Trade in Value-AddedEast Asian Perspective■

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Satoshi InomataIDE-JETRO

２００９年のiPhone

小売価格

＝＄５００（Apple利益率64%）

＄３３１＄７

＄１６２

International value distribution of iPhone

Retail price of iPhone in 2009

= $500(64% margin for

the Apple)

Cost structure of parts for iPhone3GManufacturer Components Unit PriceToshiba (Japan) Flash Memory US$24.00

Display Module US$19.25Touch Screen US$16.00

Samsung (Korea) Application Processor US$14.46SDRAM-Mobile DDR US$8.50

Infineon (Germany) Baseband US$13.00Camera Module US$9.55RF Transceiver US$2.80GPS Receiver US$2.25Power IC RF Function US$1.25

Broadcom (US) Bluetooth/FM/WLAN US$5.95Numonyx (US) Memory MCP US$3.65Murata (Japan) FEM US$1.35Dialog Semiconductor(Germany)

Power IC Application ProcessorFunction

US$1.30

Cirrus Logic (US) Audio Codec US$1.15Others US$48.00

Product design

Assem

bly

Distribution

Marketing

Custom

er services

Material procurem

ent

R &

D

Parts procurement

Value-added

Productionprocess

Productdesign

Assem

bly

Distribution

Marketing

Custom

erservices

Material

procurement

R &

D

Partsprocurem

ent

２００９年のiPhone

小売価格

＝＄５００（Apple利益率64%）

＄３３１＄７

＄１６２

International value distribution of iPhone

Retail price of iPhone in 2009

= $500(64% margin for

the Apple)

The US trade deficits with China（1991＝100）

Traditional measurement Value-added measurement

2009 US trade balance in iPhones(million US$)

World

Of which:

ChinaJapan

KoreaGermany

Rest of World

Value-addedTrade in goods and services

Agri & Manu- Service Cons- Invest Export Import TotalMining fact'ing umption -ment Output

Agri & Mining ８００ １８００ ２００ ６００ ４００ ３００ -１００ ４０００

Manufacturing１６００ ６００ ５００ ０ ３５０ ２００ -２５０ ３０００

Service ４００ ３００ ９００ ３５０ ５０ ０ ０ ２０００

Wages ８００ ２００ ２５０

Profits ２５０ ５０ １００

Depreciation １００ ３０ ４０

Taxes ５０ ２０ １０

Total Input ４０００ ３０００ ２０００

Inte

rmed

iate

Tran

sact

ion

Valu

e A

dded

Intermediate Transaction Final Demand

Input-Output Table (3 sectors)

Agri & Manu- ServiceMining fact'ing

Agri & Mining ８００ １８００ ２００

Manufacturing１６００ ６００ ５００

Service ４００ ３００ ９００

Total Output ４０００ ３０００ ２０００

Agri & Manu- ServiceMining fact'ing

Agri & Mining ８００ １８００ ２００

Manufacturing１６００ ６００ ５００

Service ４００ ３００ ９００

Total Output ４０００ ３０００ ２０００

Automobiles(Y10 billion)

(Y260 m

Cold-finis(Y60 m

Steel s(Y20 m

Pa(Y17 m

Compos(Y30 m

Carbo(Y10 m

Silk and ra(Y10 m

Car chassis(Y650 million)

Tires and inner tubes

Glass products(Y130 million)

Internal-combustionengines

(Y1.52 billion)

InitialImpact

1st-roundImpacts

Value-added

Value-added

Value-addedValue-

added

Value-added

Value-added

Value-addedValue-addedValue-addedValue-added

Value-addedValue-addedValue-added

Value-added

Value-addedValue-addedValue-addedValue-added

Value-addedValue-addedValue-added

Value-added

Value-addedValue-addedValue-addedValue-added

Value-addedValue-addedValue-addedValue-added

Production spillover(car industry)

Main Data

The Asian International Input-Output Table,constructed by

Institute of Developing Economies JETRO

Reference years: 1985, 1990, 1995, 2000, 2005 (preliminary)

Country coverage: China, Japan, Korea, Taiwan, Singapore, Malaysia, Thailand, The Philippines, Indonesia, The U.S.A.

Industrial sector classification: 76 sectors for most detailed.

