December 16, 2010

Chinese Iphone Made in America

The economy in China likes to lay claim to many things that are just not there's one such thing is the economic benefits of laying claim to exports. China claims exports that are produced and exported in the final stage of production as part of their GDP. Is the claiming of items only produced and exported as part of their GDP, an honest look at the real GDP of China? No the actual GDP of China should reflect the percentage of the final price of the export added to it. Things will not change though the unseen adjustment to the GDP of China's other contributors to their GDP are left in the dust. For example the Iphone is conceived in the United States 6%, and account for the aforementioned labor and components of the device. Other countries such as Japan, Germany, South Korea and other account for 34% ,17% ,13% and 27% of the production while China accounts for only 3.6% all numbers are rounded and for use of approximation as minute changes are possible in margin of error. With China only accounting for 3.6% of the product how are they able to add it to there GDP, answer, by the current standard of who exports the products is how. If we were to only allow the use of those items who are solely produced to be accounted for this would not be evenly distributed. It should be taken into account the percentage of the product produced in the process and where to be accounted in the country of said work to be included in the correct country for use in GDP determination. China does lay claim though to many products which help its GDP look better than the actual real GDP should be realized. Changing the way it is seen though is a political battle as we are in debt to China seems the United States does not seem it is necessary to act upon these discrepances in real GDP. The debt we owe to China seems to have an adverse affect on our economic outlook but things could always be worse right?

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