及市场手段，货物的买与卖是分别进行

的。

In normal market transactions buying and selling of goods and services is unbundled, because of the use of money and the market.

5. 尽管有很多好处，反向贸易可能是风险很大的事。

Despite all its advantages, counter trade can be very risky business.

6. 在其他贸易方式中还有加工贸易、寄售、租赁贸易、代理等。

Among other modes of trade are processing trade, consignment, leasing trade, agency etc.

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Lesson 10

International Payment

Business Knowledge:

(1) The complexity of payment in international trade

A. Risks faced by the exporter and importer

B. Political factors政治因素, commercial factors, geographical factors, etc (2) Two methods of payment used under certain conditions

A. Cash in advance or partial cash in advance B. Open account

(3) The draft (bill of exchange)

A. Definition

B. Sight draft and Usance draft (tenor draft or term draft) C. Clean draft and documentary draft (4) Documentary collection

A. Documents against payment (D/P)

a. D/P at sight b. D/P after sight

B. Documents against acceptance (D/A) Terms:

1. Debtor债务人 2. Debit借方

3. Financial standing财务状况= financial status = financial strength 4. Credit worthiness资信可靠状况 5. Periodic payments分阶段付款 6. Cash in advance预付现金

7. Draft汇票:= Bill of exchange. It is an unconditional order to a bank or a

customer to pay a sum of money to someone on demand or at a fixed time in the future.

8. Drawer出票人: The person who draws the draft (usually the exporter) 9. Drawee受票人: The person to whom the draft is drawn. 10. Payee收款人、领款人: The person receiving the payment.

11. Sight draft即期汇票: The draft calls for immediate payment on presentation to

the drawee.

12. Usance draft远期汇票=Term draft = Tenor draft: The draft is payable at a later

date on presentation to the drawee.

13. Clean draft光票: The draft without documents

14. Documentary draft跟单汇票: The draft is accompanied by the relevant

documents.

15. Documentary collection跟单托收: It is means of ensuring that the goods are

only handed over to the buyer when the amount shown on a bill of exchange is paid or when the customer accepts the bill as a contract to pay by a specified date. 16. Open account记账交易

17. D/P付款交单: Documents against payment 18. D/A承兑交单: Documents against acceptance 19. D/P at sight 即期付款交单 20. D/P after sight 远期付款交单 21. Title to the goods货物所有权

22. Ownership to the goods货物所有权 23. Insurance policy保险单

24. Remittance 汇付: This method is always employed by the parties who are

familiar with and trust each other

Answer the following questions:

1. Why is it difficult to effect payment in a straightforward manner in

international trade?

A: Purchase and sale of goods and services are carried out beyond national boundaries, which makes it rather difficult for the parties concerned in the transaction to get adequate information about each other’s financial standing and creditworthiness. Therefore, mutual trust in hard to build. Both the exporter and the importer face risks as there is always the possibility that the other party may not fulfill the contract.

2. Mention some of the risks the exporter and the importer may face in trade.

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A: For the exporter there is the risk of buyer default. The importer might fail to pay in full for the goods. He might go bankrupt; his government might, for various reasons, ban trade with the exporting country or ban imports of certain commodities; the buyer might run into difficulties getting the foreign exchange to pay for the goods. It is even possible that the buyer is not reliable and simply refuses to pay the agreed amount on various excuses.

For the importer, there is the risk that the shipment will be delayed, and he might only receive them long after payment. The delay may be caused by problems in production or transportation, and such delays may lead to loss of business. There is also a risk that wrong goods might be sent as a result of negligence of the exporter or simply because of his lack of integrity.

3. Explain briefly the following methods of payment: cash in advance; open

account; consignment transactions.

A: Cash in advance: in this case, the importer has no guarantee that the exporter will fulfill his obligations once he has made payment by cash.

Open account: in this case, the buyer and the seller know each other will. No documents are involved and that legally the buyer can pay anytime. The seller loses all control over the goods once they have been shipped. Sales on this basis are usually paid for by periodic payments, and obviously the exporter must have sufficient financial strength to carry the cost of the goods until receiving payment.

Consignment transactions: in this case, the exporter wishes to retain title or ownership to the goods, he has to send his goods abroad and will not get payment until the goods are sold. If not sold, the goods can be shipped back. Therefore this arrangement should only be made with full understanding of the risks involved and is preferably to be limited to stable countries where the exporter has a trusted agent to look after his interest.

4. What is a draft? Dose it have another name? What are the relevant parties in

relation to a draft?

A: A draft also called the ill of exchange is an unconditional order to a bank or a

customer to pay a sum of money to someone on demand or at a fixed time in the future.

The person who draws the draft, usually the exporter, is called the drawer, and the person to whom the draft is drawn is called the drawee. There is yet another party the payee, i.e. the person receiving the payment, who and the drawer are generally but not necessarily the same person.

5. What is the difference a sight draft and a usance draft and what is the

difference between a clean draft and a documentary draft?

A: A sight draft calls for immediate payment on presentation to the drawee while a usance draft is payable at a later date e.g. 30,45,60 or 90.

A clean draft is a draft without documents, and a documentary draft is accompanied by the relevant documents such as the bill of lading, the invoice, the insurance policy etc.

6. What is documents against payment? What are D/P at sight and D/P after

sight?

A: Documents against payment is a means of documentary collection that the relevant documents will not released to the importer until payment is effected.

D/P at sight requires immediate payment by the importer to get hold of the documents. D/P after sight gives the importer a certain period after presentation of the documents, but documents are not released to him until he actually pays for the merchandise.

7. What is the difference between D/A and D/P after sight? Which is more

favorable for the exporter?

A: D/P after sight gives the importer a certain period after presentation of the documents, but documents are not released to him until he actually pays for the merchandise. In the case of documents against acceptance (D/A), documents are handed over to the importer upon his acceptance of the bill of exchange drawn by the exporter. Payment will not be made until a later date. D/A is always after sight.

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So far as the exporter’s interest is concerned, D/P at sight is more favorable than D/P after sight, and D/P is safer then D/A.

8. Is payment by collection very common in international trade? Mention some

cases when collection is used.

A: Payment by collection is not very common in actual trade. It is usually used when the financial standing of the importer is sound, or when the exporter wishes to push the sale of his goods, or when the transaction involves only a small quantity.

Translate the following sentences into English:

1. 在国际贸易中进出口双方都面临风险，因为总存在对方不履约的可能。 In international trade, both the exporter and the importer face risks, as there is always the possibility that the other party may not fulfill the contract.

2. 为处理国际贸易中的不同形势，各种支付方法便发展了起来。

Various methods of payment have been developed to cope with different situations in international trade.

3. 许多国际交易是通过汇票支付的，汇票是对银行或顾客的支付命令。

A lot of international transactions are paid for by means of the draft, which (, also referred to as the bill of exchange,) is an order to a bank or a customer to pay.

4. 即期付款交单要求进口商立即付款以取得单据。

Documents against payment at sight requires immediate payment by the importer to get hold of the documents.

5. 就出口商而言，即期付款交单比远期付款交单有利，付款交单比承兑交单有

利。

So far as the exporter’s interest is concerned, D/P at sight is more favorable then d/P after sight, and D/P is more favorable then D/A.

Lesson 11

The Letter of Credit (I)

Business Knowledge:

(1) The definition of the letter of credit

(2) The unique and characteristic feature of the letter of credit

(3) The relevant parties of the letter of credit and their roles in its process of

operation

A. The applicant B. The opening bank C. The advising bank D. The beneficiary

E. The negotiating bank F. The confirming bank

(4) The major contents of the letter of credit

(5) The documents being the only concern of the banks in credit operation. Terms:

1. Applicant (Opener or Principal)申请人: The person who instructs his bank to

issue an L/C. (the importer)

2. Opening bank (Issuing bank, Establishing bank)开证行: The bank that issues

the credit

3. Beneficiary受益人:The exporter in whose favor the credit is opened

4. Correspondent band往来行、关系行:The bank in the exporter’s country, which

the opening bank sends the credit to it

5. Advising bank通知行: The bank in the exporter’s country, which advises the

exporter the L/C, is received. 6. Amendment修改

7. Confirming bank保兑行: The bank adds its confirmation to the credit. 8. Reimburse偿付 9. Unit price单价

10. Partial shipment分批装运 11. Transshipment转运

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12. The uniform customs and practice of documentary credits跟单信用证统一惯例 13. In favor of 以?为受益人的 14. The carrying vessel载货船只

15. The letter of Credit (L/C、L/C)信用证:The credit is a letter issued by a bank at

the request of the importer in which the bank promises to pay upon presentation of the relevant documents.

16. Paying bank付款行: The bank accepts or negotiates the bill of exchange.

17. Negotiating bank议付行: The bank buys the exporter’s draft submitted to it

under a credit.

Answer the following questions:

1. What constitutes conflicting problems for international trade in respect of

payment? Why?

A: In international trade it is almost impossible to match payment with physical delivery of the goods, since the exporter prefers to get paid before releasing the goods and the importer prefers to gain control over the goods before paying the money.

2. What is the unique feature of the letter of credit? How does it offer security

to the buyer and the seller?

A: The bilateral security is the unique and characteristic feature of the letter of credit. The seller has the security to get paid provided he presents impeccable documents while the buyer has the security to get the goods required through the documents he stipulates in the credit.

3. When was the modern letter of credit introduced and when did it have

substantial development? What are the other names of the letter of credit? A: Modern credits were introduced in the second half of the 19th century and had substantial development after the First World War. “Letter of credit” is often shortened as L/C or L.C. and is sometimes referred to as “banker’s commercial letter of credit”, “banker’s credit”, “commercial credit” or simply “credit”.

4. Why does the exporter sometimes require a confirmed letter of credit? Who

usually adds confirmation to the credit?

A: Sometimes the exporter may require a confirmed letter of credit, either because the credit mount is too large, or because he does not fully trust the opening bank. The confirming bank usually adds its confirmation to the credit.

5. What are the main contents of a letter of credit? Mention these items (at least

10 items).

(1) The number of the credit and the place and time of its establishment. (2) The type of the credit

(3) The contract on which it is based.

(4) The major parties relevant to the credit, such as the applicant, opening bank,

beneficiary, advising bank, etc. (5) The amount or value of the credit.

(6) The place and date on which the credit expires.

(7) The description of the goods including name of commodity, quantity,

specifications, packing, unit price, price terms, etc.

(8) Transportation clause including the port of shipment, the port of destination, the

time of shipment, whether allowing partial shipments or transshipment. (9) Stipulations relating to the draft. (10) Stipulations concerning the shipping documents required. (11) Certain special clauses if any, e.g. restrictions on the carrying vessel and the route. (12) Instructions to the negotiating bank. (13) The seal or signature of the opening bank. (14) Whether the credit follows “the uniform customs and practice for documentary

credits”.

6. What are the banks concerned with in credit operations? Does a credit

guarantee that the goods invoiced are those purchased?

A: In credit operations all parties concerned deal in documents, and not in goods, service and / or other performance to which the documents may relate. It does not guarantee that the goods purchased will be those invoiced or shipped.

7. In case of problems with the quality or quantity of the goods, whom shall the

buyer contact so long as the documents comply with the terms and conditions

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of the credit?

A: If the importer (buyer) finds any problems with the goods, e.g. inferior quality or insufficient quantity, he has to contact or even take legal action against the exporter (seller) instead of the bank so long as the documents are “proper” on their face. Translate the following sentences into English:

1. 在国际贸易中几乎不可能使付款和实际交货同时进行。

In international trade it is almost impossible to match payment with physical delivery of the goods.

2. 信用证付款方式对买卖双方都提供保障。

The method of payment by the letter of credit offers security to both the seller and the buyer.

3. 现代信用证在19世纪后半叶开始采用，第一次世界大战后得到了实质性的

发展。

Modern credits were introduced in the second half of the 19th century and had substantial development after the First World War.

4. 要么因为信用证金额过大，要么因为对开证行不完全信任，出口商有时可能

需要保兑的信用证。

Either because the credit mount is too large, or because he does not fully trust the opening bank, the exporter may require a confirmed letter of credit. 5. 信用证的形式、长短、语言和规定各不相同。

Letters of credit are varied in form, length, language, and stipulations.

Lesson 12

The Letter of Credit (II)

Business Knowledge:

(1) Major types of credits and their functions, forms and mechanism

A. Clean credit and documentary credit B. Revocable credit and irrevocable credit C. Confirmed credit and unconfirmed credit D. Sight credit and usance credit

(2)

E. Transferable credit and non-transferable credit F. Non-draft credit G. Revolving credit

The limitations of the letter of credit

A. Inability to provide absolute security

B. Being more expensive than other forms of payment

Terms:

1. Clean credit光票信用证: The credits only require clean draft. 2. Non-trade settlement非贸易结算

3. Revocable credit可撤消信用证: The credits can be altered or even canceled

without consulting with the beneficiary.

4. Irrevocable credit不可撤消信用证: The credits can not be amended or revoked

without the consent of all the parties concerned. 5. Maturity到期，满期 6. Nationalize国有化

7. Confirmed credit保兑信用证: The credit is confirmed by a bank other than the

issuing bank

8. Leading bank (Prime bank, First rate bank)主要银行

9. Sight credit即期信用证: The credit by which payment can be made upon

presentation of the draft and impeccable documents by the beneficiary to the bank.

10. Usance credit (Term credit, Time credit)远期信用证:The credit by which

payment cannot be made until a specific date or a specific time after the date of after sight.

11. Capital turnover资金周转 12. Face value面值

13. Transferable credit可转让信用证: The credit can be transferred by the original

beneficiary to one or more parties.

14. Non-transferable credit不可转让信用证: The credit can not be transferred. 15. Non-draft credit无汇票信用证: The credit that payment of to be made by

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presentation of the documents without the formality of drawing and presenting a draft.

16. Discount折扣

17. Deferred payment延期付款

18. Revolving credit循环信用证: The credit stipulated that its amount can be

renewed or reinstated without specific amendment to the credit being made. 19. Insolvent无支付能力的

20. The documentary credit跟单信用证: The credits that require shipping

documents to be presented together with the draft. 21. A particular transaction一笔特定的交易

Answer the following questions:

1. Explain the difference between clean credit and documentary credit. Where

is the former generally used?

A: Credits that only require clean draft, i.e. draft not accompanied with shipping documents, for payment are clean credit. They are generally used in non-trade settlement or in payment in advance by means of the L/C.

2. What is an irrevocable letter of credit? If a credit is not specified as revocable

or irrevocable, what type should it be regarded?

A: The credits can not be amended or revoked without the consent of all the parties concerned is an irrevocable letter of credit. If a credit is not specified as revocable or irrevocable, it should be regarded as irrevocable.

3. By whom is confirmation undertaken in the case of a confirmed letter of

credit?

A: The confirmation is undertaken either by the advising bank or by another leading bank.

4. Since a confirmed credit provides the greatest degree of security to the

beneficiary, it should be used for all transactions. Is this statement right?

Why?

A: No. It involves additional cost as a result of the confirmation. If the establishing bank is a reliable prime bank, confirmation may not be necessary.

5. What is the advantage of a sight letter of credit to the beneficiary?

A: It gives the beneficiary better security and helps him speed up his capital turnover.

6. What does the beneficiary do in the case of a usance credit if he wishes to get

payment before the maturity of the draft?

A: If the beneficiary wishes to get payment before the maturity of the draft, he can ask the bank to discount the acceptance, and immediately pay him the net proceeds.

7. How many times and to how many parties can a credit be transferred?

A: A credit can be transferred only once. There are two parties involve: the first beneficiary and the second beneficiary.

8. In what situation is a revolving letter of credit most useful?

A: It is particularly useful when the buyer and seller have regular trading relationship and deal in a specific quantity of goods each month or any particular period of time.

9. Can the letter of credit provide absolute security for the contracting parties?

What losses may the seller or the buyer still sustain?

A: It cannot provide absolute security for the contraction parties. The seller may sustain losses because of the buyer’s delay or even failure in the establishment of credit. The buyer may suffer losses as result of the documents presented by the seller which do not truly represent the goods shipped. And it is not absolutely avoidable that the bank may become insolvent or bankrupt.

10. What is a non-draft credit? How many types can it be classified into?

A: The credit that payment of to be made by presentation of the documents without the formality of drawing and presenting a draft.

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Translate the following sentences into English:

1. 信用证按其作用、形式和机制分作不同的种类。

Letters of credit are classified into different types according to their function, form and mechanism.

2. 光票信用证主要用于非贸易结算，而在商品贸易中一般使用跟单信用证。 Clean letters of credit are mainly used in non-trade settlement, while the documentary credits are generally used in commodity trade.

3. 在即期信用证情况下，提示汇票和正确无误的单据后便立即付款。

In the case of sight credits, payment can be made promptly upon presentation of draft and impeccable documents.

4. 远期信用证显然要使用远期汇票。付款期限可为30天、60天甚至可长达180

天。

A usance credit obviously calls for a time draft, and the usance varies from 30, 60, to as long as 180 days.

5. 如果信用证可以由原受益人转让给另一个或几个人，那么这种信用证即为可

转让信用证。原受益人称作第一受益人，接受转让的人称作第二受益人。 A little of credit is called transferable if it can be transferred by its original beneficiary to one or more parties. The original beneficiary is called the first beneficiary and the party (or parties) the credit is transferred to is called the second beneficiary.

