Chapter 2
Factory Investment
How badly do U.S. companies need a manufacturing presence in China? On the surface, it doesn’t appear as if U.S. consumers spend all that much on Chinese-made products. In 2017, trade with China averaged only 3 percent of U.S. GDP. In 11 states, according to Figure 2.1, the amount spent on Chinese goods was less than 1.5 percent of GDP.
Figure 2.1 U.S. Trade with China as a percentage of GDP by state, 2017
These percentages, however, are misleading. Almost two-thirds of all U.S. spending is on domestic services such as housing, insurance, pensions, health care and education.1 When seen in terms of only what U.S. consumers ...
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