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