2 percent of the overall value of china s gross

  • No School
  • AA 1
  • 47

This preview shows page 9 - 11 out of 47 pages.

estimated that in 2011, 32.2 percent of the overall value of China s gross exports was comprised of foreign imports. This level increased to 40.2 percent for China s total manufactured exports. For electrical and optical equipment, it was 53.8 percent. The study estimated that if bilateral trade imbalances were measured according to the value of trade that occurred domestically in each country, the US trade deficit in goods and services with China in 2011 would decline by 35 percent (from $278.6 billion to $181.1 billion). This is largely because of the role of trade in intermediate goods (parts and materials imported to make products). The World Bank estimates that US intermediate exports and imports to and from China in 2016 were $19.3 billion and $33.5 billion, respectively. Thus, many Chinese products contain US - made inputs and some US products contain Chinese made inputs.
Image of page 9

Subscribe to view the full document.

US - CHINA Trade War: Analyses of Deeper Nuances and Wider Implications 10 According to Apple Corporation, it utilised over 200 corporate suppliers with nearly 900 facilities located around the world. The top five largest country sources of these facilities in 2017 were China (358), Japan (137), the US (64), Taiwan (55), and South Korea (34). Some US corporate suppliers to Apple have facilities located in many countries. For example, Intel Corporation has 10 facili- ties that supply products to Apple, three of which are located in the US, two in China, two in Malaysia, and one each in Ireland, and Israel, Malaysia, and Vietnam. Apple iPhones are mainly assembled in China by Taiwanese companies (Foxconn and Pegatron) using a number of intermediate goods imported from abroad (or in many cases, intermediates made by foreign firms in China). Many analysts have estimated that the value - added that occurs in China in the production of the i - Phone is small relative to the total value of the product because it mainly involves assembling foreign made or foreign owned components. Apple Corpora- tion, on the other hand, is thought to be the single largest beneficiary (in terms of gross profit) on the sale of the i - Phone. However, conventional trade data does not accurately attribute the value - added that occurs in each stage of making the i - Phone. When the US imports i - Phones from China, US trade data attributes nearly the full value of the product as originating in China, which, some argue artificially inflates the size of the US trade deficit with China. One 2010 study estimated that in 2009, China exported 11.3 million i - Phones to the US, with a shipping price of $179 per unit and total export value at $2.0 billion. The study estimated that 96.4 percent of the value of the i - Phone was attributed to foreign suppliers and produc- ers of components and parts, including the US (at $122 million). Standard trade data would put China s trade surplus in i - Phone trade with the US at $1.9 billion, but that level would fall to $73.5 million if that trade was measured according to the value - added that occurred in each country. Several analysts have concluded that Apple s innovation in developing and engineering its products, along with its
Image of page 10
Image of page 11
  • Fall '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes