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Made in China
Old 03-09-2012, 01:15 PM   #1
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Made in China

I've often heard that most of what Americans spend their money on is made in China. I suspect the audience reading this forum is discerning and intelligent enough to understand the fallacy of that statement but many of you may be unaware how small the actual percentage is - I know I certainly was.

From an August 8, 2011 publication by the Federal Reserve Bank of San Francisco:

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Goods and services from China accounted for only 2.7% of U.S. personal consumption expenditures in 2010, of which less than half reflected the actual costs of Chinese imports. The rest went to U.S. businesses and workers transporting, selling, and marketing goods carrying the "Made in China" label.
FRBSF Economic Letter: The U.S. Content of “Made in China” (2011-25, 8/8/2011)

Surprising.
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Old 03-09-2012, 01:32 PM   #2
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That's personal consumption.
I think if you looked at what US manufacturing companies spend their capital budgets on, the percentage would be considerably higher.

Most of the companies I've dealt with in the last few years have bought most of their equipment from Chinese manufacturers. I'm including items that were actually fabricated in China from North American designs and marketed by North American companies.
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Old 03-09-2012, 01:41 PM   #3
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It's possible this perception came after the book "A Year Without 'Made in China,'" was published in 2007. Not read it but I listened to an interview with the author at the time. In the end she and her family found it impossible to completely get through a year without buying anything that had no component parts made in China.

Maybe big ticket expenditure swamps all the little stuff we buy day to day.

U.S. family tries living without China | Reuters

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Lamps, birthday candles, mouse traps and flip-flops. Such is the stuff that binds the modern American family to the global economy, author Sara Bongiorni discovers during a year of boycotting anything made in China.
In "A Year Without 'Made in China,'" (Wiley, $24.95) Bongiorni tells how she and her family found that such formerly simple acts as finding new shoes, buying a birthday toy and fixing a drawer became ordeals without the Asian giant.
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Old 03-09-2012, 04:10 PM   #4
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Originally Posted by REWahoo View Post
I've often heard that most of what Americans spend their money on is made in China. I suspect the audience reading this forum is discerning and intelligent enough to understand the fallacy of that statement but many of you may be unaware how small the actual percentage is - I know I certainly was.

From an August 8, 2011 publication by the Federal Reserve Bank of San Francisco:


Quote:
Goods and services from China accounted for only 2.7% of U.S. personal consumption expenditures in 2010, of which less than half reflected the actual costs of Chinese imports. The rest went to U.S. businesses and workers transporting, selling, and marketing goods carrying the "Made in China" label.


FRBSF Economic Letter: The U.S. Content of “Made in China” (2011-25, 8/8/2011)

Surprising.
What happens to the 2.7% if services are excluded from the metric?
Landsend seems to be waking up and offering a line of made-in-USA menswear but their $60 sweatshirt is not as substantial as were items from brands like Russell back 50 or 60 years ago.
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Old 03-09-2012, 04:24 PM   #5
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Quote:
Originally Posted by REWahoo View Post
I've often heard that most of what Americans spend their money on is made in China. I suspect the audience reading this forum is discerning and intelligent enough to understand the fallacy of that statement but many of you may be unaware how small the actual percentage is - I know I certainly was.

From an August 8, 2011 publication by the Federal Reserve Bank of San Francisco:

FRBSF Economic Letter: The U.S. Content of “Made in China” (2011-25, 8/8/2011)

Surprising.
That's encouraging!

I have noticed that much of what I order from Amazon is from China. Perhaps I notice it more because of delayed delivery times, or extra-sturdy packing that protects the item, but looks like it's been beat with a bat by ten foot ogres.

Still, the Chinese goods that I have purchased seem stylish, sturdy, and attractively priced.

I was thrilled to find that my (fairly inexpensive) living room furniture was made in Mississippi. So often cheaper furniture is made in China these days.
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Old 03-09-2012, 04:31 PM   #6
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Very interesting, thanks for the link. I'd never have guessed our purchases from China would be that small either. Other than furniture and clothes, their penetration here isn't nearly wha I would have guessed. Thought the chart from the article was helpful too.
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Old 03-09-2012, 05:28 PM   #7
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What a good example of how common wisdom is often far from the truth.

How very encouraging!
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Old 03-09-2012, 05:41 PM   #8
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Wow, hard to believe its that low. My BIL and I have a little game we play of we are in a store with our wives. While they shop we try to find goods that haven't been made in China. Surprising how hard it is. A while back my DW were shopping for end tables at a furniture store. We'd pick one out and I'd ask the sales guy where it was made. He'd have to run over to his computer to check but it took quite a while to find one that wasn't made in China. Even the clerk was surprised.
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Old 03-09-2012, 08:15 PM   #9
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I wonder what it would if you limited it to electronics or "things from the dollar store?"
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Old 03-09-2012, 08:41 PM   #10
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I find some of these figures hard to believe, specifically that of clothing. The difference between Made In USA and Made In China is not as significant as I thought it would be. However if you try and buy clothing Made In the USA you struggle to find anything in the store. I would love to know where all these USA produced clothing might be sold.

