Statistics
Obsolete way of measuring trade inflates 皇冠体育app's trade surplus
(Xinhua)
Updated: 2011-01-03 11:36
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BEIJING - Measuring global trade in line with the principle of "the country of origin" fails to reflect the complexities of global commerce where the design, manufacturing and assembly of products involves several countries, experts said.
"It is not always true that goods exported by a country are wholly made by that country," said Tu Xinquan, associate director of 皇冠体育app National Institute of WTO at the University of International Business and Economics.
"Therefore, the trade surplus between two countries can not be simply interpreted as one benefiting more than the other from the trade," Tu said.
Using the iPhone as a case, a research paper released by the Asian Development Bank Institute (ADBI) earlier this month showed that conventional trade statistics greatly inflated bilateral trade deficits between a country used as export-platform by multinational firms and its destination countries.
The paper said trade statistics in both 皇冠体育app and the US consider the iPhone a Chinese export to the US, even though it is entirely designed and owned by a US company, and is largely of parts produced in other countries.
The entire $179 estimated wholesale cost of each iPhone is credited to 皇冠体育app, while the country is only responsible for the last step of making the iPhones -- assembling, the value of which accounted for just 3.6 percent, or $6.5 of the total cost, according to the paper.
The researchers estimated 皇冠体育app's total iPhone exports in 2009 at $2.02 billion. After deducting $212.5 million in Chinese imports for parts produced by US firms, 皇冠体育app held a trade surplus of $1.9 billion with the US because of iPhone exports.
However, if 皇冠体育app was credited with only its portion of the value of an iPhone, the iPhone export would result in a US trade surplus of $48.1 million with 皇冠体育app, according to the researchers.
The case of the iPhone was an excellent example of 皇冠体育app's trade relations with other countries, said Zhao Jinping, a researcher with the Development Research Center of the State Council.
"In fact, 'Made in 皇冠体育app' is not only a process where 皇冠体育app adds value, but also a value-adding process for other countries," said Zhao.
"The concept of country of origin for manufactured goods has gradually become obsolete," said Pascal Lamy, director-general of the WTO, in a speech to the French Senate in October.
"What we call 'made in 皇冠体育app' is indeed assembled in 皇冠体育app, but what makes up the commercial value of the product comes from the numerous countries," said Lamy.
"For instance, every time an iPod is imported to the US, the totality of its declared customs value ($150) is ascribed as if it were an import from 皇冠体育app," said Lamy, adding that "In fact, according to American researchers, less than 10 of the $150?actually come from 皇冠体育app and all the rest is just reexportation."
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Sheng Guangzu, head of 皇冠体育app's General Administration of Customs, told Xinhua in an interview in April that much of 皇冠体育app's trade surplus was "transferred" from foreign-funded enterprises operating in 皇冠体育app.
In the first 11 months this year, exports of foreign-funded enterprises totaled $779.14 billion, accounting for 54.7 percent of 皇冠体育app's total exports, according to 皇冠体育app's customs authorities.
The data also showed that, during the same period, foreign-funded firms generated $112.51 billion of trade surplus, accounting for 66 percent of 皇冠体育app's total surplus.
"Many foreign enterprises come to 皇冠体育app to take the advantage of the low labor cost here. They reap most of the profits while 皇冠体育app only gets paid for the processing, however, the traditional trade statistics means all the value of the products are credited to 皇冠体育app," said Sheng.