Wednesday, September 14, 2011
keeping my yuan in the U.S.
The evil dragon used to be Japan. Now it's China. India will get its turn soon enough. Americans are supposedly out of work because of China.
The fact is, Chinese imports are marginal to the U.S. economy. How marginal? You tell me. (Then I will tell you.) What percentage of Americans' personal consumer expenditures (PCE) is met by imports from China? Take a guess. Here was the correct answer in 2010.
Chinese goods account for 2.7% of US PCE, about one-quarter of the 11.5% foreign share. Chinese imported goods consist mainly of furniture and household equipment; other durables; and clothing and shoes. In the clothing and shoes category, 35.6% of US consumer purchases in 2010 was of items with the "Made in China" label.
Obviously, if a pair of sneakers made in China costs $70 in the United States, not all of that retail price goes to the Chinese manufacturer. In fact, the bulk of the retail price pays for transportation of the sneakers in the United States, rent for the store where they are sold, profits for shareholders of the US retailer, and the cost of marketing the sneakers. These costs include the salaries, wages, and benefits paid to the US workers and managers who staff these operations.
Posted by theo at 5:46 PM