We have made an effort to move away from buying clothing made in China. It frustrates me that we in the western world have given away our manufacturing jobs to China and other low cost centres. I refuse to pay $100 for an item made in China when I can buy a similar item made in Italy for a fraction more

It tell you, it is hard work finding goods that are not made in China or similar low cost production centres.
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Old 03-09-2012, 08:56 PM   #11
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Originally Posted by DangerMouse View Post
I find some of these figures hard to believe, specifically that of clothing. The difference between Made In USA and Made In China is not as significant as I thought it would be. However if you try and buy clothing Made In the USA you struggle to find anything in the store. I would love to know where all these USA produced clothing might be sold.

We have made an effort to move away from buying clothing made in China. It frustrates me that we in the western world have given away our manufacturing jobs to China and other low cost centres. I refuse to pay $100 for an item made in China when I can buy a similar item made in Italy for a fraction more

It tell you, it is hard work finding goods that are not made in China or similar low cost production centres.
We have also made a commitment in recent years to buy only things made in the USA. It has been really difficult to find them.
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Old 03-09-2012, 09:04 PM   #12
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Yes, it is surprising that in dollar amount, the Chinese consumer imported goods are such a low percentage.

Yet, the prevailing Chinese goods in this country must mean that the markups put on by US makers such as Apple and US importers such as Walmart are huge. My brother told me he read how the typical Chinese manufacturer gets only something like $0.10 for $1 of sales of Walmart goods.

Even US officials often decry the Chinese for holding down the value of their currency to boost their exports. So, we have been enjoying cheap goods made abroad that we do not make anymore, while charging each other high prices for domestic services, thus resulting in low percentage of imports as consumption.

I hope that can last forever.
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Old 03-09-2012, 09:34 PM   #13
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Originally Posted by braumeister View Post
Most of the companies I've dealt with in the last few years have bought most of their equipment from Chinese manufacturers. I'm including items that were actually fabricated in China from North American designs and marketed by North American companies.
I wonder how much of the revenue would flow back to the U.S. I.e., is the situation similar to the iPhone where the vast majority of dollars are still captured by apple and not the chinese manufacturers.
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Old 03-10-2012, 05:59 AM   #14
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We have also made a commitment in recent years to buy only things made in the USA. It has been really difficult to find them.
We've had the same issue. I did find a made-in-USA backpack sprayer in Lowes next to the China ones and paid extra (I think about $15) for the USA one. But it also seemed better quality - it's also plastic, but a heavier type - and I've had my fill of junk that falls apart after a few uses.

All other things being even close to equal I'll buy the US-made stuff. If I can find it.
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Old 03-10-2012, 06:14 AM   #15
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The Personal Consumption Expenditures (PCE) includes such services as:

Housing and household operations .................................................. ...............
Owner-occupied dwellings .................................................. .............................
Rent and utilities, excluding telephone .................................................. ..........
Tenant-occupied nonfarm dwellings .................................................. ..............
Gas .................................................. .................................................. ..............
Water and other sanitary services .................................................. .................
Other lodging .................................................. .................................................
Telephone and telegraph .................................................. ...............................
Domestic service .................................................. ...........................................
Other household operations (for example, moving and storage, household
insurance, rug and furniture cleaning, electrical repair, reupholstery and
furniture repair, postage, household operation services not elsewhere
classified) .................................................. .................................................. ....
Transportation .................................................. ...............................................
Repair, greasing, washing, parking storage, rental, and leasing ....................
Bridge, tunnel, ferry tolls .................................................. ...............................
Insurance .................................................. .................................................. ....
Mass transit systems .................................................. ....................................
Taxicab .................................................. .................................................. .......
Railway .................................................. .................................................. .......
Airline .................................................. .................................................. ..........
Other (including water passenger; passenger transportation arrangement;
limousine service; other local transportation; part of Amtrak passenger,
trucking, and courier services, except air) .................................................. ....
Medical care .................................................. .................................................
Physicians .................................................. .................................................. ..
Dentists .................................................. .................................................. ......
Other professional services .................................................. .........................
Hospitals .................................................. .................................................. ....
Nursing homes .................................................. .............................................
Health insurance .................................................. ...........................................
Medical care and hospitalization health insurance .........................................
income loss insurance .................................................. ...................................
Workers’ compensation .................................................. ................................
Recreation .................................................. .................................................. ..
Admissions to all events .................................................. ...............................
Motion picture theaters, theatre, opera, and entertainment ............................
Spectator sports .................................................. ............................................
Radio and television repair .................................................. ............................
Clubs and fraternal organizations .................................................. ..................
Commercial participant amusements .................................................. ............
Parimutuel net receipts .................................................. .................................
Other (including pets and pet services, excluding vets; veterinarians; cable
TV; film developing; photo studios; sporting and recreational camps; high
school recreation; lotteries; videocassette rental; commercial amusements
not elsewhere classified) .................................................. ..............................
Personal care .................................................. ...............................................
Cleaning, storage, and repair of clothing and shoes ......................................
Barbershops, beauty parlors, and health clubs ..............................................
Other (including watch, clock, and jewelry repair; miscellaneous
personal services) .................................................. ........................................
Personal business .................................................. ........................................
Brokerage charges and investment counseling .............................................
Bank service charges, trust services, and safe deposit box rental ................
Services furnished without payment by financial intermediaries except life
insurance carriers .................................................. ........................................
Expense of handling life insurance and pension plans ..................................
Legal services .................................................. ..............................................
Funeral and burial expenses .................................................. ........................
Other personal business (including labor union expenses, professional
association expenses, employment agency expenses, money orders,
classified ads, tax return preparation services, personal business
services not elsewhere classified) .................................................. ................
Education and research .................................................. ................................
Higher education .................................................. ...........................................
Nursery, elementary, and secondary schools .................................................
Elementary and secondary schools .................................................. .............
Nursery schools .................................................. ............................................
Other education and research .................................................. ......................
Commercial and vocational schools .................................................. .............
Foundations and nonprofit research .................................................. .............
Religious and welfare activities .................................................. .....................
Political organizations .................................................. ....................................
Museums and libraries .................................................. ...................................
Foundations to religion and welfare .................................................. ...............
Social welfare .................................................. ................................................
Childcare .................................................. .................................................. .....
Social welfare (including membership organizations, job training and
vocational rehabilitation services, residential care, individual and family
services, social services not elsewhere classified, civic-social-fraternal
associations) .................................................. ..............................................
Religion .................................................. .................................................. ....
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Old 03-10-2012, 07:00 AM   #16
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We are sending China over 100 Million dollars every day in interest payments...

Looks like we also buy a few flip flops and shirts from them too.....
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Old 03-10-2012, 09:04 AM   #17
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Quote:
Originally Posted by DangerMouse View Post
I find some of these figures hard to believe, specifically that of clothing. The difference between Made In USA and Made In China is not as significant as I thought it would be. However if you try and buy clothing Made In the USA you struggle to find anything in the store. I would love to know where all these USA produced clothing might be sold.

We have made an effort to move away from buying clothing made in China. It frustrates me that we in the western world have given away our manufacturing jobs to China and other low cost centres. I refuse to pay $100 for an item made in China when I can buy a similar item made in Italy for a fraction more

It tell you, it is hard work finding goods that are not made in China or similar low cost production centres.
Looking back, the data showed only 24.9% of clothes/shoes were made in USA. While China is a big chunk of 'other', I see clothes with labels from all sorts of other countries, some Asian but not all. Not surprisingly, clothes/shoes is the category the USA has lost most of all, but China isn't the whole story.

It's worth looking at the detail. Services are 2/3rds overall, clearly it's harder to export a lot of services. It's also pretty hard to export food, much of it perishable. And we know we're still in the game WRT cars, though nothing like 50 years ago. Then if you look at what remains, you can see how much we've lost in those categories.

I guess the second lesson is though we've lost a lot of jobs to China, we've lost much more to other countries collectively. I wouldn't have guessed that. Not what popular media seems to have put in our heads?
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Old 03-10-2012, 09:28 AM   #18
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Lets see. China lends to us, and we pay perhaps 3% interest. Their currency appreciates around 5% per year, which means they are losing 2% a year. Sounds like a good deal to me and I hope it continues for a long time.

We buy from China and everyone else in the world because we want to consume as much as possible and as consumers we think low price is more important than anything else.

Our comsumption is still mostly made in the US, but we just don't recognize it so clearly because most it that doesn't carry a label. Examples are sports, movies, tv shows, music, supermarket goods, utilities, travel and transportation, and dining out. Fine foods, artisan and craft goods, distilled, brewed and fermented beverages made in the US rival the best in the world. Where price is not the deciding factor the US makes world class "stuff" and is getting better.

Manufactured good, especially price sensitive ones, are largely imported, but we also export a lot of manufactured goods too.
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Old 03-10-2012, 10:25 AM   #19
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Intresting how Japan is no longer our whipping boy.
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Old 03-10-2012, 10:33 AM   #20
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We have made an effort to move away from buying clothing made in China. It frustrates me that we in the western world have given away our manufacturing jobs to China and other low cost centres. I refuse to pay $100 for an item made in China when I can buy a similar item made in Italy for a fraction more
It's my understanding that many of these products are still made in China, but have some minor additions done in Italy so they can be labelled as "Made in Italy."
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