国际商务英语重要知识点识记

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.Differentinnaturalandeconomicconditions

The major types of international business

A. Trade

https://www.360docs.net/doc/134657491.html,modity 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

Answer the following questions:

1.Whatdoesinternationalbusinessreferto?Pleasetellthedifferencebetweeninternationalbusinessanddo mestic business.

A:Internationalbusinessreferstotransactionbetweenpartiesfrom

differentcountries.Sometimes businessacrossthebordersofdifferentcustomsareasofthesamecountryis alsoregardedasimportandexport.

Some major differences between international business and domesticbusiness is following:

(1)Differences in legal systems

(2)Differences in currencies

(3)Differences in cultural background

(4)Different in natural and economic conditions

2.Pleaseexplainthedifferencesbetweenvisibletradeandinvisibletrade.Whichisbecomingmoreandmore important andaccounts for anincreasingproportionininternationaltrade?

A:Visibletradeistheformofcommoditytrade.Theformoftransportation,communication,banking,insur ance,consulting,informationetc.iscalledinvisibletradeorserviceindustries.Thelater is becomemore andmoreimportant.

3.Canyoucitesomeexamplestoillustrateculturaldifferencesininternationalbusiness?

A:Culturaldifferencesincludinglanguage,customs,traditions,religion,value,behavioretc.

4.Please elaborate on the two categories of international investment. What is their major difference?

A:FDI(Foreigndirectinvestment)ismadeforreturnsthroughcontrollingtheenterprisesorassetsinvestedi ninahostcountry.Portfolioinvestmentreferstopurchasesof foreignfinancialassetsfora purposeotherth ancontrolling.Suchfinancialassetsmaybe stocks,bonds orcertificatesofdeposit.

5.Whatislicensing?Whydo firmssometimes choose it as a means ofenteringaforeign market?

A:Inlicensing,afirmleasestherighttouseitsintellectualpropertytoafirminanothercountry.Theychooselic ensingbecausetheydonothavetomakecashpaymentstostatbusiness,andcansimplyreceiveincomeinthef ormofroyalty.Besides,they can benefit fromlocationaladvantagesofforeignoperationwithoutanyobligationsinownershipormanagement.The useoflicensingisparticularlyencouragedby highcustomsdutyandnon-tariffbarriersonthe partofthe hos t country.

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

A:Underfranchising,franchiseeisallowedtooperateinthename

ofanother,franchiserwhoprovidesthe formerwithtrademarks,brandnames,logosandoperatingtechniq uesforroyalty.Incomparisonwiththerelationbetweenthelicenserandthelicensee,thefranchiserhasmore controloverand providesmoresupport for the franchisee.

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

A:Underamanagementcontract,onecompanyoffersmanagerialorotherspecializedservicestoanotherwi thinaparticularperiodforaflatpaymentorapercentageoftherelevantbusinessvolume.Whenagovernmen tforbidsforeignownershipincertainindustriesitconsiderstobeofstrategic 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:Foraninternationalturnkeyproject,afirmsignsacontractwithaforeignpurchaserandundertakesallthed esigning,contractingandfacilityequippingbeforehandingitovertothelatterupon completion.ForaBOT 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 aperiodisthemajordifferencebetweenBOTandthecommonturnkeyproject

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。Internationalbusinessreferstotransactionbetweenpartiesformdifferentcountries.Itinvolvesmorefacto rsandthusismorecomplicatedthedomestic 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。Withthedevelopmentofeconomicglobalization,fewpeopleorcompaniescancompletelystayawayfromi nternationalbusiness.Therefore,someknowledgeinthisrespectisnecessarybothforthebenefitofenterpri sesandpersonaladvancement.

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。Otherformsforparticipatingininternationalbusiness aremanagementcontract,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。Internationalbusinessfirsttooktheformofcommoditytrade,i.e.exportingandimportinggoodsproduced ormanufacturedin onecountryfor consumptionorresaleinanother.

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 mea ns 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

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(GrossnationalProduct)referstothemarketvalueofgoodsand service producedbythepropertyandlaborownedbytheresidentsofaneconomy.GDP(GrossDomesticProduct) measuresthemarketvalueofallgoodsandservicesproducedwithinthegeographicareaofaneconomy.The differencebetweenthemisthatGNPfocusesonownershipofthefactorsofproductionwhileGDPconcent ratesontheplacewhereproductiontakesplace. The differencebetweenGNPandGDPcanbeignoredsinceitverysmallinmostcases.Therefore,wecanusethe minterchangeably.

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

A:TotalGDPindicatestheoverallsizeofaneconomy,which isimportantinmarketassessmentfordurablee quipmentorbulkgoods(grain,steelor

cement).PercapitaGDPrevealstheaverageincomelevelofconsumers,whichisimportant whenmarketin

g consumer durables.

3.Whataremeantbyhighincome,middleincome,andlow-incomecountriesaccordingtotheWorld Bank? Citesome examplesforeach group.