6. 对于一笔具体交易来说，信用证不一定是最理想的付款方式。缔约双方应根

据具体情况做出最好的选择。

The letter of credit may not be the most ideal method of payment for a particular transaction, and the contraction parties should make their best choice according to the specific conditions.

Lesson 13

Major Documents Required in World Trade

Business Knowledge:

(1) The importance of correct documentation (2) Major types of documents A. Commercial Invoice

a. Major contents b. Points to be noted B. Packing list

a. Major contents

b. Documents with similar function: specification list; weight list (weight note;

weight memo)

C. The bill of lading

a. 3 major functions b. Major contents

c. Clean on board bill of lading d. Airway bill and cargo receipt

D. Insurance policy and insurance certificate

a. Major contents

b. The difference between the two E. Various certificates Terms:

1. Documents单据

2. Documentation单据的制作或使用 3. Take delivery of提（货） 4. Commission佣金 5. Discount折扣

6. Shipping marks唛头、运输标记 7. Bill of lading提（货）单

8. Carrier承运人: The shipping company 9. Shipper货主、托运人、发货人

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10. Consignor托运人 11. Carriage运输，运费 12. Consignee收货人

13. Notify party到货通知人、被通知人 14. Payable应支付的、可支付的 15. Airway bill空运（提）单 16. Railway bill收货单（铁路）

17. Insurance policy保险单（大保单） 18. Insurance certificate保险单（小保单） 19. Cargo receipt铁路运单、货运收据

20. Commercial invoice商业发票: The document is the general description of the

quality and quantity of the goods and the unit and total price. The contents: Invoice number and the date; name and address of the buyer and the seller; contract number and credit number; description of the goods including name of the commodity, quantity, specifications, etc.; unit price, total price, price terms, and commission and discount if any; terms of delivery and terms of payment; packing, shipping marks, etc.; and seal or signature of the exporter. 21. Legal holder合法持有人 22. Customs invoice海关发票 23. Consular invoice领事发票 24. Consular visa领事签证 25. Shipping advice装船通知 26. Certificate of quality品质证书 27. Certificate of weight重量证书 28. Certificate of quantity数量证书 29. Certificate of health健康证书

30. Certificate of disinfection消毒证书 31. Certificate of origin产地证书 32. Veterinary certificate兽医证书

33. Packing list装箱单: The documents gives information such as the number, date,

name and description of the goods, shipping marks, packing, number of packages,

specific contents of each package and its net with and gross weight etc.

34. Straight bill of lading记名提单: It is made out so that only the named consignee

is entitled to take delivery of the goods under the bill. 35. Port of shipment发货港、装运港、起运港

Answer the following questions:

1. What are the possible consequences of incorrect documentation?

A: If the documents are not eh correct ones, the importer will have difficulties in taking delivery of the goods.

2. What factors decide the types of documents required for a particular

transaction?

A: Different documents are required for different transactions, depending on the nature of the deal, the term of delivery, the type of commodity, stipulations of credit, regulations and practices in different countries, etc.

3. What is a commercial invoice? What is the relation between the commercial

invoice and other documents? Mention some of the major contents to be included in a commercial invoice.

A: A commercial invoice is the general description of the quality and quantity of the goods and the unit and total price. It constitutes the basis on which other documents are to be prepared, and the banks check the conformity between credit terms and documents and the conformity between the documents. The contents: Invoice number and the date; name and address of the buyer and the seller; contract number and credit number; description of the goods including name of the commodity, quantity, specifications, etc.; unit price, total price, price terms, and commission and discount if any; terms of delivery and terms of payment; packing, shipping marks, etc.; and seal or signature of the exporter.

4. Mention 2 types of shipping documents that are similar in function to the

packing list. What is the difference between them and the packing list?

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A: Specification list that emphasizes the description of the specifications of the goods. The weight list, weight note, or weight memo that put emphasis on the weight of the goods and are generally used for goods that are based on the weight for price calculation.

5. What are the 3 major functions of the bill of lading?

(1) B/L serves as a cargo receipt signed by the carrier and issued to the shipper

or consignor.

(2) B/L constitutes a contract of carriage between the carrier and the consignor. (3) B/L is a document of title to the goods, and the legal holder of it is the owner

of the goods it covers.

6. What is a clean on board bill of lading? Is a foul (not clean) bill of lading

acceptable?

A: The clean bill of lading is one that states that the goods have been shipped in apparent good order and condition. A foul bill of lading is not acceptable for negotiating.

7. Give the names of the counterparts of the ocean bill of lading in the case of

air transportation and railway transportation.

A: For air transportation the document is called airway bill, and in railway transportation is called cargo receipt.

8. In what currency should the goods be insured? Where are insurance claims

to be settled?

A: The currency of the amount insured should be the same as that of the credit. The port of destination is taken as the place for settling claims.

9. Is it acceptable for the date of the insurance document to be later than the

date of the Bill of Lading? Why?

A: No, it is not accepted. Because if the date is later than the B/L means the goods is not covered by the insurance in this period.

Translate the following sentences into English:

1. 在国际贸易中使用正确的单据很重要，否则进口商提货时会遇到困难。 It is very important to use the correct documents in international trade; otherwise the importer will have difficulties in taking delivery of the goods. 2. 商业发票，一般称“发票”，这种单据对货物的质量和数量以及单价和总价

进行概括性的描述。

The commercial invoice, generally called the invoice makes a general description of the quality and quantity, unit price and total value of the goods.

3. 货物在运输过程中可能发生风险损失，需要办理货物保险。

It is necessary to insure the goods against the possible risks they are exposed to in the course of transportation.

4. 已装船提单表明货物已实际转上开往目的港的承运船只。

An on board bill of lading indicates that the shipment has been actually loaded on the carrying vessel bound for the port of destination.

5. 清洁提单指货物在表面良好的情况下装船，这意味着提单上未加任何有关包

装或货物外表不良的批注。

A clean bill of lading refers to one that indicates the goods have been shipped in apparent good order and condition, which means that it is devoid of any qualifying remarks about the packing and the outer appearance of the goods.

Lesson 14

International Transportation

Business Knowledge:

(1) Definition of transportation and freight transportation (2) The five major modes of transportation (3) Three types of carrier ownership

A. Common carriers B. Contract carriers

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C. Private carriers

(4) Importance, role and contribution of transportation

(5) The four factors that are substantially changing transportation

A. Transportation deregulation B. Just-in-time inventory systems

C. Competition based on high levels of customer service D. Globalization of business Terms:

1. Finished products制成品 2. Deregulation放松管制 3. Productivity生产率

4. Cost economies节约成本、成本节约 5. Intermediate products中间产品、半成品 6. Natural product province自然产品领域 7. Inventory存货、库存 8. Logistics物流

9. Just-in-time inventory system零库存

10. Common carrier公共承运人: It is privately or publicly owned companies

committed to performing a movement service of the same quality for all shippers on an equal basis and without discrimination.

11. Contract carrier契约承运人: Individual contracts may be arranged between

transportation users and carriers (the transportation company). 12. Private carrier自有承运人

13. Representative carriers代表性的运载工具 14. Production approach生产方式

15. Transportation and freight transportation运输和货物运输: In broad sense,

transportation is defined as movement of freight and passengers from one location (place) to another. In a formal sense, freight transportation is defined as the economic movement of commodities and products and the effects of such movement on the development and advancement of business. 16. Carrier承运人

17. Shipper托运人= Consigner 18. Consignee收货人

Answer the following questions:

1. What are the major modes of the modern freight transportation system?

A: The five major modes of the modern freight transportation system are water, rail, truck, pipeline, and air.

2. What is the most important contribution of transportation to the society? A: The most important contribution that transportation has made to the production process is that, by widening the market areas that a producer can reach, it has encouraged the introduction of more efficient, larger-scale production techniques.

3. What is the difference between domestic transportation and international

transportation mentioned in the text?

A: Movements between countries are accompanied by many more documents than is the case for domestic shipments.

4. What are the factors that determine the amount of documentation required? A: The product being shipped, its origin, and its destination determine the amount of documentation required.

5. What are the major reasons for the trend among business firms to provide

their own transportation capability?

A: Peculiarities in operations, desires for total distribution control, cost economies, and stringent service requirements are the major reasons for this trend.

6. Can you summarize briefly the factors that have caused the changes in the

transportation industry?

A. Transportation deregulation B. Just-in-time inventory systems

C. Competition based on high levels of customer service D. Globalization of business

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7. What is the meaning of transportation deregulation? Give one of the results

of the deregulation.

A: Before deregulation, government regulatory agencies, in effect, controlled carriers rates and the service offerings that carriers made available to the public. Innovation was not encouraged.

8. The globalization of business has not only made transportation more

important but also promoted the development of this industry. Do you agree to the above statement? Could you give some examples to illustrate the viewpoint?

A: Yes. More and more companies purchase their production inputs anywhere in the world where the best quality for the price can be found. For all the companies the need to competitively serve world markets will require a more sophisticated logistics system.

9. The six criteria that choosing a transportation.

A: In choosing a transportation mode for a particular product, shippers consider as many as six criteria: speed, frequency, dependability, capability, availability and cost.

Translate the following sentences into English:

1. 毫无疑问，一个没有先进的运输系统的社会仍然是一个原始落后的社会。 There is no doubt that a society without an advanced transportation system remains primitive.

2. 这些方式在运作特点和性能方面不同，从而使它们各有比较优势和劣势。五

种运输方式分别是：水路、铁路、公路、管道及航空。

The modes differ in terms of operating characteristics and capabilities, giving them comparative advantages and disadvantages. The five major modes are water, rail, truck, pipeline, and air.

3. 过去10年，公司自己提供运输能力的倾向越来越大。

The past decade has seen an increasing tendency among business firms to provide

their own transportation capability.

4. 作为一个社会，我们现在的生活比完全自给自足时更富裕，更休闲。

As a society, we enjoy a richer and more leisurely life than we would be in a totally self-sufficient community.

5. 最近几年运输功能引人注目的另一个因素就是越来越多的使用零库存系统。

这种系统是以公司保持很少数量的生产投入的生产方式为基础的。

Another factor that has thrusted the transportation function into the limelight in recent years is the growing utilization of just-in-time inventory systems, on the basis of a production approach in which the firm maintains very small quantities of production inputs.

Lesson 15 Insurance (I)

Business Knowledge: (1) Definition of insurance

(2) The idea of a known premium vs. the uncertainty of risk

(3) The common pool and the advantages enterprises can gain from it (4) Insurance for overseas trade

A. Necessity B. Function Terms:

1. Insured被保险人，保户: The person who transfer risk.

2. Insurer承保人: The person or a company who assume risk (the insurance

company, the underwriter). 3. Claim索赔

4. Client客户，主顾 5. Margin保证金 6. Draw提取，支取 7. Jeopardy危险，风险 8. Literature文献，说明书

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9. Underwriter保险公司

10. Known premium已知的保险费 11. Pool统筹的资金，共同的款项

12. Cargo insurance货物保险: It is an activity aimed at moving the burden of risk

from the shoulders of the exports and importers, and placing it upon the shoulders of specialist risk-bearing underwriters.

13. Marine insurance海上保险: The insurance of ships and their cargoes.

14. Insurance保险: It is a social device in which a group of individuals transfer risk

and provides for payment of losses from funds contributed by all members who transferred risk.

15. Values exposed to loss损失的价值 16. Release of funds腾出资金 17. Broker经纪人

Answer the following questions:

1. What is meant by “potential loss” in the second paragraph? A: Potential loss means a great deal of uncertainty risk.

2. Without insurance what kind of uncertainty maybe experienced by an

individual or an enterprise?

A: Without insurance, there would be a great deal of uncertainty experienced by an individual or an enterprise, not only as to whether a loss would occur, but also as to what size it would be if it did occur.

3. “There will be some variation in claim costs from year to year and the

premiums include a small margin to build up a reserve upon which the company can draw in bad years.” Paraphrase the above sentence and explain especially the implication of “bad years”. A: The year that the claim costs is rising.

4. What are the functions of insurance?

A: Insurance is a risk transfer mechanism, whereby the individual or the business enterprise can shift some of the uncertainty of life onto the shoulders of others.

5. What is transportation insurance? Why is it so important?

A: It is an activity aimed at moving the burden of risk from the shoulders of the exports and importers, and placing it upon the shoulders of specialist risk-bearing underwriters.

Similarly the time lag is great between production and consumption. In bridging both the geographical gap and the time gap serious risks have to be run. And it is in this framework that the insurance underwriters operate to carry the risks which otherwise would have to be borne by the producers.

6. Do you think it is necessary to change the term “marine insurance” in to

“transportation insurance”? Why and why not?

A: Yes. Goods do not go overseas solely by sea-air transport takes and increasing share of cargo these days.

7. Why do businessmen like to pay a premium into an insurance pool even

though trade did exist when there was no method of insurance available in the past?

A: The premium payable to an insurer, however, would only be a small proportion of the fund required because of the pooling arrangements, and so most of this money could be invested in new plants, buildings or stock.

8. Explain the underlined expression in the sentence “He does not want to scoop

the pool”.

A: He would prefer his cargoes to reach their destination safely.

Translate the following sentences into English:

1. 保险是一种风险转移机制。通过保险个人或企业可以将生活中一些不确定因

素转移给其他人。

Insurance is a risk transfer mechanism, by which the individual or the business

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enterprise can shift some of the uncertainty of life onto the shoulders of others.

2. 即使是在这种情况下，大多数公司宁可付已知的费用即保费来转移风险，而

不愿面对不确定的风险损失。

Even in these circumstances the majority of firms prefer to pay a known cost or premium for the transfer of risk, rather than face the uncertainty of carrying the risk of loss.

3. 对企业来说损失的价值要比个人高很多。因此保险费也比一栋房子或一辆车

高出许多。

In the case of business enterprises, the values exposed to loss are usually much higher and the premium charged is substantially higher than that for a house or a car.

4. 企业投保的主要刺激是他们可以腾出资金，进行其他项目的投资。

The main stimulus to enterprise is the release of funds for investment in the production of other items.

5. 货物保险是一种目的在于把风险从进口商和出口商的肩上转移到专门承担

风险的保险人一方的活动。

Cargo insurance is an activity aimed at moving the burden of risk from the exports and importers to the underwriters.

Lesson 16 Insurance (II)

Business Knowledge:

(1) Three main principles of insurance

A. Insurable interest B. Utmost good faith C. Indemnity

(2) Two sub-principles of insurance

A. Contribution B. Subrogation

(3) The doctrine of proximate cause

(4) Three basic types of marine insurance

A. Free from particular average (F.P.A.) B. With particular average (W.A.) C. All risks Terms:

1. Port of origin始发港 2. Voidable无效的

3. Indemnity赔偿原则: It holds that a contract of insurance is one, which restores a

person who suffered a loss into the same position as he was before the loss occurred. 4. Ruin破产

5. Insurable interest可保利益: It holds that no one may insure anything unless he

has and interest in it. (Which means that if the thing insured is preserved he will derive a benefit form its preservation, but if it is any way damaged or lost the assured will be adversely affect.) 6. Terms of sale价格条件、买卖条款 7. All Risks全险、一切险、综合险

8. Principle of utmost good faith最大诚信原则：The people who decide what

premium is fair for a particular cover do so on the basis of written statements made in a proposal form. 9. Subrogation代位求偿原则

10. Contribution分摊原则: It holds that a person cannot be allowed to insure twice

for the same risk, and claim compensation from both insurers. If two policies do cover the same event, the insurance companies contribute pro rata to the loss, and the insured is only restored to the indemnity position.

11. Proximate cause of the loss近因原则: It means that when an insurance policy is

made out to cover a certain risk, a claim becomes payable only if that risk occurred as the proximate (closest) cause of the loss suffered. 12. Forwarding charges转运费

13. F. P.A.平安险: Free from particular average

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14. W.P.A. (Or W.A.) 水渍险: With particular average 15. Adversely affected受到负面影响

16. Force majeure不可抗力: Social or natural calamities that take place beyond the

control of a contraction party. Answer the following questions:

1. What are the basic principles of insurance that firms must follow when they

seek cover for goods?

A: Three main principles of insurance

a. Insurable interest b. Utmost good faith c. Indemnity

Two sub-principles of insurance a. Contribution b. Subrogation

The doctrine of proximate cause

2. Can you give some examples to illustrate “insurable interest”?

A: You can insure your own car, for if it is damaged you will have to pay for it to be repaired and consequently you will suffer a loss. You cannot insure your neighbor’s car, for if it is damaged you will not suffer any loss.

3. How important is insurable interest?

A: Every contract of insurance requires an insurable interest to support it, or otherwise it is invalid and any claim made upon it will not be entertained.

4. What is the most important fact about “utmost good faith”?

A: The people who decide what premium is fair for a particular cover do so on the basis of written statements made in a proposal form. If this statement is untrue, then the premium agreed on will not be a fair one. Even though the mis-statement was unintentional, the underwriter would still be deceived and the policy voidable.

5. How are cargo policies usually calculated for values to be covered?

A: In Cargo policies the compensation payable generally includes the invoiced cost plus freight, the insurance premium, and an agreed percentage, say 10%.

