Does It Matter China Made the U.S. Olympic Uniforms?
By John Bussey @ WSJ (July 20, 2012)
Says an executive with a U.S. manufacturer that has operations in China: “The comments reflect either a lack of understanding of comparative advantage and how trade works (the Chinese are really good at producing low-cost uniforms, the U.S. is really good at innovative technology and advanced manufacturing—which would you rather be?), or cynical politics. More likely both.” He doesn’t want to be named and get his company in trouble with the politicians.
The flap over the uniforms has a lot to do with America’s fraught relations with China—a sense that the U.S. is losing the race to this commercial juggernaut. Ask the average man on the street what percentage of what we buy in the U.S. is made in China—including those Olympic uniforms—and you’ll probably get estimates well into the double digits.
And yet researchers at the Federal Reserve Bank of San Francisco calculate that in 2010 goods labeled “Made in China” accounted for just 2.7% of U.S. personal-consumption expenditures on goods and services—all the things we buy in a given year, from cars to clothing to health care. (Services account for about two-thirds of our spending and are chiefly produced locally.)
U.S. businesses transport, sell and market those Chinese goods. Strip that value out, and the percentage attributed to the actual cost of Chinese imports drops to just 1.2%. Products that are made in America also sometimes include made-in-China components. But when the researchers added those components into their calculations, the final figure inched up to just 1.9%.
“Although globalization is widely recognized these days, the U.S. economy actually remains relatively closed,” the researchers said in their report. “The vast majority of goods and services sold in the U.S. is produced here.”