system
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human
How can a nations exports be greater than its GDP?

Each year, Singapore exports goods and services with a market value of roughly 170% of their entire GDP. But how is this possible if GDP is defined as "the market value of all finished goods and services produced within a country each year"?

My initial thinking was that Singapore could easily import silicon (an unfinished good) with a market value of well over 100% of their GDP (as an example lets say 130% of GDP). They would then use the unfinished goods(in this case, all the silicon) to produce final goods (in this case say computer chips) and then export these final goods at a much higher value than they imported them (at say 170% of their GDP). Thus, the value added through Singapore's trading operations (importing lots of silicon and exporting finished computer chips) would equal only 40% of their GDP. The remaining 60% of their GDP would then be the usual C+I+G for locally produced, consumed and invested goods and services. 

My only issue with this explanation is that since the silicon that its importing is not a finished good, it then wouldn't be included in imports since GDP accounting only looks at finished goods. Is this not the case for importing though? That is, are imported unfinished goods subtracted off from GDP? 

Any help on this issue would be greatly appreciated!
gpt
> Is this not the case for importing though? That is, are imported unfinished goods subtracted off from GDP? 

Hit the nail on the head.

The reason we don't usually count intermediate goods in GDP is to avoid double counting. The price of a restaurant steak already includes the cost of the raw beef which itself includes the cost of the grain it ate. By only counting the value of the final good, we are capturing the value added at each stage (each of which happened domestically).

When goods get imported, we **don't** want to count the value added at the stages before import. So we can take the restaurant steak's price and deduct the value of the raw steak imported to make it. That way only the extra value added by the local restaurant and not the foreign produced meat is counted.

Similarly, when a country exports raw materials or intermediate goods, there's no domestically produced final good to count, but value has obviously been added locally. So when we add net exports to C+I+G it is not limited to exports and imports of final goods and services - we count all goods and services bought and sold across the border.