6. Will the insurer compensate the claim for loss for which the risk covered is

not the proximate cause?

A: The insurance company will not entertain the claim if the risk covered is not the proximate cause of the loss.

Translate the following sentences into English:

1. 没有可保利益的保险合同是无效的。而任何根据这类合同提出的索赔都不会

被受理。

An insurance contract without insurable interest to support is invalid, and any claim made upon it will not be entertained.

2. 尽管错误的陈述是无意的，但保险人还是受到欺骗。从而保险合同无效。 Even though the mis-statement was unintentional, the underwriter would still be deceived and the policy voidable.

3. 将受损失人的利益恢复到损害发生前的状况的合同就是保险合同。

A contract of insurance is one that restores a person who suffered a loss into the same position as he was in before the loss occurred.

4. 赔偿金额一般包括发票金额加上运输费用及保险费再加上一个商定的百分

比，如10%。

The compensation payable generally includes the invoiced cost plus freight, the insurance premium, and an agreed percentage, say 10%.

5. 如果投保的险别不是造成损失的直接原因，保险公司将不予赔偿。

The insurance company will not entertain the claim if the risk covered is not the proximate cause of the loss.

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Lesson 17

International Monetary System and Exchange Rate

Business Knowledge:

(1) The international monetary system

A. Sterling-based gold standard B. Dollar-based gold standard C. The floating system (2) Exchange rate

A. Fixed exchange rate B. Flexible exchange rate

C. Major factors influencing exchange rate

a. International balance of payment b. Inflation c. Interest rate

D. Common measures for intervention in exchange rate

a. Buying or selling foreign currency b. Raising or lowering discount rate c. Foreign exchange control

E. The pros and cons of the two different kinds of exchange rate F. Direct quote and indirect quote

G. Buying price, selling price medial price

Terms:

1. Exchange rate汇率、兑换率: It refers to the price at which one currency can be

exchange for another currency. 2. Gold standard金本位制 3. Peg钉住、挂钩

4. Reserve currency储备货币

5. Clean float清洁浮动、自由浮动 6. Dirty float肮脏浮动、管理浮动 7. Discount rate贴现率

8. Idle funds游资、热钱、闲置资金

9. Direct quote / quotation（汇率）直接标价: A direct exchange rate is the price of

a foreign currency in terms of the home currency. 1美元=6.8元 外币为基准 10. Indirect quote / quotation（汇率）间接标价: An indirect exchange rate is the

price of home currency in terms of a foreign currency.

11. Buying rate买入价: It refers to the rate by which a commercial bank buys a

currency.

12. Selling rate卖出价: It is the rate by which a bank sells a currency.

13. Medial rate中间价 It is the average of the buying rate and the selling rate. 14. Par value平价（货币的票面价格） 15. Great Depression大萧条

16. SDRs 特别提款权: Special drawing Right 17. BOP国际收支: Balance of Payment

18. BOP deficit / favorable BOP 国际收支赤字/国际收支盈余（顺差） 19. Foreign exchange control外汇管制

20. Fixed exchange rate / Flexible exchange rate固定汇率/浮动汇率 21. Pro rata按比例

Answer the following questions:

1. Explain briefly the meaning of the gold standard? What kind of exchange

rate system did it create?

A: The earliest international monetary system was known as the gold standard under which countries pledged to change their paper currencies into gold when requested to do so.

The gold standard created a fixed exchange rate system as each country pegged the value of its currency to gold to establish its par value.

2. How much can you tell about the Bretton Woods Conference? What is meant

by “adjustable peg”?

A: The Bretton Woods Conference established a US dollar based gold standard. Because of the dominating economic and political influence of the United Stated.

Under the new fixed exchange rate system, each participant promised to maintain

35

the par value of its currency, allowing a fluctuation of only one percent. “Adjustable peg” means the country concerned had to intervene if the market value of its currency goes beyond the range. Under special circumstances, a country was allowed to adjust the par value of its currency.

3. What is the Special Drawing Right? How was it created?

A: Special Drawing Right, SDRs for short is also called paper gold. It is used to settle official transactions at the IMF.

SDRs were created for reducing the demand for the dollar as a reserve currency.

4. What are the major factors that may influence the exchange rate? Explain

briefly.

A: (1) International balance of payment. The value of one’s own currency will go up with favorable balance of payment and drop with BOP deficit.

(2) Inflation. When inflation intensifies, the value of the currency will drop relative to foreign currencies and vice versa.

(3) Interest rate. Under specific conditions, high interest rate will attract short term international fund, increasing the exchange rate of one’s own currency and vice versa.

5. What is meant by clean float and dirty float? What are the common

measures taken for intervention in exchange rate?

A: Clean float or free float means the government takes no various measures to intervene in the price of its currency. By the contrast, it is called managed float or dirty float.

6. Illustrate the respective advantages and disadvantages of the flexible

exchange rate system and the fixed exchange rate system.

A: The fixed exchange rate system reduces the riskiness of international business and is also an important measure to curb inflation. However the system is vulnerable to disorderly changes in currency value.

Flexible exchange rate can also protect domestic currency form the impact of foreign idle funds and helps to prevent the drain of foreign exchange reserve. But

frequent wild swings of the value of currencies will increase the riskiness of trade and affect international investment.

7. How are exchange rates published daily? What quote does China use? How

about the other major countries?

A: Exchange rates are published daily in two different ways: A direct quote and an indirect quote.

Most countries or regions including China use the direct quote, but the United States and Britain use the indirect quote.

8. What are the three types of foreign exchange price? Where are the buying

rate and the selling rate marked in the respective case of direct quote and indirect quote?

A: There are three types of foreign exchange price: The buying rate, the selling rate and the medial rate.

In the case of direct quote, the first figure after the fixed amount of foreign currency is the buying rate and the second figure after the fixed amount of foreign currency is the selling rate. And in the case of indirect quote the first figure after the fixed amount of home currency is the selling rate and the second figure is the buying rate.

Translate the following sentences into English:

1. 第一次世界大战以前，金本位制建立了固定汇率制，每个国家通过将本国货

币与黄金挂钩来确定其货币的平价。

Before the First World War, the gold standard created a fixed exchange rate system as each country pledged the value of its currency to gold to establish its par value.

2. 1944年44国在美国布雷顿森林举行会议签署了协议，计划在世界贸易和货

币方面实现更好的合作。

In 1944, 44 nations held a conference at Bretton Woods, U.S.A., to plan to better cooperation in world trade and currency matter.

36

3. 弹性汇率制从没有真正地“干净”或自由地浮动过。因为中央银行为了稳定

汇率采取了各种措施对货币价格进行干涉。

The flexible exchange rate system has never been clean float or free float, because the central banks take various measures to intervene in the price of its currency in order to stabilize the exchange rate..

4. 在特定条件下，提高汇率可以吸引国外短期资金，提高一国的外汇汇率。 Under specific conditions, high interest rate will attract short-term international fund, increasing the exchange rate of one’s own currency.

5. 外汇汇率有三种形式，即：买进汇率、售出汇率和两者的平均值——中间汇

率。

There are three types of foreign exchange price namely: the buying rate, the selling rate and the average of the previous two the medial rate.

Lesson 18

International financial Organizations

Business Knowledge:

(1) The World Bank Group

A. Constituent parts

B. Objectives: Raise standards of living in developing countries (2) The International Bank for Reconstruction and Development (IBRD)

A. Source of its capital

B. Financing of its lending operations C. Operation of loans granting

a. Repayment time and grace period b. Target countries c. Interest rate

D. Basic rules governing its operation

(3) The International Development Association (IDA)

A. Relation with IBRD and membership B. Objective

C. Source and terms of credits

(4) The International Finance Corporation (IFC)

A. Function

B. Relation with IBRD

(5) Multilateral Investment Guarantee Agency (MIGA)

A. Mandate

B. Ways for carrying out the mandate (6) International Monetary Fund (IMF)

A. The importance of the quota

B. Major function and lending mechanism Terms:

1. Financial resources资金 2. Finance提供资金 3. Earnings收益、赢利 4. Private sector私营经济 5. Equity investment股权投资 6. Grace period优惠期、宽限期

7. Capital infrastructure基础建设资金 8. World Bank Group世界银行集团

9. IBRD国际复兴开发银行: International Bank for Reconstruction and

Development

10. IDA国际发展协会: International Development Association 11. IFC国际金融公司: International Finance Corporation

12. MIGA多边投资担保机构: Multilateral Investment Guarantee Agency 13. IMF国际货币基金组织: International Monetary Fund: 14. BIS国际清算银行: The Bank for International Settlement 15. Economic restructuring经济结构调整 16. Voting power投票权 17. Borrowing power借款权 18. Gold tranche黄金份额 19. Gold reserve黄金储备

37

20. Standby arrangement备用（信贷）安排

21. Quota of IMF份额: The deposit paid by each member to the IMF.

22. SDR特别提款权: Special Drawing Right. It is sometimes called paper gold and

used to settle official transaction at the IMF. Answer the following questions:

1. What institutions does the World Bank Group consist of?

A: The Bank, the International Bank for Reconstruction and Development (IBRD) and its three affiliates, the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), are referred to as the World Bank Group.