A:High-incomecountries:thoseenjoyingannualpercapitaincomeOf$9386andabove.Inthisgroupcomp risethreetypesofcountries; most members

ofOECD,richoilproducingcountriesoftheMiddleEast,small-industrializedcountriesor regions. Middle-incomecountries:thosewithannualpercapitaincome

below$9386butabove$765.IncludedinthiscategoryismostEastEuropeancountriesandmostmemberso ftheCommonwealthofIndependentStates,sixOECDmembers,quiteanumberofLatinAmericancountri esandsomecomparativelydevelopedcountriesin Asia, South Africa and oil-producing countriesinAfr ican.

Low-incomecountries:thosethathavepercapitaincomesofonly$765orevenless.MostAfricancountries, someAsiancountriesandafewLatinAmericancountriesareincludedinthisgroup.

4. Whyare high-income countries importantto trade and investment? Shouldweneglectlow-incomecountries in international business?

A:

High-incomecountriesoftenhavegoodinfrastructure,highpurchasingpower,andadvancedtechnology,e fficientmanagementand

favorableenvironmentfortradeandinvestment.Theyofferprimemarketsforexpensiveconsumergoodsa ndarebothattractivesourcesanddestinationsofinvestment. In international trade the low-income cou ntries should not beneglected, because they

constitute markets for lower-priced staplegoods, provide cheap labor and are often rich in resources. Once tapped, the business potential of these countries will one day become real business opportun ities.

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-inco me 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 inclu de 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-i ncome countries. The

headquarters is in Paris.

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

A:

SofarasChinaisconcerned,othermarketsweshouldpayParticularattentiontoarethosearoundus:theFour Tigers,theASEANcountries,Russia,IndiaandabitfartherawayAustralia.Thesecountriesorregionseither haverichconsumersandoffergoodbusinessopportunitiesoraredevelopingfastwithverypromisingmarke tpotential.AndtheirgeographicalproximitytoChinaisagreatadvantageforusindevelopingbusinessrelati onswiththem.

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 whe re production takes place.

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 p rovides 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 threecategories 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。Chinawithapercapitaincomeofover$1100isamiddle-incomecountrythough itwas a low-income count ry just a few yearsago.

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 Potentialand 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)

Answer the following questions:

1.Whatisafreetrade area? Makea brief accountofthemost notablefreetrade areaintheworld.

A: Freetradeareaistheloosestformintheregionaleconomicintegration.Membersinthisformremovesbarrier stotheflowofgoodsandservicesamongthemselveswhileeachmemberstill adopts its ownpolicyasregardstotradewithoutsiders.ThemostnotableoneistheNorthAmericanFreeTradeAgree ment(NAFTA),thelargestfreemarketformedbytheUnitedStates,CanadaandMexicoin1991withover36 0millionconsumersandtotalGDPofmorethan6trillion 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 t oward countries outside their organization in addition to abolishing trade barriers among themselve s. Imports from other countries are subject to the same tariff.

3. What are the characteristics of a common market? Which organization remained a common mar ket for some years in the past?

A: Thecommonmarketisfurtherupthescaleof regional economic

integration.Besidesfreemovementofgoodsand servicesandadoptionofcommonexternaltradepolicy,fa ctorsofproductionsuchaslabor,capitalandtechnologyarefreetomoveamongmemberssothattheycanbe utilizedinamoreefficientandproductiveway.Inthepast,theEuropeanCommunityremained acommon marketfor some years.

4. How much do you know about an economic union? Can members of an economic union keep a ll 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 mobili ty. 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 sove reignty, which is eroding the tradition of the world political system based on the autonomy and sup reme 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 theestablishment of the European Economic Community with the aim of gradually realizing the free movement of goods, services, labor andcapital as well as the harmoni zation 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 (EU RATOM).

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 currencyfor

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 ofMinisters.

Its executive body is the European Commission composed of 20 commissioners overseeing 23 dep artments in charge of different affairs. Decisions of the council are made by votes allocated to me mbercountries 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, E conomic and Technical Cooperation Sub-committee of SOM and BudgetManagementCommittee.

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, mutualbenefits, adhering to an open and multilateral trading system and reduction of regional trade barriers. Its two wheels meantrade

and investment liberation and facilitation (TILF) and economic and technical cooperation (ECOT ECH).

9. What are the nature and objectives of OPEC?

A: OPEC is a commodity cartel. It tried to limit the overallcrude 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 larg est free market formed by the UnitedStates, 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, governme

nt 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:

(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

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, se rvice, 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 towar ds it? (有利和不利方面)

A: The pros is that with the basic feature of free flow ofcommodity, capital, technology, service, and information in the global context for optimized allocation, economic globalization is giving ne w impetus and providing opportunities to world economic development and meanwhile making th evarious economies more and moreinterdependent. 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 p ossible impacts.

3.What is the formal definition of a multinational enterprise? Howcan you tell whether a multinatio nal corporation is a parent or just an affiliate?

