The trade war between China and the United States continued to heat up. Under the constant provocation by the United States, China also gave a strong blow back.
In fact, there was a lot of controversy at the beginning of this round of trade wars. For example, according to US statistics, in 2017, the US-China trade deficit amounted to US$375.2 billion, accounting for 47% of the total Sino-U.S. trade in goods; General Administration of Customs statistics, this figure is 275.8 billion U.S. dollars;
What is the main source of this statistical difference?
For example, Apple's mobile phone is assembled in China. Actually, China only receives very little processing and other value. The rest are obtained by American designers and parts suppliers such as Korea and Japan.
In other words, the U.S. trade deficit can be broken down into U.S. trade deficits with countries such as Japan and South Korea. If this part is removed, U.S. trade deficit with China on Apple's mobile phones will be greatly reduced.
For a long time, in the low-end position of the global value chain, despite the fact that China’s “world factory” has limited profit, the book value has increased greatly. According to Chinese statistics, in 2017, 61% of China’s trade surplus in merchandise came from processing trade. The report of the Chinese Academy of Sciences shows that the trade surplus between China and the United States, measured by value added, is 44.4% lower than the China-U.S. trade surplus measured by gross value statistics.
The data from the National Bureau of Statistics also confirms this view.
The data shows that in 2016, China's Top 10 in the top 100 US export companies are: Hongfujin Precision Electronics (Zhengzhou) Co., Ltd., Dagong (Shanghai) Computer Co., Ltd., Changshuo Technology (Shanghai) Co., Ltd., Computer (Suzhou) Co., Ltd., Compal Information Technology (Kunshan) Co., Ltd., Hong Fu Jin Precision Electronics (Chengdu) Co., Ltd., Da Feng (Chongqing) Computer Co., Ltd., Flextronics Manufacturing (Zhuhai) Co., Ltd., Da Feng (Shanghai) Computer Co., Ltd., Dell (Chengdu) Co., Ltd.
Many of these companies’ businesses manufacture OEM mobile phones, tablet PCs, and notebook PCs for consumer electronics products. Among them, many of the accessories are from South Korea, Japan, Taiwan, USA, and European companies. Chinese companies really get value from it. Very little, but it contributes a lot to the export volume.
Some analysts pointed out that if the trade war between China and the United States escalates and spreads to consumer electronics, it will have an impact on South Korea, Japan, Europe, and the United States itself.
Take South Korea as an example. On April 4th, Hyundai Group’s Center for Economic Research released a report saying that South Korea may suffer enormous collateral damage in Sino-US trade confrontation. In the future, if China’s exports to the United States are reduced by 1 buck, South Korea Exports to China will decrease by 0.5 yuan.
China is South Korea’s largest trading partner, and South Korea is also the country with the world’s largest trade surplus with China. However, the vast majority of Korean exports to China are intermediate products, many of which are sold to the United States after reprocessing by China.
In other words, the U.S. trade to China is 'big stick', and many times it hits the younger brother of South Korea.