Measuring global trade by a product's country of origin fails to reflect the complexities of global commerce where the design, manufacturing and assembly of products involve several countries, experts said.
"It is not always true that goods exported by a country are wholly made by that country," said Tu Xinquan, an associate director with the China National Institute of WTO.
"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 an example, a research paper released by the Asian Development Bank Institute 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 China 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 made from parts produced in other countries.
The entire $179 estimated wholesale cost of each iPhone is credited to China, while the country is only responsible for the last step of making the iPhones - assembly, the value of which accounted for just 3.6 percent, or $6.5 of the total cost, according to the paper.
The researchers estimated China's total iPhone exports in 2009 at $2.02 billion.
After deducting $212.5 million in Chinese imports for parts produced by US firms, China held a trade surplus of $1.9 billion with the US because of iPhone exports.
However, if China 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 China.
"The concept of country of origin for manufactured goods has gradually become obso-lete," said Pascal Lamy, director-general of the WTO, in an October speech.
"It is not always true that goods exported by a country are wholly made by that country," said Tu Xinquan, an associate director with the China National Institute of WTO.
"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 an example, a research paper released by the Asian Development Bank Institute 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 China 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 made from parts produced in other countries.
The entire $179 estimated wholesale cost of each iPhone is credited to China, while the country is only responsible for the last step of making the iPhones - assembly, the value of which accounted for just 3.6 percent, or $6.5 of the total cost, according to the paper.
The researchers estimated China's total iPhone exports in 2009 at $2.02 billion.
After deducting $212.5 million in Chinese imports for parts produced by US firms, China held a trade surplus of $1.9 billion with the US because of iPhone exports.
However, if China 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 China.
"The concept of country of origin for manufactured goods has gradually become obso-lete," said Pascal Lamy, director-general of the WTO, in an October speech.
