The Made In China Myth

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After another whopping monthly trade surplus, the global imbalance drum is beating loudly again. The bigger China’s surplus, so the logic goes, the more lop-sided the economic relationship with the US. So ‘Buy American’, say some, to stop money being sucked out of America and funneled into Chinese coffers (which is then, ironically, funneled back into US Treasuries).

But is the surplus really the best measure of the effects of ‘Made in China’ goods on the US economy? Perhaps not.