Unit 1 A brief introduction to international trade

Unit 1 A brief introduction to international trade

Key

I. Answer my questions

1. International trade is business whose activities involve the crossing of national borders. It includes not only international trade and foreign manufacturing but also encompasses the growing services industry in areas such as transportation, tourism, banking, advertising, construction, retailing, wholesaling, and mass communications. It includes all business transactions that involve two or more countries. Such business relationship may be private or governmental.

2. Sales expansion, resource acquisition and diversification of sales and supplies.

3. To gain profit.

4. To see out foreign markets and procurement.

5. There are four major forms which are the following:

Merchandise exports and Imports, Service Exports and Imports, Investment and Multinational Enterprise.

6. It is the account which is a summary statement of the flow of all international economic and financial transactions between one nation (eg.the United States ) and the rest of the world over some period of time, usually one year.

7. Merchandise Exporting and Importing.

8. Yes. There are great differences between them.

1) Direct investment

2) Portfolio investments

9. MNE is the abbreviation of the multinational enterprise. Its synonyms are NNC (the multinational corporation) and TNC (transnational corporation).

10. Examples are travel, transport, fee, royalties, dividends and interest.

11. The choice of forms is influenced by the objective being pursued and the environments in which the company must operate.

12. It is limited by the number of people interested in a firm’s products and services and by customers’ capacity to make purchase.

13. This is because at an early stage of international involvement these operations usually take the least commitment and least risk of a firm’s resources.

14. Royalties means the payment for use of assets from abroad, such as for trademarks patens, copyrights, or other expertise under contract known as licencing agreements.Royalties are also paid franchising.

15. It is a way of doing business in which one party (the franchiser) the use of a trademark that is an essential asset for the franchisers’ business.

II Match each one on the left with its correct meaning on the right

1. J 2.A 3.E 4.B 5.C 6.D 7.I 8.G 9.F 10.H

III Translate the following terms and phrases into Chinese

1 购买力 11经济复苏；恢复

2潜在销售量 12 经济衰退

3加价，涨价 13间接投资

4国内市场 14有形货物

5制成品 15有形进出口

6边际利润 16收入及支出；岁入及岁出

7市场占有率 17超额能力

8贸易歧视 18贸易中间人（商）；经纪人

9时机选择 19全部包建的工程承包方式

10经销周期 20许可证协定

IV. Case Study.

Batteries called “white elephant” exported from China were very popular in Southeast Asia, but in United States no one was interested in the goods. Why?

[Answer]：

Batteries called \"white elephant\" exported from China were very popular in Southeast Asia, because \"white elephant\" was a lucky thing in Southeast Asia, but no one was interested in it in the market of Europe and the United States. The boss of the company was very strange that the quality of the battery or the price of reasons, so he asked his staff to investigate. Finally he found that is the brand \"white elephant\" to be blame. The brand's name translated into English was \"white elephant\" which meant something were no use but cumbersome in Western countries. It was really a bad translation from culture information perspective. The meaning derived from a legend. According to the legend, there was a king who hated a minister, so he gave a white elephant to the minister for punishment. The minister has to take care of the white elephant, he couldn't give it to others or kill it because it's the king gave it to him. However, the appetite of the white elephant

was so great, and the minister became poorer. So it showed people in western countries would not buy the battery for the consumers have no willing to buy something useless but cumbersome.

V. Please try to find out some cases about cultural differences in doing international business.

(Open)

VI. Please determine whether the following statements are TRUE or FALES. Then put T for TRUE or F for FALES in the bracket at the end of each statement.

1. ( T ) 2. ( F ) 3. ( F ) 4. ( T ) 5. ( F ) 6. ( T ) 7. ( T ) 8. ( F )

VII. Translate the following into English

1. Trade is often the ‘engine’ of growth. However oversimplified this metaphor may be, it does serve to underline the importance of foreign trade in the process of growth. A healthy expansion of exports may not always be sufficient condition for rapid and sustained growth, but a strong positive association between the two is clearly undeniable. Trade expansion contributes to economic growth in many ways. Among them are the benefits of specialization; the favorable effects of international competition on domestic economic efficiency; the increased capacity to pay for the imports required in development and more generally the stimulus to investment.

2. International trade is the exchange of goods and services produced in one country for goods and services produced in another country. In addition to visible trade, which involves the import and export of goods and merchandise, there is also invisible trade, which involves the exchange of services between nations. Nations such as Greece and Norway have large maritime fleets and provide transportation service. This is a kind of invisible trade. Invisible trade can be as important to some nations as the export of raw materials or commodities is to others. In both cases, the nations earn the money to buy necessities.

3. There exist different ways of conducting international business. Exclusive sale means the seller gives the overseas client the exclusive right of selling a particular product in a designated area within a specified period of time. In this kind of business transaction, the product is bought by the exclusive seller and therefore he should sell the product by himself, assuming sole responsibilities for his profit and loss. Exclusive sale is different from agency where only commission is involved. And difference exists between general contract and exclusive sales because the exclusive seller enjoys exclusive right in a particular area.

4. There is no country in the world that can produce all the products it needs. Thus countries join in international division of labor for effective production and reproduction. Sometimes a country can buy goods and services from abroad on a barter basis. Barter means doing business by exchanging goods of one sort for goods of another sort without using money. Barter trade itself is not enough to meat a country’s import needs. But as a form of international trade, it is still attractive in developing countries where foreign exchange is in short supply and

inflow of foreign funds is far from sufficient to meet their obligations in external trade.