A: A multinational enterprise shall be defined as a businessorganization 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 internatio nal headquarters of the MNE. If the MNC is established as a result of investments by the MNE, w hether 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. Theneed 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 bythe 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 su ch as sourcing and pricing. They are also more able to take advantage of changes in the internation al economic environment. Such multi-nationality also enablesMNEsto engage in worldwide integ rated production and marketing.

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

A: MNCs are under the legal jurisdiction of their host governmentsthat 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 relativelyindependent 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 re sponsibility are concentrated at the headquarters that manages production and marketing to achiev e the economies of scale as much as possible.

c. Transnational Corporation: The activities and resources of thetransnational 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,thepossibility of conflicts

among sovereign states may be greatly reduced. Possibly they will be instrumental to the realizatio n 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 dev elopment and meanwhile making the various economies more and more 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 h eadquarters.

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 verysignificant 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 maybedecentralized to the affiliate

MNCs, the major decisions, such asthose 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

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 in one count ry with those produced in another sufficient.

2. Why did international trade first begin?

A: The distribution of natural resources is uneven. Some countriesare 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 techn ology?

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 an d selling the remainder to other countries.

4. According to the theory of absolute advantage, trade occurs only when a country has an absolut

e advantage or comparative advantage?

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

5. Who introduced the theory of comparative advantage? Which theory makes more sense, absolut

e advantage or comparative advantage?

A: David Ricardo, English economist, introduced the theory of comparative advantage. It seems th at 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 prod uction of both commodities, there is still a basis for mutually beneficial trade. The first should spec ialize 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 decidedby the endowments of nature? Gi ve 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 adv antage 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 internation al trade.

Lesson 6

International Trade II

Business Knowledge:

(1)Other bases for trade among countries

A. Patterns of demand: different consumption preference

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

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 takesplace 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-scaleproduction. 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 thequestion which countries will pro duce 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 havean advantage. The benefits of specialization may also be affected by transport cost. Protectionist measures that are often taken by governments are also barriers totrade.

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 bey ond national boundaries to includetwo or more independent nations is called a customs union. 6.What is most favored nation treatment? Is it a very special treatment? Why?

A: MFN treatment refers to a tariff treatment under which a country is required to extend to all sig natories any tariff concessions granted to any participating country. It gives a country the lowest tar iffs 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 ofa commodity during a given period of time. The limits may be in quantity or value terms, and quotas maybe on a country basis orglobal, without reference to countries 8.What are the differences between visible trade and invisible trade? Give a few examples of invisib le 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 itis 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 servic es 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 invisibl e 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)

1. 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 add itions to Incoterms?

A: If, when drawing up their contract, buyer and seller have some commonly understood rules to s pecifically refer to, they can besure 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 internationalrules for the interpretation of the mos t commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations o

f 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 increasi ng 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), GroupC (Main carriage paid) and Group D (Arrival).

5.Why should the compilers of Incoterms 2000 take the trouble toset 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 s uch costs are divided between the parties although, ofcourse, the seller might not have any inter est at all in the buyer’s further disposal of 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 payme nt of duty obligations under FAS and DEQ. Two is the loading and unloa ding 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 k nows 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 ti me 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 us e 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

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 obligationsmay be sued an d 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 discussi ons or those conducted through international trunk calls. Written negotiations often begin with en quiries.

3.Is an inquiry binding on the inquirer? What are a first inquiry, and what information should be gi ven in it?

A: No, it isn’t. A first enquiry is an enquiry sent to an exporter whom the importer has never dea lt with. The information should be given in the enquiry as to how the name and address of the ex porter have beenobtained, 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 descrip tion 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 basi s for its execution.

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

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

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 co ntracting 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 bin ding 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

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 importsfrom the buyer. Counter trade has attracted so much attention as it is oftenassociated 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 c ollapse 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 goo ds 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 ar rangements

4.What are the main features of the current counter trade? Can you summarize the categories briefl y under current counter trade?

A: Current counter trade partners are not necessarily familiar partners and goods exchanged are so metimes vertically related. Current counter trade can be categorized as follows: Barter, Counter pur chase, 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 a nd services taken back are tied to the original goods exported whereas that is not the case in count er purchase. Another important difference is that a buyback deal usually stretches over a longer pe riod 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 bundledtogether. In normal market tra nsactions buying and selling of goods and services is unbundled, and arrangement made possible b y the use of money and the “market”as an institution. Thus, an individual can sell goods and ser vices 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 t he 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 h elp perpetuate economic inefficiencies in the market place. Companies may suffer losses because th ey 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 competiti ve 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 for eign 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 th

e use o

f 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. 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)

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 mak es it rather difficult for the parties concerned in the transaction to get adequate information about e ach 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.

A: For the exporter there is the risk of buyer default. The importer might fail to pay in full for the g oods. 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 getti ng 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 b e 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 t ransactions.

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 eachother will. No documents are involv ed 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, th e 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 good s, 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 involvedand is preferably to be limited to stable countries where the exp orter 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 calledthe 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 relevan t 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 expor ter?

A: D/P after sight gives the importer a certain period after presentation of the documents, but doc uments are not released to him until he actually pays for the merchandise. In the case of