"Made in China" products are profitably received by U.S. companies

Many Americans suffer from "Made in China" fears because they want to be able to keep their US dollars in their own country, instead of traveling to the pockets of the Chinese people. However, according to the latest research findings, most of the money consumers spend on buying “Made in China” products is actually received by US companies, not China.

According to a report by the New York Times reporter Catherine Rampell published by the Federal Reserve Bank of San Francisco, when consumers buy Chinese-made goods, China pays 45 cents for every dollar it pays, which is the cost of original imports.

The remaining 55 cents is distributed in the distribution of products in the United States, such as the transportation of products, the rental of shops selling the products, salaries of employees, marketing expenses of products, dividends distributed to retailers after distribution of products, and so on.

In addition, the income that US merchants receive in the distribution process is higher than that of retail products produced in China. Of the total retail prices of imported goods, US companies and employees only received 36% of them or 36 cents of the US dollar, which is lower than the 55 cents of Chinese-made goods.

This difference is caused in large part by the type of goods that the United States imports from China and other countries.

Galina Hale and Bart Hobijn, authors of the research report, stated that “the United States made higher profits from Chinese manufacturing than other countries’ products because it had higher retail and wholesale profits than other goods and services, consumer electronics products and apparel.”

It must be borne in mind that U.S. consumer spending can be focused on China through other means. That is, many U.S.-made goods use imported goods as inputs. These goods, which are not directly sold to consumers, are referred to as "semi-finished goods," which is the comparison of "products."

The research report also explores how the overall US consumer spending accounts for the percentage of imported finished products (consumer products) and semi-finished products (parts, parts).

The author found that about 13.9% of U.S. consumer spending was spent on imported goods, including finished goods and semi-finished products. If only China's imports of goods, including finished goods and semi-finished products, are only 1.9%.