Relationship between countries
| English | Chinese | Pinyin |
|---|---|---|
| aid | 援助 | yuán zhù |
| debt | 债务 | zhài wù |
| dependence | 依赖 | yī lài |
| foreign direct investment | 外国直接投资 | wài guó zhí jiē tóu zī |
| multinationals | 跨国公司 | kuà guó gōng sī |
| tied aid | 附带条件援助 | fù dài tiáo jiàn yuán zhù |
How countries help — and hinder — each other
- No economy develops alone. Trade, aid 援助, debt 债务 and foreign investment all link rich and poor countries, for better and worse.
- These relationships can speed development — or entrench dependence 依赖.
Economics case lab
Classify real examples by the economic idea they show.
Foreign direct investment by multinationals can bring a developing country:
FDI brings capital, employment and know-how — though profits may flow abroad.
Trade and investment
- Trade lets developing countries specialise and earn foreign exchange — but reliance on a few primary exports is risky.
- Foreign direct investment 外国直接投资 (FDI) by multinationals 跨国公司 brings capital, jobs and technology — but profits may flow abroad and bargaining power is uneven.
Countries trade, invest and lend across borders — global trade through a container port
A drawback of aid is that it can:
Aid can foster dependence and may be "tied" to the donor's interests.
High debt repayments can divert a developing country's money away from health and education.
Servicing large debts crowds out spending on development priorities.
Aid that must be spent on the donor's own goods is called ______ aid.
Tied aid benefits the donor and limits the recipient's choice.
Aid and debt
- Aid (grants and loans) can fund investment and relief — but can create dependence or come with strings attached.
- Debt can finance development, but high repayments can trap a country, diverting money from health and education.
Tied aid 附带条件援助. Aid that must be spent on the donor's goods/services ("tied aid") helps the donor's firms and limits the recipient's choice — less effective than untied aid.
Match each relationship to a benefit or risk.
Each link is double-edged depending on its terms.
The balance
- These relationships are double-edged: trade, FDI, aid and borrowing can all accelerate development or deepen dependence, depending on the terms.
You've got it
- trade and FDI (multinationals) bring exchange, capital, jobs and tech — but with risks
- aid can fund development but risks dependence; debt can finance or trap a country
- each relationship is double-edged — the terms decide whether it helps or hinders