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一、What does international business refer to? Please tell the difference between international business and domestic business.1. International business refers to transactions between parties from diffirent countries.There are four major diffrences between international business and domestic business:1) differences in legal system2) differences in currencies3) differences in cutural background4) differences in natural and economic conditionsPlease 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?2. Commodity trade, i.e exporting and importing goods produced or manufactured in one country for consumption or resale in another. This kind of trade is also referred to visible trade. Invisible trade is in the form of transportation, communication, banking, insurance, consulting, information etc. Invisible trade is becoming more and more important and accounts for an increasing proportion in international trade.Can you cite some examples to illustrate cultural differences in international business?3. Cultural differences including language, customs, traditions, religion, value, behavior etc.Please elaborate on the two categoreis of international investment. What is their major difference?4. Foreign direct investments or FDI for short 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.What is licensing? Why do firms sometimes choose it as means of entering a foreign market?5. In licensing, a firm leases the right to use its intellectual property to a firm in another country.Firms choose licensing because they do not want to make cash payments to start business, and can simply receive income in the form of royalty. Besides, they can benefit from locational advanteges of foreign operation without any obligations in ownership or management.What is franchising? How is it different from licensing?6. Under franchising, a fim, called the franchisee, is allowed to operate in the name of another, called the franchiser who provides the former with trademarks, brand name, logos, and operating techniques for royalty. In comparision with the relation between the licenser and the licensee, the franchiser has more control over and provides more support for the franchisee.What is a management contract? Under what conditions is it most applicable?7. 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 volum.When a government forbids foreign ownership in certain industries it considers to be of strategic importance but lacks the expertise for operation, management contracts may be a practical choice enabling a foreign company to operate in the industry without owning the assets.What is an international turnkey project? In what way is its variant BOT different from it?8. For an interantional turnkey project, a firm signs a contract with a foreign purchaser and undertakes all the designing, contracting and facility equiping before handing it over to the latter upon completion.For a BOT project, a firm operate 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. Franchise: an arrangement by which a monopoly producer or owner gives another permission for the exclusive right to manufacture or sell the products in certain area.Royalty: money paid to the owner of a copyright fr permission to publish copy right material and to the owner of a patent for permission to use a patented design, usu, at an agreed percentage of the selling price of the product.Patent: a special right to an inventor to be the only person to make and sell, or to authorize others to make and sell a newly-invented machine or process.Non-tariff barries: all forms of man-made obstructions to international trade other than tariffs, including prohibitions and quotas, etc.Portfolio: the entire collection of investments in the form of stocks, bonds, or certificate of deposits for purposes other than controlling.Turnkey project: one in which one of the parties agrees to supply, at the contract price, a complete product ready for use, such as a new home, factory, ship, etc.Budget: an account of probable future income and expenditure during a stated, period, usu, a year used as a guide in making financial arragements.Return: the gain from an investment, either as income or yield or as profit on the sale of the investment.Expertise: expert knowledge or skill, esp. in a particular field; know-howLicensor: a person or company granting a licence二、Explain the concepts of GNP and GDP respectively and point out their major difference. Can we use them interchaeably?1. GNP refers to the market value of goods and services produced ty the property and labor owned by the residents of an economy.GDP measures the market value of all goods and services produced within the geographic area of an economy.The difference between GNP and GDP is that the former focuses on ownership of the factors of production while the latter concentrates on the place where production takes place.The difference between GNP and GDP can be ignored since it is very small in most cases, so we can use them interchangeably.What are meant by high income, middle income, and low income countries according to the World Bank? Cite some exaples for each group.2. Those enjoying annual per capita income of $9386 and above are classified as high-income countries. This group comprises three types of countries.a) most members of the Organization for Economic Cooperation and Development(OECD)b) rich oil producing contries of the middle east (Kuwait, Saudi Arabia, United Arab Emirates).c) Small-industrialized countries or regions such as Israel, Singapore, Hong Kong and Taiwan.Countries with annual per capita income below $9386 but above $765 are regarded as middle-income countries. 