compensation trade

noun

A form of countertrade in which an investor is paid back by a share of the proceeds or results generated by the goods and services that the investor provided.

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Meanings

nouncompensation trade (uncountable)
  1. uncountableA form of countertrade in which an investor is paid back by a share of the proceeds or results generated by the goods and services that the investor provided.

    Why did E-S Pacific choose the joint-venture formula over compensation trade?

    2014, Rosalie L. Tung, U.S.-China Trade Negotiations, →ISBN
    3 more examples

    Among the most important of these were export processing and compensation trade.

    1993, Nicholas R. Lardy, Foreign Trade and Economic Reform in China, →ISBN, page 41

    But in the case of one category of investment, direct compensation trade (p. 137), the investment takes the form of productive capital, i.e. machinery and equipment.

    1997, François Soulard, The Restructuring of Hong Kong Industries and the Urbanization of Zhujiang Delta, 1979-1989, →ISBN

    Incentives for using compensation trade include tax advantages, flexibility in structuring the agreement, and no involvement for the foreign party in labour issues.

    2006, Jonathan Reuvid, Li Yong, Doing Business with China, →ISBN, page 140
Cite this entry
APA

compensation trade. (n.d.). In WatkinsX Dictionary. Retrieved November 4, 2026, from https://dictionary.watkinsx.com/word/compensation%20trade

MLA

“compensation trade.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/compensation%20trade. Accessed November 4, 2026.

Chicago

WatkinsX Dictionary, s.v. “compensation trade,” accessed November 4, 2026, https://dictionary.watkinsx.com/word/compensation%20trade.

Source: compensation trade on Wiktionary, CC BY-SA 4.0.