Made in China: <3%!

Here’s something that should revise a lot of clichés, though it probably won’t: less than 3% of U.S. consumption expenditures are on goods made in China. Almost 90% are made in the USA. Of course, the domestic total is boosted by services—but even durable goods are 12% China, 67% U.S. And less than half the value of Chinese imports go to China—55% of the money spent on “Chinese” goods represent processing and other services (like distribution and retailing) provided in the U.S.

This info comes from a new paper by Galina Hale and Bart Hobijn of the San Francisco Fed. Their point was to show that Chinese inflation has minimal influence on U.S. price levels, which is persuasive. But it’s also an antidote to the widespread belief that the U.S. is hollowed out and all the action is in China. We’ve got problems, yes, but we’ve also got resources—resources we can do a lot better with than we are now.

7 Comments on “Made in China: <3%!

  1. Those figures might not accurately reflect volume if goods made in China tend to be cheaper than goods made in the US.

    Then again, China may have reached its limits on financing US consumption, and is demanding “International supervision over the issue of U.S. dollars” and cuts for “military and social welfare expenditure”.

    Since cheaper goods reflect a more competitive market for labour, this could mean a reduction in the total amount of work performed by employees in the US out of proportion with the share of total GDP, and accordingly (in the current system) a similar reduction in the number of “jobs” in the US. …

    That article is quite confusing tho, contrast these two statements:


    Table 1 shows that, of the 11.5% of U.S. consumer spending that goes for goods and services produced abroad, 7.3% reflects the cost of imports. The remaining 4.2% goes for U.S. transportation, wholesale, and retail activities. Thus, 36% of the price U.S. consumers pay for imported goods actually goes to U.S. companies and workers.


    When total import content is considered, 13.9% of U.S. consumer spending can be traced to the cost of imported goods and services. This is substantially higher than the 7.3%, which includes only final imported goods and services and leaves out imported intermediates.

    So if the 7.3% does not include imported intermediates (such as ‘Imported oil, which makes up a large part of the production costs of the “gasoline, fuel oil, and other energy goods” and “transportation” categories’), then the burden to the economy (as opposed to the burden to consumers, which is what the 13.9% would seem to represent) would also include the cost of these imported intermediates, and so it would seem that the 4.2% in the first quote would not be going to U.S. companies and workers unless the 11.5% does not represent the cost of import intermediates.


  2. The U.S. will lose its century long preeminance in manufacturing to China this year or next, a position it took from Great Britain – a country Marx wrote of as ‘the workshop of the world’. Historically, power has followed production and the requisite and necessary changes in international governing structures have yet to be made vis a vis the US and China. I don’t know many who think the U.S. will give that up voluntarily or peacefully.

  3. Pingback: ‘Made In China’ Accounts For Less Than 3 Percent Of American Personal Consumption Expenditures | ThinkProgress « mawillits

  4. Pingback: U.S. Consumers Spend < 2% on "Made in China" « JCC.COM

  5. Starting with the durable goods number of 12%, that is of course a dollar value, not a count, weight, or volume. Chinese goods are made with cheaper labor, and are also most often downmarket from goods made in USA. One USA made product might well cost 10 or 100 times as much as a Chinese one in a similar product classification, and might not be visible to most people in most retail stores, only being available in high end botiques. So should we feel good that we are a vibrant manufacturer of small quantities of enormously high priced goods which only plutocrats can afford? And doesn’t that 12% include things like automobiles, which are indeed quite often made in the USA with relatively little Chinese content, but infrequently purchased and often with Japanese branding. In many common categories such as clothing and electronics and major appliances it seems like the vast majority of items sold come from Asia or Mexico, and it’s not easy for most people to find affordable items in those categories made in USA.

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