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US reaping double benefit from made-in-China goods
China-made products are doubly benefiting Americans, firstly of course in terms of money as they are quite cheap and secondly because a part of the money spent goes to US businesses for services.

THE ONLY reason why Americans pick China-made-goods is their low prices, but what they don’t know is that 55% of every single dollar spent on these goods goes to US businesses for services, like marketing and sales.

A recently conducted research by the Federal Reserve Bank of San Francisco shows that last year 2.7% of the money spent by US consumers was used on China-made products. San Francisco Fed, who co-wrote the report, pointed out that consumer spending is a wide term and is not limited to shopping. Money spent at a salon or for paying water and gas bill is all included in consumer spending.

Although majority of the goods sold in the US are made within the country, shoes and clothes are an exception. About 36% of consumer spending is done on China-made goods, whereas, the spending on US-made goods stands at 25%.

The experts, however, are hoping for a change in the trend in the near future as inflation and labour cost increase in China. Dennis Yau, director-general of the Federation of Hong Kong Industries, said that the prices of China-made goods were expected to increase sometime in the future. Yau, however, added this should not bother the US consumers as they would be little affected by the situation in China’s economy.

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