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Intermediates

translation and definition "intermediate trade", Dictionary English-English online

❶It is clearly associated to trade in inputs, caused by international production chains and the development of outsourcing and offshoring strategies from multinational enterprises. Consider a farmer who grows, or produces, wheat.

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Trade in Intermediate Products and EU Manufacturing Supply Chains
BREAKING DOWN 'Intermediate Good'

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You Haven't Seen Product Recently. In the context of offshoring, computer and information services as well as other business services are often used as proxies of intermediate services. This approach is often referred to as indirect measurement of value added trade and results in estimates, while above-mentioned case studies or analysing trade in intermediate goods are considered a direct measurement. II-Os tables allow decomposing the value added contained in exports into its foreign and domestic contents.

The import content of exports is also known as vertical specialization 6. The rationale behind vertical specialization is for companies to benefit from comparative and productivity advantages at different stages of the production process. It is clearly associated to trade in inputs, caused by international production chains and the development of outsourcing and offshoring strategies from multinational enterprises.

The domestic content of exports is a measure of exports net of imported inputs 7. It corresponds to the accumulation of the value added incorporated by each of the various domestic sectors that contributed to the supply chain. For example, the table below decomposes the US trade deficit in iPhones with China by the different countries having contributed to its production.

The boundary between goods and services is blurred and current trade recording systems struggle with the adequate reporting of globalisation phenomena such as goods for processing or intra-firm trade. More broadly, China's exports have become significantly more sophisticated over the past decade see Chart 4 , as have its imports.

One useful gauge of trade sophistication is the "Rodrik index": The sophistication indices for overall trade are then calculated as a weighted average of the sophistication indices across products, with the weights determined by trade shares see Rodrik, The goods China imports tend to be more sophisticated than those it exports, and the persistent gap between export and import sophistication suggests that China continues to rely on imports in some areas particularly high-tech products for its domestic production.

In exploring the implications of increasing domestic sourcing of exports and growing product sophistication for the sensitivity of the trade balance to external shocks, two questions arise. Have imports delinked from exports? That is, has the increased domestic production capacity had the predicted effect of weakening the traditionally close link between imports of intermediate products and exports of final products?

Disaggregated trade data are used to examine this link for a group of subsectors in the electronics and machinery and transport equipment industries. The sample accounts for about half of China's imports of parts and components. Through panel estimation, each industry's imports of parts and components are regressed on the exports of final products of the same industry, controlling for other variables that represent the domestic demand for these final products, as well as the world price of the input relative to its price in China.

The full sample — is also split into two equal periods to assess whether the strength of the relationship between imports and foreign demand, on the one hand, and domestic demand in China, on the other, has changed. The results show that imports of parts and components are positively related to the exports of final products of the same industry for the full sample period, but this relationship is statistically strong only for the first half of the last decade.

Consistent with the hypothesis that imports of parts and components have delinked from exports of final products in recent years, there is no statistically significant link in the second half of the decade.

In the latter period, imported inputs have become more strongly associated with domestic demand, suggesting that China's imports of parts and components are increasingly used to meet domestic production needs which grow with the expanding domestic production capacity. Therefore, the conventional view of China's main role in international trade as an assembly center is not as good a fit as it once was.

External shocks may have more potent effects on China's trade balance and domestic economy, because a slowdown in exports may not be offset by a commensurate decline in imports. At the same time, China's imports are being driven by the country's economic growth, rather than being directly used as inputs of its products to be exported. Does sophistication affect the sensitivity of trade? That is, how have product characteristics—in particular, their growing sophistication—affected the response of trade flows to aggregate shocks?

Again, disaggregated trade data are used to capture the potential product differences within industries, consistent with the view that countries specialize in international trade at much finer levels than industries see Feenstra and Rose, ; Schott, The statistical framework used to test the hypothesis is an extension of the standard trade model that links exports and imports to external and domestic demand and the real effective exchange rate see "Why Real Exchange Rates?

The results show that, on the export side, the more sophisticated a product is, the more its exports tend to increase in response to a given increase in foreign demand, and the more its exports tend to drop for a given appreciation of the real effective exchange rate. On the import side, the more sophisticated a product is, the more its imports tend to increase in response to a rise in domestic demand, although they tend to increase less in response to a given appreciation of the real effective exchange rate.

Therefore, the rising sophistication level also points to greater sensitivity of China's exports and trade balance to demand and price fluctuations than in the past. The contribution of net exports to China's growth has increased significantly in recent years, as reflected in the surging trade surplus as a share of GDP.

The analysis above suggests that a significant part of the increase reflects structural changes in the Chinese economy, particularly the rising domestic content of its exports. Moreover, the two key trends described here imply that China has become more vulnerable to external shocks, such as a real exchange rate appreciation or a slowdown in external demand, than is generally assumed.

What is an 'Intermediate Good'

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Are there any statistics available about capital, intermediate, and consumption goods, as well as their share in world trade? The codes you refer to would be under the classification of Broad Economic Categories (BEC).

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One example of an intermediate good is salt, a product that is directly consumed but also used to manufacture food products. Gross domestic product (GDP) is a measurement of the market value of.

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nearly two-thirds of world trade in intermediate goods. Share of intermediate goods in 55% world non-fuel exports in Share of intermediate goods in world non-fuel exports (%) t The share of value-added content sourced from primary products (of domestic and foreign origin) is extremely high for non-EU countries. Robert Stehrer is Deputy Director of Research of the Vienna Institute for International Economic Studies (wiiw); Doris Hanzl-Weiss, Neil Foster and.

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Full-Text Paper (PDF): Trade in Intermediate Products and EU Manufacturing Supply Chains. Merchandise trade data for Intermediate goods exports by country including Trade Value, Product Share, Country Growth, World .