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To: energyplay who wrote (53927)	10/3/2004 12:16:01 PM
From: RealMuLan	Read Replies (1) \| Respond to of 74559

No problem, energyplay. One thing to keep in mind when looking at the export number from China to the US is "price transfer". Chinese gov. has only started to look at it this year. For example, a portable tape recorder which sold in China for >600 Yuan, and here for retail price $70-80 or so, was listed for only 5 Yuan when export. This kind of price transfer (may not be as extreme as this case) is wide-spread in US-owned or JV companies in China. How much that would skew the electronics’ trade number? No one knows. By comparison, raw material/agricultural trade number should be much more dependable. And Chinese gov. estimates it lost billions in terms of tax income, as well as SOEs property, because of the price transfer. >>I would expect many facotries make the biggest slice of profits on ssles into the US.<< I hope you mean the US companies? If you mean Chinese factories here, then I don't think so. Majority of Chinese companies operated on razor-thin profit. When companies from developed countries cannot beat China for labor cost, they use other means to cut China’s profit and increase their own. Example—DVD player. Before 2002, those 6Cs that hold the patent for DVD only charged China, on average, for $5 patent fee for each DVD player produced. And this patent fee increased to $10, then $15, and in some cases, $20 on each player. Keep in mind, this product usually sold for only $60 on the US market. As a result (although not the only reason but a major one), just in ShenZhen, bet. Jan-June this year, there were 30+ factories making DVD players filed bankruptcy. BTW, the trend for US-China trade is down. And it is estimated that this year China will only have $5 billion in trade surplus.