Trade Stats Rarely Tell the True Story

A great article by Andrew Batson in the Wall Street Journal shows how trade stats are often misleading. The article “Not Really ‘Made in China’: The iPhone’s Complex Supply Chain Highlights Problems With Trade Statistics” illustrates how the entire value of the iphone is considered by present stats as part of the U.S. trade deficit with China, however, in value-added terms less than 4% of the value of the product is actually attributed to China, while 34% should be attributed to Japan; 17% to Germany; and 13% to South Korea. The articles quotes the director-general of the WTO: What we call “Made in China’ is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries,” Pascal Lamy, the director-general of the World Trade Organization, said in a speech in October. “The concept of country of origin for manufactured goods has gradually

Continue reading

Chinese Aren’t Coming

Korea Times (July 23, 2010) By Sean Hayes Willie Sutton, the famous 1940s bank robber, was attributed with answering a reporter’s questions concerning why he robs banks with: “that is where the money is.” The Japanese, knowing that China is where the money is, loves China ― why don’t the Koreans? The Chinese knowing that Japan is developing a vibrant “Chapanese” economy love Japan ― why don’t the Chinese love Korea? Overwhelmingly, Korean employees and shareholders believe that the Chinese will enter the market to steal technology, lay off workers, and abuse their dominant world power. Chinese investors are not dumb; they know this perception by the Koreans. China only accounts for 1.4 percent of the total foreign direct investment (FDI) in Korea, according to government data. While, China accounts for 11.1 percent of Japanese FDI with only the U.K., Canada, Germany and the United States surpassing Chinese investment in

Continue reading