China’s trade surplus with US inflated by trade stats: OECD-WTO
PARIS (AFP) – Current trade statistics miss a vital part of the story of where production occurs in the globalised economy, the OECD and WTO said on Wednesday, adding that China’s trade surplus with the United States was overstated by a quarter.
The Organisation for Economic Cooperation and Development and the World Trade Organisation unveiled a new database that seeks to measure the value-added in trade.
With manufacturing highly dependent on imports of raw and intermediate materials, the OECD-WTO database sought to reveal where value was being added throughout global trade.
It found that measured by value-added that China’s bilateral trade surplus with the United States was over $40 billion (25 per cent) smaller in 2009, and 30 per cent smaller in 2005.
It said this reflected value attributable to goods China imported from the United States and Asian suppliers that China processed and ultimately sent the United States.
The OECD-WTO initiative also found that services were greatly underestimated in traditional trade statistics.
While services account for about two-thirds of output in developed economies, traditional statistics put their share in trade at less than one quarter, while on a value-added basis it rises to over 50 per cent of exports for countries such as the United States, Britain and Germany.
With production chains becoming increasingly globalised, the OECD and WTO cautioned that “traditional measures of trade…, alone, may lead to misguided to misguided decisions being taken” in trade policy.