Heads Assplode? "Made In China" Makes Up 2.7% Of US Spending

Neon

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Mar 23, 2008
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#1
Huh? I don't get it. Can someone spot the catch here, because I can't. Then again, I don't know shit about economics.

It's All Made in China? Not So Fast!

How much of the stuff you buy in America is made in China? It’s an important question to ask as the world’s second largest economic power continues its rise and Americans fret about the direction of our manufacturing sector and economy at large, but the answer may surprise you.

While Chinese goods seem ubiquitous, especially given America’s economic woes, the reality is that imports from the country are a relatively small part of the economy: A total of 88.5 percent of consumer spending in the United States is on items made here, with only 2.7 percent spent on “Made in China” goods, according to new research from the Federal Reserve Bank of San Francisco:



When you exclude the services sector, which naturally advantages the U.S.—you’re not going to Beijing for a Big Mac or a doctor’s appointment—China still takes a relatively small share, about 20 percent of household equipment and furniture spending and 35.6 percent of clothing and shoe sales.

Even that doesn’t entirely reflect the amount of money spent on Chinese goods that stays in the United States. Chinese goods need to be transported, sold and marketed here, and so it turns out that for every dollar spent on products made in China, 55 cents go to services produced in the United States.

The San Francisco Fed studied whether rising prices in China will affect prices of goods here in the United States, and concluded it’s not likely because the amount of spending on Chinese goods is already so low. Manufacturers in China—like FoxConn, a Taiwanese company that makes electronics, including many Apple products—are increasingly addressing workers’ demands for higher wages by seeking even cheaper locales for their plants and replacing people with robots. But it’s not clear that major shifts in price would affect U.S. consumers.

The chart is a timely reminder of how much of our economic activity is right here at home, not just abroad.

That’s why consumer spending is so important in the United States—we’re our own biggest market—and why the drop in consumer confidence has made the Great Recession so much worse. But if the lack of consumer spending is a problem, it’s also an opportunity to figure out how to leverage our own buying power to pull the country out of an economic ditch.
http://www.good.is/post/it-s-all-made-in-china-not-so-fast/
 

Norm Stansfield

私は亀が好きだ。
Mar 17, 2009
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#3
That’s why consumer spending is so important in the United States—we’re our own biggest market—and why the drop in consumer confidence has made the Great Recession so much worse. But if the lack of consumer spending is a problem, it’s also an opportunity to figure out how to leverage our own buying power to pull the country out of an economic ditch.
It is baffling to me that someone with the mental capacity to learn to speak a language and express himself in it would think that convincing people to buy big houses, fancy cars, phones, electronics, go on fun vacations, stay at expensive hotels etc. is a difficult problem that requires serious figuring out. Are they really that retarded, they don't understand that consuming is one of the most fun and gratifying parts of life? That, once I can afford to consume all those great things, I don't need these assholes to figure out how to get me to spend my money on them? I' would love to consume, I would just love to just spend all my money, and even borrow some on top just to consume. Except that I'm, perfectly justifiably, too scared to part with the money I have, or get into debt. I could give a shit about having money set aside if I knew for a fact that I could continue making more in the coming years. I would spend it in a second. But I don't know that. Every piece of evidence points to the contrary.

Lack of consumption isn't the problem, it's just a symptom of the recession. Lack of spending is caused by the lack of jobs and job security, which in turn is caused by lack of investments, which in turn is caused by lack of investors' confidence in the US as a place where you can make a profit. That is the underlying cause of the recession: many major investors, the productive, rich people who usually build up an economy, don't believe they can make enough money to be worth the risks, by investing into a productive enterprise in the US.

Whenever the United States, as a nation, decides to stop endangering its own economic future by raising the deficit, and stop hindering profit seeking investors from making the biggest profits they can make, investments will start flowing into the economy, jobs will be created, people will start believing that their jobs are safe, and then everyone will start spending again.
 

Party Rooster

Unleash The Beast
Apr 27, 2005
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#4
It's only 2.7 percent because of the service sector, like the article says. And we're a service based economy. I would imagine that 35 percent number for shoes and clothes is pretty common for a lot of other things we buy.