The trade battle between China and the US was started by a long-standing grievance over the US's growing deficit. But that's based on imports and exports alone and doesn't take into account how much business US companies do in China. CGTN'S Owen Fairclough has more.  

U.S. President Donald Trump talks a lot about deficits.

Trump launched a trade war with China partly because he thinks the trade imbalance - that's the U.S. importing far more goods from China than China exports here-harms economic growth. But notice I said goods. In 2016, the U.S imported around 462 billion dollars' worth of goods from China. And it exported just 115 billion dollars' worth of goods. That's a deficit of 347 billion and it's increased even more since then.

OWEN FAIRCLOUGH WASHINGTON "But those numbers tell only part of the story. There are scores of multinationals like Starbucks doing business in China and generating huge sales.

And those companies recorded 345 billion dollars of sales in China in 2016-the most recent numbers. So, let's look at that 2016 deficit again. Imagine we counted those sales by U.S. companies as an export to China, we'd add 345 to 115 for a total of 460 billion dollars against Chinese imports totalling 462 billion dollars. Suddenly, that's a tiny deficit of 2 billion dollars. But that isn't the way the current trade balance or imbalance is calculated by the U.S. government. So, for now, that deficit is, officially at least, too big for the Trump administration. Owen Fairclough, CGTN, Washington."