The origins of value-added embodied in

China’s export to the USA (2005)3%

90%

2% 5%

USA

Japan

China

Others

3%

90%

2% 5%

ChinaJapan China USA Other East Asia

94%

1% 2% 3%

JapanJapan China USA Other East Asia

7%4%

4%4%

81%

KoreaJapan China USA Other East Asia Korea

9%4%

6%

7%

74%

ThailandJapan China USA Other East Asia Thailand

US trade deficits with China

0 100 200 300

2000

2005

2008

Traditional approachTrade in value-added

-21%

-20%

-27%

BillionUS$

international trade as a flow of values

rather than of products.

Trade in Value-addedmeasures

Measuring trade in terms ofvalue-added allows us:

• To provide a more realistic view about bilateral trade in the light of international production sharing;

• To avoid multiple counting of trade flows when goods are transferred across borders;

• To univocally identify the origins of imported products, which helps to design trade policies like tax scheme.

Thank you !!

How to measure TiVACountry R’s export of value-added to country T

TiVART=ΣSVR·LRS·FST

=>Trade balance between R and T:TiVART-TiVATR

Where

VR : Vector of value-added ratios of country RLRS : Leontief inverse matrix for transaction between

country R and SFST : Final demand vector of country T for the

products of country S

Deardorff (1998)

The splitting of a production process into two or more steps that can be undertaken in different locations but that lead to the same final product.

Fragmentation: A definition

Boeing 787 is made in ???

Agri- Manu- Services Agri- Manu- Services Cons- Invest Cons- Invest Exportculture facturing culture facturing umption -ment umption -ment to RoW

Agriculture

Manufacturing

Services

Agriculture

Manufacturing

Services

Agriculture

Manufacturing

Services

Wages

Profits

Depreciation

Taxes

LUW

Intermediate DemandU.S.A.

Final DemandU.S.A.

Final DemandCHINA

LCW

U.S

.A.

Intermediate DemandCHINA

CH

INA

VC

RES

T O

FTH

EW

OR

LDVa

lue-

adde

d

VU

Bilateral IIOT between

China and USA

A schematic image of the Asian International Input-Output Table

Indo

nesi

a

Mal

aysi

a

Phi

lipp

ines

Sing

apor

e

Tha

ilan

d

Chi

na

Tai

wan

Kor

ea

Japa

n

U.S

.A.

Indo

nesi

a

Mal

aysi

a

Phi

lipp

ines

Sing

apor

e

Tha

ilan

d

Chi

na

Tai

wan

Kor

ea

Japa

n

U.S

.A.

Exp

ort

toIn

dia

Exp

ort

toH

ong

Kon

g

Exp

ort

toE

U

Exp

ort

toR

.O.W

.

Stat

isti

cal

Dis

crep

ancy

Tot

alO

utpu

ts

code (AI) (AM) (AP) (AS) (AT) (AC) (AN) (AK) (AJ) (AU) (FI) (FM) (FP) (FS) (FT) (FC) (FN) (FK) (FJ) (FU) (LG) (LH) (LO) (LW) (QX) (XX)