2. What are the principles governing the lending of the International Bank for

Reconstruction and Development?

A: IBRD loans generally have a grace period of five years and are repayable over fifteen to twenty year. They are directed toward developing countries at more advanced stages of economic and social growth. The interest rate the IBRD charges on its loans is calculated in accordance with a guideline related to its cost of borrowing.

3. What is meant by hard loans and soft loans? What institutions are they

associated with respectively?

A: The loans with good repayment prospects are called “hard loans”. Each loan is made to a government or must be guaranteed by the government concerned. This loan is supplied by IBRD.

The loans with significant risk of not being repaid are called “soft loans”. Such loan is supplied by IDA, to loan for the poorer developing countries.

4. Why are the funds used by IDA called credits? What are the major sources of

the credits?

A: The funds used by IDA called credits is to distinguish them from IBRD loans.

The major sources of the credits is in the form of subscriptions, general replenishments from IDA’s more industrialized and developed members, and transfers from the net earnings of the IBRD.

5. What is the function of IFC? What is the prerequisite for a country to be a

member of IFC?

A: The function of IFC is to assist the economic development of less-developed countries y promoting growth in the private sector of their economies and helping to mobilize domestic and foreign capital for this purpose. Membership in the IBRD is a prerequisite for membership in the IFC.

6. What is MIGA? What are its functions?

A: MIGA, Multilateral Investment Guarantee Agency, Its functions is to encourage equity investment and other direct investment flows to developing countries through the mitigation of noncommercial investment barriers.

7. Please find out from the text the paramount task of the World Bank?

A: The paramount task of the World Bank is to emphasize investments that can directly affect the well-being of the masses of poor people of developing countries (by making them more productive and by integrating them as active partners in the development process).

8. In what aspects does the World Bank make efforts to reduce the poverty of

developing countries?

A: Investments to improve education, ensure environmental protection, expand economic opportunities for women, strengthen population planning, health, and nutrition services, and develop the private sector.

9. What is the objective of the International Monetary Fund? What is the

relation between the IMF and the United Nations?

A: The major function of the IMF is in the area of providing temporary financing for countries suffering cyclical, seasonal or random shocks that would weaken its currency.

Both IBRD and IMF are institutions under the United Nations.

10. What is the quota of the International Monetary Fund? Is it important?

Why?

38

A: The quota of IMF is the deposit paid by each member to the Fund (that reflects the importance of a member’s economy). It is very important as it determines a member’s voting power in and borrowing power from the IMF, and serves as part of its official reserves.

11. Explain briefly how a member borrows from the International Monetary

Fund?

A: When necessary, a member country is allowed to borrow up to its gold tranche contribution, (now called reserve tranche contribution) automatically and an additional 100 percent of its contribution in 4 steps, each with additionally stringent conditions established by IMF.

Translate the following sentences into English:

1. 这些机构的共同目标是通过把发达国家的资金输送到发展中国家帮助这些

国家提高生活水平。

The common objective of these institutions is to help raise standards of living in developing countries by channeling financial resources to them from developed countries.

2. 国际复兴开发银行的资金有相当大一部分来自它的留存盈余以及偿还贷款

的不断流入。

A substantial contribution to the IBRD’s resources comes from its retained earnings and the flow of repayments on its loans.

3. 该银行的贷款是向处于经济和社会发展较高阶段的发展中国家提供的。 The loans of IBRD are directed toward developing countries at more advanced stages of economic and social growth.

4. 国际货币基金组织旨在向那些在付款方面有困难的基金会员国提供中长期

贷款。

The purpose of IMF is to provide medium term loans to those members with payment difficulties.

5. 为了承担这项使命，多边投资担保机构向投资者提供担保以防范非商业性风

险，向发展中成员国政府提供咨询，并为国际商业界与东道国政府就投资问题安排对话。

To undertake this mission, MIGA offers investors guarantees against noncommercial risks, advises developing member governments on policies and sponsors dialogues between the international business community and host governments on investment 5. Greenfield strategy绿地战略: The firm builds new facilities on land bought or

leased in a foreign country before starting its new operation. 6. Acquisition并购: Purchasing existing facilities. 7. Joint venture合资企业

8. Investment returns投资收益 issues.

Lesson 19

Foreign Direct Investment

Business Knowledge:

(2) Major factors for undertaking FDI

A. Supply side factors供给方面的因素

a. Reducing costs

b. Gaining access to resources c. Utilizing technology

B. Demand side factors需求方面的因素

a. Gaining easy access to customers

b. Gaining advantages of direct operation abroad c. Following customer mobility C. Political factors政策方面的因素

a. Getting around trade barriers

b. Utilizing favorable investment policies

(3) Forms of FDI

A. Greenfield strategy (building new enterprises) B. Acquisition (purchasing existing facilities) C. Joint venture

Terms:

1. Returns收益

2. Customer mobility客户流动 3. Inventory存货 4. Tax holiday免税期

9. JIT即时库存管理: Just In Time

10. VER自动出口限制: Voluntary Export Restriction 11. The strategic alliance（合资企业）战略联合 Answer the following questions:

1. How do you understand FDI? Please explain it with one or two specific

examples

A: The residents of one country acquire assents in a foreign country for the purpose of controlling and managing them. / The country acquires assets in a foreign country for the purpose of controlling and managing them.

2. What are the possible factors on the supply side that influence a firm?s

decision to undertake FDI? A: a. Reducing costs

b. Gaining access to natural resources c. Utilizing technology

3. Are controlling costs a major motivation for firms to undertake FDI? Why? A: Yes. Lowering production costs is an consideration. A foreign country may have lower land prices, tax rates or cost of labor, all of which will reduce the production costs to a considerable degree, making foreign locations more attractive.

4. Are there and factors on the demand side encouraging enterprises to make

investment abroad? What are they?

A: Yes, there are. (1) Getting easy access to customers.

(2) Getting advantages of direct operation abroad (3) Following customer mobility

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5. What is meant by JIT? How does it affect the turnover of the supply of the

goods?

A: JIT, Just In Time. The introduction of JIT inventory management system can minimize the inventory of the stock so as to increase the efficiency of the operation.

6. Does a firm have to put the political factors into consideration when making

choice of investment overseas? What are these factors? A: Yes, it does. (1) Getting around trade barriers

(2) Utilizing favorable investment policies

7. Illustrate with examples what “the Greenfield strategy” is?

A: The firm builds new facilities on land bought or leased in a foreign country before starting its new operation. Such a firm can make its own choice in respect of the site, and install up-to-date facilities.

8. What is acquisition? What is a joint venture? Please explain their respective

advantages and pitfalls.

A: Purchasing existing facilities is known as acquisition. It does not have to start from scratch and face the difficulties in the greenfield strategy. But it has to take responsibilities for all the liabilities of the purchased firm, and deal with existing problems in management, labor relations, environmental protection obligations etc. A joint venture is an independent business entity founded and owned by two or more partners called parents. The proportions of ownership between the partners may be equal or unequal depending on their respective investments that are mostly in the form of capital but may also be in land, equipment, or intellectual property. The strategic reduces the cost of market entry of a foreign firm since working together with a host country partner will help overcome some major obstacles. The strategic alliance also enables the partners to share risks in business and helps them to gain knowledge and expertise from each other. Some pitfalls should be guarded against such as incompatibility of partners; disputes in distribution of earnings, possible loss of autonomy and problem s arising out of changing circumstances.

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Translate the following sentences into English:

1. 对外直接投掷是国际投资的主要方式，一国居民为进行督控和经营通过对外

投资获取另一国的资产。

Foreign direct investment is the major form of international investment, whereby residents of one country acquires assets in a foreign country for the purpose of controlling and managing them.

2. 控制成本是一些企业进行对外投资的主要动机之一。而降低生产成本是考虑

的一个重要方面。

Controlling costs is the first major motivation for engaging in FDI. And lowering production costs is an important consideration.

3. 直接在国外经营提高一个公司产品的能见度，使当地客户对他们所购买的商

品更加放心。

Operation directly abroad enhances the visibility of a firm’s products, making local customers feel more assured about the things they buy.

4. 即时库存管理系统的引进能最大限度地降低库存从而提高经营效率。

The introduction of JIT inventory management system can minimize the inventory of the stock so as to increase the efficiency of the operation.

5. 国外直接投资主要有三种形式：建立新企业、购买现有设备和建立合资公司。 FDI is mainly practiced in three forms: building new enterprises, purchasing existing facilities and forming joint ventures.

Lesson 20

The International Stock Exchange

Business Knowledge:

(1) The role of stock exchange

A. Capital raising market (primary market)

B. Market place for government stocks, company securities, and other

investment instrument (secondary market) (2) Three areas of the Domestic Equity Market

A. The listed market

B. The unlisted securities market C. The third market (3) The gilt-edged market (4) The traded options market (5) The foreign equities market

Terms:

1. Investor投资者 2. Securities有价证券

3. Finance资金，资金支援

4. Equities（股息不定的）普通股，股票 5. Broker经纪人，中介人，掮客 6. Jobber股票买卖经纪人 7. Hedge保护，防御 8. Shortfall亏空，不足

9. Stock exchange证券（股票）交易所 10. Long-term capital长期资本

11. Secondary capital market二级资本市场 12. Primary capital raising初级/原始资本市场 13. Market floor=trading floor交易大厅

14. Market maker进行不可撤消的购买和销售的公司 15. Listed market挂牌证券交易市场 16. Income tax所得税

17. Gilt-edged stocks / securities金边债券 18. Options期权（合同），选购权

19. Cost-effective有成本效益的，划算的

20. Public Sector Borrowing Requirement公共部门借贷需求 21. Books账目

22. VAT增值税: Value added tax

23. Institutional Investors金融机构投资者

24. ISE国际证券交易所: International Stock Exchange

25. SEAQ证券交易自动报价系统: Stock Exchange Automated Quotations System 26. RIE指定投资交易所: Recognized Investment Exchange 27. Listed company / corporation上市公司= the list company 28. The gilt-edged market金边债券市场 29. The traded options market期权交易市场 30. The foreign equities market外国股票市场 31. Financial market金融市场 32. Money market货币市场 33. Discount market贴现市场 34. Capital market资本市场 35. Securities market证券市场

36. Foreign exchange market外汇市场

Answer the following questions:

1. What is capital-raising market? Can you give it an appropriate definition? A: A capital-raising market is a regulated framework, based on statute, whereby long-term capital in the form of tradable securities can be raised by companies and government.

2. What is meant by “investment instruments”

A: Investment instruments are those tools for the investors by which investors can reach the purpose of his investment-making profits.

3. Is the market floor still as significant as it used to be? How is most business

done today?

A: No., it isn’t. This has now changed with the introduction of new technology. The market floor is now a SEAQ (Stock Exchange Automated Quotations System) Television screen located in the broker’s office-anywhere in the United Kingdom or overseas, but connected to the Exchange’s computers in London. The brokers now

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conclude deals over the telephone and through computer systems on behalf of their clients.

4. How are the investors protected if they choose to do business with the

International Stock Exchange?

A: High standards of investor protection are provided by a well-established complaints procedure, discipline and enforcement arrangements as well as a compensation fund. ISE member firms undergo rigorous admission procedures, and their employees who deal with the public (called Registered Representatives) are required to have certain qualifications, usually obtained by taking examinations set by the Exchange.

5. In what way do the International Stock Exchange member firms enroll their

employees?

A: ISE member firms undergo rigorous admission procedures, and their employees who deal with the public (called Registered Representatives) are required to have certain qualifications, usually obtained by taking examinations set by the Exchange.

6. Can you explain the phrase “to raise capital on a cost-effective basis”?

A: To raise capital on a cost-effective basis means the capital raised can be effected at a lower cost, meanwhile producing a very good outcome.

7. What makes it necessary for a government to be involved in securities

business?

A: A large proportion of the government spending is raised through income tax, VAT, corporation tax and other taxes. However, a shortfall usually remains, which has to be met by borrowing, in order to balance the books, One of the ways the government meets the Public Sector Borrowing Requirements is by selling gilt-edged stocks. Gilts are bought and sold in huge quantities, mainly by institutional investors.

8. What does “to balance the books,” mean? What does the word “books” refer

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to?

A: To balance the books means the cash flow of government balanced books are contracts to the cash flow statements. “Books” here refers to business accounts or records.

9. What does “option” mean?

A: Options are contracts giving the right to buy and sell a security at an agreed price within a particular period of time.

10. What does “foreign equities” refer to? Is it becoming an important part of

securities business?

A: Foreign equities that refer to securities listed on overseas exchanges have become an increasingly important part of the business of securities firms whether or not these firms were members of the ISE.

Translate the following sentences into English:

1. 选择权是指在特定的时间内按规定的价格购买或出售一种证券的权利。 Options are contracts giving the right to buy and sell a security at an agreed price within a particular period of time.

2. 未挂牌证券市场是为了满足已经确立了地位的，但是较小的，而且不太成熟

的公司的需求而建立的。

The Unlisted Securities Market is to meet the needs of established, but smaller, less mature companies.

3. 政府满足公共部门借贷需求的方法之一就是出售金边证券。

One of the ways the government meets the Public Sector Borrowing Requirement is by selling gilt-edged stocks.

4. 通过为证券的发行和交易提供中心市场，股票交易所长期为政府、工业以及

投资商的需求服务。

The Stock Exchange has long served the needs of government, industry and investors in providing the central market place for the issue and trading of securities.

5. 国际股票交易所提供了一种途径，使人们的存款能够为那些需要资金的人所

利用。

The International Stock Exchange exists to provide a channel through which these 1. Most-favored nation clause最惠国待遇条款

2. Most-favored nation treatment最惠国: A treatment under which a country is

required to extend to all signatories any tariff concessions granted to any savings can reach those who need finance.

Lesson 21

The World Trade Organization and China

Business Knowledge: (2) WTO and GATT

A. Work done by GATT

B. Most-favored nation clause and generalized system of preferences C. Causes and objectives of cresting WTO D. Differences between WTO and GATT *

a. Agreement vs. full-fledged organization b. Mandate

c. Enforcement power

(3) WTO and China

A. Efforts by China in honoring its commitment

a. Amending laws and regulations

b. Lowering tariff and non-tariff measures c. Further opening of service trade

d. Strengthening protection of intellectual property rights B. Achievements by China since accession to WTO

a. Import and export

b. Foreign direct investment

c. Trade surplus and foreign exchange reserve d. Sensitive industries C. Major challenges faced

a. Protectionist measures b. Intensified competition

c. Challenges faced by agriculture

Terms:

participating country.

3. GSP普惠制Generalized System of Preferences: Under the system, developed

countries grant developing countries favorable lower tariffs without granting them to developed members. And the developing countries do not have to reciprocate such favorable treatment to the developed countries. So the GSP is an important exception to the non-discrimination principle of MFN. 4. Non-discriminate principle非歧视原则 5. Contracting party缔约国、缔约方 6. Tariff quota关税限额制、关税配额 7. Trade-related有贸易有关的 8. Standard of living生活水平 9. Full employment充分就业 10. Tariff concession关税减让 11. Uruguay Round乌拉圭回合

12. Counter-veiling measures反补贴措施 13. Differential treatment差别待遇

14. Anti-dumping investigation反倾销调查 15. NT: National treatment国民待遇

16. GATT关税与贸易总协定: General Agreement on Tariffs and Trade 17. WTO世界贸易组织: World Trade Organization

18. UNCTAD联合国贸易与发展会议: United Nations Conference on Trade and

Development

19. ITO国际贸易组织: International Trade Organization 20. UNGA联合国大会: United Nations general Assembly

Answer the following questions:

1. Making a brief account of the origin and development of WTO (including its

predecessor). When did it formally start operation?

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A:参见答案P.443

2. What is the cumulative effect of all the GATT negotiations in respect of

tariffs?

A: A number of tariff negotiating conferences were held under the auspices of GATT during the course of the years GATT was functioning. The cumulative effect of those multilateral trade negotiations realized substantial reduction of tariffs. Tariff rate by the developed countries fell from an average of over 40 percent to about 3 percent in 1995.

3. Explain the principles of GSP. How and when was it established?

A: The Generalized System of Preferences (GSP) is meant to assist developing countries in their economic development efforts. Under the system, developed countries grant developing countries favorable lower tariffs without granting them to developed members. And the developing countries do not have to reciprocate such favorable treatment to the developed countries.

The GSP was established in 1968 after years of endeavors by developing countries in the UNCTAD and the GATT.

4. How many rounds of negotiations were held under GATT? What important

decision was made before the conclusion of the Uruguay Round?

A: Altogether 8 rounds of protracted yet fruitful multilateral trade negotiations were held since GATT entered into force in 1947 till the end of 1993 when the last round, the Uruguay Round finally concluded.

