officials, who rarely have a chance to visit overseas, often prefer 1 See http:// www. transparency. org for more details about its 2010 index. cat29974 _ case2 _ 01-031. indd 18 foreign travel to cash or gifts.( This was especially true when few PRC officials had been abroad.) As a result, traders report that dangling foreign trips in front of their PRC clients has become a regular part of negotiating large trade deals that involve products with a technological component. ― Foreign travel is always the first inducement we offer,‖ said an executive involved in machinery trade. In most cases, traders build these costs into the product’ s sale price. Some trips are ― reasonable and bona fide expenditures directly related to the promotion, demonstration, or explanation of products and services, or the execution of a contract with a foreign government agency,‖ but it may be another matter when officials on foreign junkets are offered large per diems and aren’ t invited specifically to gain technical knowledge. Foreign travel isn’ t always an inducement— it also can be extorted. In one case, a PRC bank branch refused to issue a letter of credit for a machinery import deal. The Chinese customer suggested that the foreign trader invite the bank official on an overseas inspection tour. Once the invitation was extended, the bank issued the letter of credit. ANGLING FOR CASH Some MNCs are asked to sponsor overseas education for the children of trading officials. One person told a Chinese source that an MNC paid for that individual’ s U. S. $ 1,500-a-month apartment, as well as a car, university education, and expenses. Firms find direct requests for cash payments— undeniably illegal— the most difficult. One well-placed source said that a major trader, eager for buyers in the face of an international market glut, had fallen into regularly paying large kickbacks into the Honduran, U. S., and Swiss accounts of officials at a PRC foreign trade corporation. Refusing to make payments may not only hurt sales, it can also be terrifying. A U. S. firm was one of several bidders for a large sale; a Chinese official