Indonesia (AI) AII AIM AIP AIS AIT AIC AIN AIK AIJ AIU FII FIM FIP FIS FIT FIC FIN FIK FIJ FIU LIG LIH LIO LIW QI XI

Malaysia (AM) AMI AMM AMP AMS AMT AMC AMN AMK AMJ AMU FMI FMM FMP FMS FMT FMC FMN FMK FMJ FMU LMG LMH LMO LMW QM XM

Philippines (AP) API APM APP APS APT APC APN APK APJ APU FPI FPM FPP FPS FPT FPC FPN FPK FPJ FPU LPG LPH LPO LPW QP XP

Singapore (AS) ASI ASM ASP ASS AST ASC ASN ASK ASJ ASU FSI FSM FSP FSS FST FSC FSN FSK FSJ FSU LSG LSH LSO LSW QS XS

Thailand (AT) ATI ATM ATP ATS ATT ATC ATN ATK ATJ ATU FTI FTM FTP FTS FTT FTC FTN FTK FTJ FTU LTG LTH LTO LTW QT XT

China (AC) ACI ACM ACP ACS ACT ACC ACN ACK ACJ ACU FCI FCM FCP FCS FCT FCC FCN FCK FCJ FCU LCG LCH LCO LCW QC XC

Taiwan (AN) ANI ANM ANP ANS ANT ANC ANN ANK ANJ ANU FNI FNM FNP FNS FNT FNC FNN FNK FNJ FNU LNG LNH LNO LNW QN XN

Korea (AK) AKI AKM AKP AKS AKT AKC AKN AKK AKJ AKU FKI FKM FKP FKS FKT FKC FKN FKK FKJ FKU LKG LKH LKO LKW QK XK

Japan (AJ) AJI AJM AJP AJS AJT AJC AJN AJK AJJ AJU FJI FJM FJP FJS FJT FJC FJN FJK FJJ FJU LJG LJH LJO LJW QJ XJ

U.S.A. (AU) AUI AUM AUP AUS AUT AUC AUN AUK AUJ AUU FUI FUM FUP FUS FUT FUC FUN FUK FUJ FUU LUG LUH LUO LUW QU XU

Freight and Insurance (BF) BAI BAM BAP BAS BAT BAC BAN BAK BAJ BAU BFI BFM BFP BFS BFT BFC BFN BFK BFJ BFU

Import from India (CG) AGI AGM AGP AGS AGT AGC AGN AGK AGJ AGU FGI FGM FGP FGS FGT FGC FGN FGK FGJ FGU

Import from Hong Kong (CH) AHI AHM AHP AHS AHT AHC AHN AHK AHJ AHU FHI FHM FHP FHS FHT FHC FHN FHK FHJ FHU

Import from EU (CO) AOI AOM AOP AOS AOT AOC AON AOK AOJ AOU FOI FOM FOP FOS FOT FOC FON FOK FOJ FOU

Import from the R.O.W. (CW) AWI AWM AWP AWS AWT AWC AWN AWK AWJ AWU FWI FWM FWP FWS FWT FWC FWN FWK FWJ FWU

(DT) DAI DAM DAP DAS DAT DAC DAN DAK DAJ DAU DFI DFM DFP DFS DFT DFC DFN DFK DFJ DFU

Value Added (VV) VI VM VP VS VT VC VN VK VJ VU

Total Inputs (XX) XI XM XP XS XT XC XN XK XJ XU * Each cell of A** and F** represents a matrix of 76 x 76 and 76 x 4 dimension, respectively.

Duties and ImportCommodity Taxes

Intermediate Demand (A) Final Demand (F) Export (L)

Traditional measure (Béla Balassa, 1965) RCAiR = EXiR ∑ EXiRi⁄∑ EXiRR ∑ ∑ EXiRiR⁄

New measure based on the concept of TiVA (Meng, Yamano and Fang, 20 RCAD∙jr = TiVAD∙jr ∑ TiVAD∙jrj∑ TiVAD∙jrr ∑ ∑ TiVAD∙jrjr

RCAD∙jrs = TiVAD∙jrs ∑ TiVAD∙jrsj∑ TiVAD∙jrsr ∑ ∑ TiVAD∙jrsjr

Comparative advantagebased on value-added

Revealed comparative advantage(Computers, OA equipment)

従来の比較優位指標 付加価値ベースの指標 従来の比較優位指標 付加価値ベースの指標Singapore 6.80 Ireland 9.55 Mexico 5.48 Singapore 7.93Ireland 5.27 Singapore 6.50 Singapore 4.49 Thailand 5.81Chinese Taipei 3.60 Chinese Taipei 3.21 Ireland 4.03 Mexico 4.84Mexico 3.16 Mexico 2.86 China 4.01 Hong Kong 4.65Japan 2.13 Poland 1.95 Thailand 3.88 Ireland 3.81United States 1.59 Japan 1.81 Hong Kong 3.71 China 2.66Hong Kong 1.49 United Kingdom 1.52 Czech Republic 1.91 Hungary 2.24United Kingdom 1.47 United States 1.52 Hungary 1.72 Philippines 1.92China 1.06 Hong Kong 1.47 Japan 1.26 Japan 1.24Poland 0.92 RoW 1.03 Philippines 1.04 United States 0.86Korea 0.83 France 0.97 Chinese Taipei 0.83 United Kingdom 0.67France 0.80 Korea 0.53 United States 0.69 Korea 0.55Canada 0.57 Australia 0.47 Korea 0.47 Germany 0.48Australia 0.46 Spain 0.47 United Kingdom 0.41 ChineseTaipei 0.48Spain 0.39 China 0.47 Germany 0.30 RoW 0.46Finland 0.33 Germany 0.42 India 0.30 India 0.39Netherlands 0.32 Netherlands 0.34 Netherlands 0.26 Czech Republic 0.35Italy 0.31 Romania 0.33 France 0.25 Sweden 0.31

1995年 2005年1995Traditional index Value-added index

2005Traditional index Value-added index