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Unit 4 Modes of foreign trade Written by Shugang li Teaching objectives Learn modes of foreign trade especially processing, assembling and compensation trade Practice listening for specific information; Practice communicating with business partners for processing, assembling and compensation trade. Introduction to Modes of Foreign Trade There are various modes of foreign trade in in international trade, namely, processing, assembling and compensation trade etc, which are commonly used in reality. Processing and assembling trade Processing and assembling trade are both methods commonly used to promote foreign trade with the help of foreign funds. Domestic enterprises are supplied with raw materials and parts or components by foreign clients abroad and finshed products would be exported to those clients, for this domestic enterprises receive fees. There is no transfer of the ownership of such things, and no transfer of risk either. Domestic enterprises can also keep in touch with changes in the world market and learn advanced technology and scientific management. Compensation Trade compensation trade is a form of countertrade, where any combination of goods or services are bartered and exporters of heavy equipment, technology, or even entire facilities agree to purchase a certain percentage of the new facility once it is in production. It is on basis of credit,namely,the value of the buyback products or services will pay the value and interest of the imported equipment by installments. Presentation for processing and assembling and compensation trade Case study and ask the SS to make dialogues on acceptance and order on basis of their individual cases and present their dialogues and comment on their performance Case 1 processing and assembling As the representative of ABC company, you are dispatched to China for negotiating with the general manager of Hefei Electronics Company on the details of processing and assembling agreemen
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