In today’s Daily News Egypt Alec van Gelder and Daniel Ikenson report how China’s increasing export share is good news for everyone else.

Contrary to the rhetoric of the sinophobes, China relies on imports to feed its growing export businesses. But due to trade accounting much of the value-added that occurs elsewhere is fully incorporated into the total value of “exports”, even if only a small fraction of the value-added at the end of the production line actually takes place in China.

“A recent study by economists at the University of California concludes that the Chinese value-added embedded in a 30G Apple iPod accounts for only US$4 of the total $150 cost, yet the entire US$150 is chalked up as a Chinese export. Other recent studies estimate overall Chinese value-added in all products exported from China to average somewhere between 35 and 50%, a big proportion but a lot less than gross export figures imply.”

Many of the cost efficiencies China is able to benefit from derive from their consistent liberalisation over the past twenty five years.  This has ensured China’s massive population – and increasingly its higher value-added companies – are the final node in complicated production and supply chains that span many companies in many different countries.  And thus, by heeding the calls of the protectionists and legislating against trade from China, the U.S. and Europe would really be punishing themselves and rest of the world.

Read the full article here: