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Global Value Chains and Trade in Value-Added

In: Economic Crisis and Rule Reconstruction

Author

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  • Chen Deming

Abstract

In the 1980s and 1990s, Chinese households were excited to have an imported TV or refrigerator. The terms “made in Japan” or “made in Germany” were a rarity in our lives and a symbol of quality. Today, when we get a new iPhone, it is difficult to say exactly which country it has been manufactured in. On the back of the phone, it is printed “Design by Apple in California; Assembled in China”. It is hard to determine the origin of the phone although Apple is an authentic American company. According to statistics, the wholesale price of an iPhone 3G is USD178 but China gets only 3.6% of that amount. When the iPhone is assembled in the Foxconn factory in mainland China, and shipped from China to the US, the entire price of USD178 is included in China's export volume. The US, where the iPhone design was invented, has ironically become the importing country.

Suggested Citation

  • Chen Deming, 2016. "Global Value Chains and Trade in Value-Added," World Scientific Book Chapters, in: Economic Crisis and Rule Reconstruction, chapter 8, pages 249-284, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814740951_0008
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