China's Trade Surplus?

According to China Daily: A Barbie Doll that $20 in the US but China only gets about 35 cents of that.

What figure are used to calculate the trade surplus? $20 or 35 cent?

Answer:
If China's Export Price is $0.35 (FOB Port of China) per doll then it would go in to computing the balance of trade of china, as its export.

If USA imports it assuming $20 (CIF) the amount of $20 goes to the computation of US bal of trade as import.

Balance of Trade is Export minus Import = if Positive trade surplus, if answer is negative its trade deficit.

FOB - Freight on Board
CIF - Cost , Insurance and Freight
The 35 cents.

The trade surplus is how much more we pay them for their goods as they pay us for ours (and thus we have a trade deficit). Since we are only paying them the 35 cents, that is all that matters in this case. The other 19.65 is just Mattel (or whoever owns Barbie), putting their markup on the product.

If the Barbies were Chinese Barbies, it would be a different story as that money (the $20) would be going back to a Chinese company and thus making the full price part of the "trade". It would actually probably be a little less than $20 of course, as the store (Wal-Mart or whoever) would only be paying $15 or so to the Chinese company, and then selling for $20 in their store for their own profit. But all the same, it would still be more than just the 35 cents.

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