"Made In China" Is Far From Being Taken Over By The United States.

China July

According to Hopkin Bart, a senior economist at the Federal Reserve Bank of San Francisco and Bart Hobijn, Galina, the share of Chinese made goods in the US consumer market is far less widely recognized than Hale.

After analyzing the survey data of Commerce Department, Bureau of Labor Statistics and the Census Bureau (Census Bureau), they found that 88.5% of the goods and services consumed by American households were produced in the United States.

In the remaining 11.5% of the imports, the proportion of manufactured goods in China is barely more than 1/4, that is to say, it accounts for only 2.7% of the total consumption expenditure in the United States.

Even if this is the upper one.

In this regard, Haier and Hopkin explained:

Obviously, if a pair of sports shoes made in China sells for us $70 in the US, the US $70 will not all belong to Chinese manufacturers.

In fact, most of the retail price will be used to pay for the pportation of shoes to the United States, the rental of sports shoes retail stores, dividends to American retailers and the marketing cost of sports shoes.

These costs include salaries, wages and benefits paid to us workers and managers involved in this process.

The calculation of the Federal Reserve Bank of San Francisco found that on average, 36% of the import price went to the pockets of American businesses and workers.

The proportion of imports from China is even higher.

Haier and Hopkin wrote that on the "made in China" commodity, the average cost of each dollar spent on one piece of goods made in the United States went to the service industry in the United States. In other words, "made in China" has an American component of about 55%.

The US component of Chinese goods is much higher than that of the US's total imports. The main reason is that the retail and wholesale profits of consumer electronics and clothing are higher than most goods and services.

The problem is even more complicated now.

American family made in America

What exactly do these numbers mean? The answer is: mixed emotions.

The good news is that the Chinese threat theory, which is so terrible in the political debate in the United States, is exaggerated.

The proportion of China's exports in the total consumption of the United States may be increasing rapidly, but relatively small as a whole.

American employees and enterprises have also made considerable profits from China's exports.

The worry is that some people believe that the appreciation of the renminbi can create more space for US manufacturers to sell their products in the US market.

If the bulk of the cost of "made in China" imports actually flows to the pockets of American employees and companies, the appreciation of the renminbi will only have a limited impact on the competitiveness of US manufacturers.

From an economic point of view, one advantage of this situation is that "made in China" occupies a relatively small proportion, which means that inflation in China has limited impact on pushing up US commodity prices.

Haier and Hopkin concluded:

China's inflation rate was close to 5% in 2011.

If Chinese exporters turn domestic inflation to the price of goods exported to the United States, the US consumer price index will increase by only 0.1 of the 5%, which is equivalent to an increase of 0.1 percentage points.

The US may not be able to force China to reassess its currency, but they can at least avoid China's overspeed.