Referring to the “$137.3 bil” figure quoted below, it appears to be the sum of exports and imports with China.
Is this common? I thought the convention is to show such figures as “net exports” rather?
That friend of mine for whatever reason, hadn’t indicated where he got that image from. As we know from case study questions in the exam, this is a cardinal sin that should see him hanged, drawn and quartered!
But he is a friend – and I was joking. 🙂
Anyway, the graph was scarcely comprehensible to me at first glance. So I turned to another good friend (his name is Google btw), who told me that it was from this rather cool-looking page from SingStat.
Unfortunately looking at the diagram again, this time on the web-page proper with other accompanying information, didn’t help me understand much better.
Which was a tad disappointing given:
- The obvious effort by the designer in sprucing the visuals up (form over function here though – but I am wont to elaborate).
- That the site is Singstat for crying out loud (read its mission in communicating data here).
And thus I had a somewhat disappointing diversion before answering the question directly.
It’s all about the message.
Actually, the answer I had in mind was very short. And it presumes that you have a grasp already of International Trade. If you don’t, you can read my free notes on it here.
Export revenue is usually recorded as a positive figure (reflecting monetary inflow), and import expenditure is usually recorded as a negative one (reflecting monetary outflow).
Therefore taking the sum of their respective magnitudes (i.e. ignoring the +/- signs) illustrates trade activity between the respective countries, but ignores the relative competitiveness between the countries.
And don’t quote me on this – but imagine you have 2 friends whom you always refer to as your besties based on interaction levels, except that one of them is constantly “taking” in that relationship.
Sounds like you were not entirely objective in reporting about your relationships? But hey, it wasn’t like we said that you lied.
Thus to complete the story (if you want to of course), net exports (i.e. the sum of export revenue and import expenditure with +/- respectively) are usually reported to indicate the relative competitiveness of the respective countries.
Nobody apparently knows this better than Donald Trump of course…
The author’s dilemma.
Frankly I didn’t think it was “worthwhile” posting this question here. I honestly thought the answer was short and it would be “lame” to post it here.
But the fact of the matter was that this question was posed nonetheless.
Also interactions with people in general have led me to conclude that I may be taking my relatively better knowledge in Economics for granted.
Therefore, no matter how short or apparently obvious the answer appeared to me, I thought it best to post this Q&A anyway – so there you go.
As always, leave comments below, or ask me if you have questions!
JC Econs 101 