How the iPhone Widens the United States Trade Deficit with the People's Republic of China
Xing, Yuqing; Detert, Neal | December 2010
Abstract
In this paper, we use the iPhone as a case to show that even high-tech products invented by United States (US) companies will not increase US exports, but on the contrary exacerbate the US trade deficit. The iPhone contributed US$1.9 billion to the US trade deficit with the People’s Republic of China (PRC). Unprecedented globalization, well organized global production networks, repaid development of cross-country production fragmentation, and low transportation costs all contributed to rational firms such as Apple making business decisions that contributed directly to the US trade deficit. Global production networks and highly specialized production processes apparently reverse trade patterns: developing countries such as the PRC export high-tech goods—like the iPhone—while industrialized countries such as the US import the high-tech goods they themselves invented. In addition, conventional trade statistics greatly inflate bilateral trade deficits between a country used as export-platform by multinational firms and its destination countries.
Citation
Xing, Yuqing; Detert, Neal. 2010. How the iPhone Widens the United States Trade Deficit with the People's Republic of China. © Asian Development Bank. http://hdl.handle.net/11540/3845. License: CC BY 3.0 IGO.Keywords
Electronics Industry
Computer Industry
Vocational Education
Technical Education
Technological institutes
Employment
Information Media
Mass Media
Export Oriented Industries
Electronics
Computers
Telecommunications Industry
Manufacturing Industries
Microprocessors
Electronic Equipment
Communication Industry
Microelectronics industry
Electronic industries
Digital electronics
Microelectronics
Podcasts
Music videos
Internet videos
Interactive videos
Videos
Video recordings
TV
Mobile communication systems
Sound recordings
Motion pictures
Automation
Educational innovations
Technical institutes
Engineering schools
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