When You Buy "Made In China", Most Of Your Money Actually Goes To America

Business Insider highlights a report which claims that flow of money from American consumers to Chinese manufacturers is less torrential than is widely believed:

We spend a lot of money on stuff with the “Made In China” tag on it. Americans consumed a record $273,063.2 million more from China than we sent in return 2010. The “Buy American” camp uses this as proof that globalization has hurt American businesses.

A new report from the San Francisco Federal Reserve Board (via Paul Kedrosky) shows that this isn’t actually the case. A full 88.5% of US consumer spending is spent goods and services made in the US, while China gets only 2.7% of American consumer dollars.

Even when you buy Chinese, 55 cents of every dollar goes to services produced in the U.S.

Typically you are paying for some American labor and raw materials, US corporate profits, U.S. transportation services and more ….