1) most East European countries and most members of the Commonwealth of Independent States, six OECD members.(Czech, Greece, Hungary, Mexico, Turkey)2) quite a number of Latin American countries and some comparatively developed countries in Asia.(Indonesia, Malaysia, the philippines, Thailand)3) Among the African countries, South Africa and oil-producing Libya, Nigeria and Algeria.Lower income countries are those that have per capita incomes of only $765 or even less.1) Most African contries, some Asian countries and a few Latin American countries.Why are high income countries important to trade and investment? Should we neglect low income countries in international business?3. High-income countries often have good infrastructure, high purchasing power, advanced technology, efficiet 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. We should not neglect low income countries in international business, because they constitute markets for lower-priced staple goods, provide cheap labor and are often rich in resources. What is more important, market is something to be developed. Once tapped, the business potential of these countries will one day become real business opportunities.In what different ways are GDP and per capita income significant in assessing the potential of a particular market?4. Total GDP indicates the overall size of an economy which is important in market assessment for durable equipment or bulk goods such as grain, steel, or cement. Per capita GDP reveals the average income level of consumers, which is important when marketing consumer durables.Was china a low-income country a few years ago? How about now?5. 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.What does the term “Traid” refer to? What is meant ty Quad?6. 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.Some people extend the scope of Triad to include Canada and name the broadened grouping Quad.How much do you know about OECD? Please make a brief account.7. OECD means Organization of Economic Cooperation and Development was established in 1961 by the major capitalim countries with the headquarter in Paris. It has 29 member countries, among which, 23 of them are high-income countries and the others are middle-income countries.What is the best policy for China to develop business opportunites?8. The best policy is to develop business opportunities wherever advantageous while keeping in mind the key markets. Tap: to take what is needed form, to exploitPPP: purchasint power parityConsumerism: considerable desire to make purchase for consumptionRecipient: a person or an organization etc. that receives somethingPruchasing power: of persons, the public, having the money to buy goods and servicesAverage: of an ordinary, common or usual kind in quality or amountSpur: to urge or encourageProductive: producing in high efficiency or in large quantityAssess: to judge an amount or valueInfrastructure: large-scale public services, such as water and power supplies, road, rail and radio communications, etc. needed to support economic activity, esp. industry, trade and commerce三、1. What is a free trade area? Make a brief account of the most notable free trade area in the world.Members of a free trade area removes barries to the flow of goods and services smong themselves while each member still adopts its own policy as regards to trade with outsiders.The most notable free trade area is the North American Free Trade Agreement (NAFTA), the largest free market formed by the United States.2. In what way is a customs union different from a free trade area?Customs Union that 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.3. What are the characteristics of a comon market? Which organization remained a common market for some years in the past?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?Economic union 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 member countries of an economic union are required to surrender some of their national sovereignty.5. Make a brief account of the origin and development of the EU.Its history dates back to the early post-war years. 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 the European Atomic Energy Community (EURATOM). 1992 was a landmark year in the development of the EC when it became a true common market as envisaged by the Single Eropean Act. Then on January 1, 1994 the European Union (EU) came into being on the strength of the Maastricht Treaty.6. What is the most powerful institution of the EU? What is the executive body of the EU? How does it operate?The most Powerful institution of the EU is the Council of Ministers. It has the final say on all important matters. Decisions of the council are made by votes allocated to member countries on the basis of their size. Different ministers attend the council meetings depending on the matters discussed.Its executive body is the European Commision composed of 20commissioners overseeing 23 departments in charge of different affairs.7. Explain briefly the five layer organizational structure of Asia-Pacific Economic Cooperation.1)The first is the Informal Meeting of Economic leaders held annually.2)The second is the Dual-Ministerial Meeting attended by foreign ministers (excluding Chinese Taipei and Hong Kong) and ministers in charge of foreign trade.3)The third is the Meeting for Ministers Responsible for Trade.4)The fourth