Hidden in the exaggerated trade deficit in the iPhone

Source: China News Weekly

Author: Xing Yuqing

The important factor in the imbalance of Sino -US trade is that the world trade has entered the era of global value chain.However, if you still use statistical data based on the traditional trading of cotton -based wine -changing wine, to measure and analyze the balance of trade between China and the United States, the error calculation results will be obtained.

In 2010, I took the first generation of Apple mobile phones as an example, indicating that the imbalance between Sino -US trade was exaggerated.Different trade statistics caused by the differences between the coast prices.I suggest that in the era of trade based on the global value chain, the added value of a country's contribution to export products should be used, not the total exports to evaluate the bilateral trade balance, especially the Sino -US trade balance.

Today, 10 years later, we take Apple's iPhone X as an example to review this issue again.The iPhone X is not only more advanced than the first generation in terms of technology. Its retail prices of more than $ 1,000 have also brought Apple mobile phones into luxury goods.However, the only thing that has not changed is that China is still a base for assembling Apple mobile phones. All mobile phones sold in the US market are assembled in China and exported to the United States.In 2009, China exported about 11.4 million iPhone to the United States. In 2017, China exported about 42 million to the United States.The popularity of Apple mobile phones in the United States and its technologies have further exaggerated the imbalance of Sino -US trade.

According to my research, the manufacturing cost of an iPhone X was $ 409.25.Except for Foxconn, about 10 Chinese companies participated in the manufacturing of the iPhone X.The value of components, assemblies and other services provided by these companies in the process of manufacturing iPhone X is $ 104, which is about 25.4%of the all -manufacturing cost of iPhone X.This means that every iPhone X sells Apple in the global market, and contributes $ 104 to the Chinese economy.

Apple mobile phone is the best interpretation of American historian Neil Middot; Ferguson's concept of the United States.Considering that Apple mobile phones have sold 220 million units around the world a year, Apple mobile phones, this American high -tech company's products have contributed huge to the Chinese economy.

According to the current statistical method, every iPhone X exported to the United States means that it exported $ 409.25 of goods to the United States.Considering that the iPhone X uses US $ 76.5 for US parts, a trade deficit of US $ 332.75 (409.25-76.5) was imported from China.However, of the $ 332.75 deficit, only 104 US dollars native to China, and the remaining $ 228.75 actually came from South Korea, Japan, and other countries that provided components other than the United States.

Therefore, according to traditional trade statistics, an iPhone X exaggerated US $ 228.75 artificially exaggerated the US trade deficit with China.The United States imports tens of millions of Apple mobile phones from China each year. According to my estimates, in 2018, the iPhone only exaggerated the US trade deficit of China 9.65 billion U.S. dollars, which is equivalent to the 2.3 of the US cargo trade deficit in China.%.However, in 2009, the first -generation iPhone phone only exaggerated the US trade deficit to China $ 1.83 billion, and less than 1%of the US cargo trade deficit of China.

China exports an iPhone X to the United States, and the trade data records are $ 409.25 imported from China from China, but there is no corresponding payment from the United States into China.Foxconn's components produced by the United States, Japan, South Korea and other countries used by Foxconn are purchased and paid directly from these companies.Therefore, from the perspective of bilateral payment, every iPhone X exported to the United States for each export to the United States, only $ 104 instead of $ 409.25 to flow into China.

From the perspective of bilateral payment alone, the current trade statistics have seriously distorted the imbalance of bilateral payment caused by the imbalance of Sino -US trade.The measurement of Sino -US trade imbalance is the right choice based on the calculation of added value.

The reduction of the US trade deficit with the United States is a major demand for Sino -US trade negotiations in the United States. However, according to the requirements of the wrong trade data, it is not realistic and it is difficult for China to reach.