Think everything’s made in China? Think again

“Everything’s made in China these days!” Wrong.

The Federal Reserve Bank of San Francisco decided to find out exactly how much of what we buy really is made in China. Here’s what it found.

  1. A total of 88.5% of U.S. consumer spending is on items made in the United States.
  2. Two-thirds of that consumer spending is on services, which are obviously local (no matter what accent the waiter has).
  3. All right, forget services. What about all those foreign cars and gadgets? “Two-thirds of U.S. durables consumption goes for goods labeled ‘Made in the USA,’ while the other third goes for goods made abroad.”
  4. Chinese goods account for — are you ready? — 2.7% of U.S. consumer spending.

Wait, it gets better.

Take clothing and shoes. About 35.6% of what US consumers buy is made in China. BUT that doesn’t mean 35.6% of the money goes to China. In fact, more than a third of what we spend on foreign-made goods actually goes to American firms and workers — truck drivers, marketing people, retail workers, and so on — who bring them to us.

For Chinese goods, that percentage is even higher: “[O]f every dollar spent on an item labeled ‘Made in China,’ 55 cents go for services produced in the United States.”

Prefer to see it visually? Here’s the “Geography of U.S. Personal Consumer Expenditure” for  2010:


The report concludes:

Although globalization is widely recognized these days, the U.S. economy actually remains relatively closed. The vast majority of goods and services sold in the United States is produced here. In 2010, imports were about 16% of U.S. GDP. Imports from China amounted to 2.5% of GDP.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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One Response to Think everything’s made in China? Think again

  1. As the Motley Fool explained:

    A common rebuttal I got was, “How can it only be 2.7% when almost everything in Wal-Mart is made in China?” Because Wal-Mart’s $260 billion in U.S. revenue isn’t exactly reflective of America’s $14.5 trillion economy. Wal-Mart might sell a broad range of knickknacks, many of which are made in China, but the vast majority of what Americans spend their money on is not knickknacks.”

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