Before the conclusion of the Uruguay Round, a big decision was made to establish a permanent organization, the World Trade Organization.

5. What are the three major objectives of WTO? A: The three major objectives of WTO are:

a) To promote free trade by encouraging members to adopt nondiscriminatory, predictable trade policies

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b) To further reduce trade barriers through multilateral negotiations. c) To establish more effective trade dispute settlement procedures.

6. Is the WTO a mere replacement of GATT? How does WTO differ from its

predecessor?

A: No. Instead of being a mere replacement of GATT, the WTO differs from its predecessor in several prominent dimensions.

I. A the name suggests, the GATT is only an agreement, or more exactly an interim secretariat, rather than an organizational entity in the true sense, while the WTO is a full-fledged permanent organization, with the biennial ministerial meeting as its supreme decision-making body, affording it more political clout and a higher international profile. And its subsidiary bodies specialize in different areas.

II. The WTO has a much broader mandate. In addition to promoting commodity trade that used to be the focus of GATT, the WTO is also responsible for service trade, international intellectual property protection and trader-related investment.

III. The WTO has far greater enforcement powers. Unlike GATT, the new organization has a clearly defined dispute settlement mechanism. Its verdict is binding on all its members. In this respect, the WTO is akin to an international court of justice for world trade with the institutional strength and legal mandate to implement its decisions.

7. What has China done to honor its commitments for gaining accession to the

WTO?

A: As a responsible large nation, China has been doing a lot in honoring its commitments for entering the WTO. In a short span of three years, China amended over 2,300 laws and regulations of which over 800 were abolished. The overall tariff level was lowered from about 40% to 10.5%. Non-tariff measures including quota and import license were removed step by step. The sector of service trade has been opened further. Protection of intellectual property right considerably strengthened.

8. Does it pay for China to devote such a lot of efforts for WTO membership?

Mention some of its major performances in respect of trade and investment.

A: Yes. All these efforts have produced positive results both for the other members of the WTO and for China itself who has made good use of the opportunities offered by the organization. For instance, China’s total volume of import and export doubled from 502 billion US dollars in 2001 to over 1.1 trillion US dollars in 2004, ranking the third in the world only after the united States and Germany. For three consecutive years, the country remained the largest recipient of foreign direct investment with the average yearly figure exceeding 50 billion US collars, showing the improvement of its investment environment in line with the requirement of the WTO. Contrary to the worry of some people that there would be trade deficit after entry into the WTO, China still enjoys a favorable balance of trade of 12 billion US dollars. And China’s foreign exchange reserve increased to 550 billion US dollars, being the second largest foreign exchange reserve next only to that of Japan. The sensitive industries liable to the impact of the WTO entry such as agriculture, automobile, retail business, banking, insurance and telecommunication all registered encouraging development.

9. Are all the worries before China?s entry into WTO groundless? What major

challenges does China still face despite all its achievements? A: 参见答案P.447

Translate the following sentences into English:

1. 关贸总协定体系（现为世界贸易组织）是通过一系列的贸易谈判或回合发展

起来的，它最初有三个基本目标。

The GATT system (now WTO) was development through a series of trade negotiations or rounds. It originally had three basic goals.

2. 加入世界贸易组织对中国有益，因为它将促进中国的改革和发展，提高商品

和服务的质量，降低商品成本和服务费用，刺激投资和创造就业机会，改善法制。

China’s WTO accession will benefit China because it will help advance its reform and development, improve the quality and reduce the cost of goods and services, spur investment and the creation of new jobs, and promote the rule of law.

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3. 世界贸易组织的只要目的是为了促进自由贸易、进一步减少贸易壁垒并建立

更有效的贸易纠纷解决机智。

The main objectives of WTO are to promote free trade, further reduce trade barriers, and establish more effective trade dispute settlement procedures.

4. WTO争端解决机制是当今国际水准上的最为活跃的体系而且对国际法的持续

发展具有重大意义。

The WTO dispute settlement system is the most active one today at the international level and has tremendous importance for the progressive development of international law.

5. 尽管中国取得了很大的成就，但仍然面临巨大的挑战。一部分挑战和竞争来

自农业、银行和保险业，还有一部分来自于一些国家所采取的贸易保护主义措施。

Despite all the achievements, China still faces big challenges. Some of the challenges and competition are from the agricultural sector and banking and insurance industries. And some are caused by the protectionist measures in some countries.

Lesson 22

The United Nations Conference on Trade and Development

Business Knowledge:

(2) The origin of the United Nations Conference on Trade and Development

(UNCTAD)

(3) Objective of UNCTAD

A. General function

B. Specific standpoints of developing countries

a. Concluding more agreements or taking measures to help the new

countries

b. Opening up the market of western nations to manufactures of the new

states

c. Providing more aid to the less-developed countries

C. The idea of a “new international economic order” (4) Organization of UNCTAD

A. As a permanent organ of the General Assembly B. Members

a. All members of the UN and its specialized agencies b. The “Group of 77”

C. Requirement of decision making D. The Trade and Development Board

E. Committees and the International Trade Center F. Permanent secretariat

Terms:

1. Escape clauses免责条款、例外条款

2. United Nations General Assembly联合国大会 3. Invisibles无形贸易= invisible trade

4. Non-discrimination principle (principle of non-discrimination treatment)无差别

待遇

5. Terms of trade贸易条件

6. New international economic order国际经济新秩序 7. Differential treatment差别待遇 8. Preferential customs tariffs特惠税 9. Transfer of technology技术转让

Answer the following questions:

1. Why should the developing countries urge the creation of a new institution

when ECOSOC and GATT had already been there?

A: Because they argued that the problems discussed by these two bodies mainly concerned the economic interests of the developed countries and considered GATT as a “rich men’s club”.

2. What is the meaning of non-discrimination principle?

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A: It is also called Principle of Nondiscrimination Treatment. It refers to the practice or policy of refraining from discrimination, i.e. basic principle to treat all persons or parties equally no matter how rich or poor where no reasonable distinction can be found between those favored and those not favored. It may be reflected in treatment, service or rates.

3. What does “commodity” exactly refer to in the following sentence: “Although

in 1963 there were 43 international organizations dealing with commodity and other trade problems… ”

A: “commodity” here refers to anything bought and sold; any article of commerce.

4. What is the theme of the 11th session of UNCTAD?

A: The theme of the 11th session of UNCTAD is to coordinate development strategies for the promotion of the economic development of the world especially of the developing countries.

5. Could the developed countries benefit from giving aid to developing countries?

Why?

A: Yes, they could benefit from giving aid to the less-developed countries. The western nations would also have an economic interest in bringing greater prosperity to the low-income countries, since their exports to these territories would thus be stepped up.

6. What do you know about the Group77?

A: The less-developed countries of UNCTED are known as the “Group of 77” which was created on 15th June 1964 and at present includes more than 130 members.

7. How do you understand the sentence “support along these lines might be

some kind of compensation for the ?exploitation? of the former colonies”? A: Most of the less-developed countries were exposed to one or more countries’ invasion in their history while some of less-developed countries’ prosperity in some

degree due to the “exploitation” of the former colonies, so support to less-developed countries might be some kind of compensation.

8. What are the specific aims of developing countries? demand for more cash

and trade concessions from the developed countries? A: Their specific aims are to have some Special Drawing Rights.

9. What is the meaning of “at their disposal”? Could you find a similar

expression to replace it?

A: “At their disposal” means “available to use as one wishes”. A similar expression to replace it is “to deal with freely”.

10. How are conference decisions and board decisions made?

A: Conference decisions require a two-thirds majority but procedural matters a simple majority only. Board decisions are taken on a simple majority.

Translate the following sentences into English:

11. 尽管第一次会议没有制定出具体目标，联合国贸易和发展会议的总任务是制

定、协商和实施改善发展进程的措施。

Although no specific objectives were laid down at the first conference, the general function of UNCTAD is to formulate, negotiate and implement measures to improve the development process.

12. 在没有有效协议的情况下，一旦出口收入下降，应立即采用强制的和自动的

补救措施。

In the absence of effective agreements, compulsory and automatic compensatory measures should be introduced as soon as there is a decline in export earnings.

13. 实际上西方国家在使低收入国家繁荣起来的同时，其对这些国家的出口将增

加，因此也能获得经济效益。

The western nations would, indeed, also have an economic interest in bringing greater

47

prosperity to the low-income countries, since their exports to these territories would thus be stepped up.

14. 国际经济新秩序主要是要求发达国家提供更多的现金和贸易方面的优惠。 The new international economic order consists mainly in a demand for more cash and trade concessions from the developed countries.

15. 贸易和发展理事会是联合国贸易和发展会议的常设机构。

A trade and development Board is the permanent organ of the United Nations Conference on Trade and Development.

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