is the Senior Officials Meeting (SOM) attended by vice ministers, departmental directors or ambassadors to implement decisions by economic leaders and ministerial meetings.5)The fifth layer refers to the four subordinate committees under SOM, i.e. Committee of Trade and Investment, Economic Committee, Economic and Technical Cooperation Subcommittee of SOM and Budget Management Committee.8. What are the tenet and objectives of APEC? What is meant by its two wheels?APEC-Asia-Pacific Economic Co-operation, its tenet and objectives are “inter-dependence, mutual benefits, adhering to an open and multilateral trading system and reduction of regional trade barriers”.APEC co- operation concentrates on trade and investment liberation and facilitation (TILF) and economic and technical cooperation (ECOTECH) that are commonly termed as “the two wheels of Apec”.9. What are the nature and objectives of OPEC?The nature of OPEC is a commodity cartel. By assigning production quotas among its members, OPEC tried to limit the overall crude oil supply of the world for the purpose of maintaining higher oil prices. Veto: right to reject or forbid something Detour: route that avoids a blocked road, deviationErode: wear away, eat intoIntegration: combing into a wholeLiberalization: of trade, the act of government in lifting controls overimports and exportsTariff: tax levied by the customsEnvisage: picture (an event, action, etc) in the mind as a future possibility; imagineBanknote: printed paper money issued by a bank, usu. The countrys central bankMobility: capacity that can move or be moved easily and quickly from place to placeBarrier to trade: any action by a government to limit or prevent the free flow of goods in and out of its country四、1. What are the basic feature and major role of economic globalization?With the basic feature of free flow of comodity, capital, technology, service, and information in the global context for optimized allocation, economic globalization giving new impetus and providing opportunities to world economic development and meanwhile making the various economies more and more interdependent and interactive. It has become an objective trend in world economic development.2. Mention some of the pros and cons of economic globalization. What is the right attitude toward it?Economic integration enables countries benefit from the boom of other countries but also makes them more vulnerable to the adverse events across the globe.The best policy for us is to follow the trend closely, availing the opportunities it offers to develop ourselves and avoiding its poosible impacts.3. What is the formal definition of a multinational enterprise? How can you tell whether a multinational corporation is aparent or just an affiliate?A typical multinational enterprise shall be defined as a business organization which owns (whether wholy 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.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. enormous sizeb. wide geographical spreadc. longevity and rapid growth5. What is the ecommonly recognized objective of MNEs?Like most business organizations, MNEs are formed for profit.6. Why is security so important to MNEs?Profit is useless if it cannot be secured by the MNE and transfeeed 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. enables them have a wide range of options in terms of decisions in areas such as sourcing and pricing.b. More able to take advantage of changes in the international economic environment.c. Enable MNEs to engage in worldwide integrated production and marketing giving rise to extensive intra-MNE transactions which constitute a very significant proportion of total international trade.8. What is the relationship between MNEs and their host countries?Host governments can and do wield power over MNCs located within their territories. MNCs are under the legal jurisdiction of their host governments which 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. multi-domestic corporation that is a group of relatively independent subsidiaries.b. Global corporations which operates under an opposite principle from the first type and views the world market as an integrated whole.10. Are there many world companies at present? Imagine their future role in complete globalization?No, very few companies, if any, have reached this level of internationalization.When such companies become dominating, the possiblility of conflicts among sovereign states may be greatly reduced. Possibly they will be instrumental to the realization of complete globalization. Revenue: the total annual income of a state Decentralize: distribute the administrative powers over a less concentrated areaNationalize: to bring under the control or ownership of a nationInput: something that is put in business operationWelfare: well-beingFramework: organization structureFacilities: something designed, built or installed to serve a specific function or perform a particular serviceAffiliate: a subsidiary company controlled by anotherWorld company: a multinational whose national identity has been blurredAssets: total resources of a business, as cash, accounts receivable, real estates etc.五、1. How would you define international trade?International trade can be defined as the exchange of godds and services produced in one country with those produced in another.2. Why did international trade first begin?In the complex economic world, no country can be completely self-sufficient. The distribution of
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