Only 1.2% Of American Spending Actually Ends Up In China

For all the ballyhoo about how Chinese products have infiltrated our shelves, it turns out that only 1.2% of American spending actually ends up in their coffers. How is this?

Well, as this report from the Federal Reserve Bank of San Francisco reveals, for starters, 67% of American spending is on services — and 96% of the services we buy are totally made in the USA. So that takes out a big chunk of spending right there. On top of that, only 10% of American spending is on durable goods. And USA still dominates that category, clocking in at 66%, while China is only 12%.

It gets even better. 11.5% of what US shoppers spend goes towards goods and services produced overseas, but 36% of that goes towards US companies and workers in the form of paying for transportation, wholesale, and retail activities.

In the final analysis, only 2.7% of American spending is on “Made in China” goods, and only 1.2% of the American expenditure is on the true cost of the goods. So for every dollar spent on a plastic “Made in China” “Robert-Cop” doll, 55 cents ends up in the pockets of American companies.

Commentator Doug Henwood says the study should serve as, “an antidote to the widespread belief that the U.S. is hollowed out and all the action is in China.”

The U.S. Content of “Made in China” [Federal Reserve Bank of San Francisco]