The first figure I cite will find few believers: only 2.7 percent of personal consumption expenditures by Americans go to Chinese-made goods and services, while 88.5 percent of US consumer spending is on American-made goods and services (these figures can be found in a report by the Federal Reserve, which is accessible on its official website).

Many people would very likely respond to these figures in disbelief, Impossible. How can Chinese-made products account for just 2.7 percent of consumer spending when almost everything sold at Wal-Mart is made in China? The simplest explanation is this: The annual total business turnover of Wal-Mart is $260 billion, which is only a fraction of America╒s $14.5 trillion economy. Even if it is true that a lot of goods sold at Wal-Mart are made in China, the consumer spending on those goods is still insignificant compared with the national economy, not to mention that Americans spend more money on other things than on daily necessities.

The US Bureau of Labor Statistics keeps a close watch on how Americans spend their money and publishes a Consumer Expenditure Survey Report (CESR) every year. The 2010 edition of the CESR shows the breakdown of the average American consumer spending as follows: 34 percent of their income is spent on housing, 13 percent on food, 11 percent on insurance and pensions, 7 percent on healthcare and 2 percent on education. These account for nearly 70 percent of Americans╒ total spending and are comprised almost entirely of American-made goods and services (Only 7 percent of food is imported, according to the US Department of Agriculture).

Even when looking at physical goods alone, Chinese imports still account for only a small fraction of US consumer spending. Take non-durables such as food, clothing and toys for example, only 6.4 percent are imported from China while 76.2 percent are made in America. As for durable goods, things like cars and furniture, 12 percent are imported from China and 66.6 percent are made in America (the rest are imported from other economies).

In terms of total value, the US imported some $340 billion worth of goods from China in 2011, merely 2.3 percent of America╒s $14.5 trillion economy. Is that a lot? Maybe, but that much is nowhere near enough to cost Americans their jobs. Then what exactly caused the widespread misconception about Chinese-made products causing Americans their jobs? The fast-shrinking US manufacturing industry is a primary suspect.

Many people may also find it hard to believe that the real manufacturing output today in America is near an all-time high. What has dropped precipitously in recent decade is manufacturing employment. Technology and automation have allowed American manufacturers to hire fewer workers to produce more goods. A perfect example can be found in the US Steel (USS) plant in Gary, Indiana. The Gary Works of USS produced 6 million tons of steel with 30,000 workers on its payroll in 1950. Today it can produce 7.5 million tons with only 5,000 workers. This shows that the output has gone up while the number of jobs has dropped significantly.

Another 'misconception' is that China holds most of the US national debt. This is totally untrue. The US sovereign debt stood at $14.6 trillion as of August 2011, of which China held only $1.14 trillion, or 7.8 percent. The largest holder of US debt is the federal government itself. Various US government trust funds, such as social security trust funds and the Federal Reserve are major creditors. Other holders include state, county and city governments, private domestic investors and other non-Chinese foreign investors. Beside the $1.14 trillion in China's possession, another $937 billion is held by Japan and $397 billion by the United Kingdom. The latter two hold more US debt than China. This is why the popular belief that China holds most of the US national debt is a huge misconception.

It is quite clear by now that very often what people accept as truth is in fact far from the truth.

Fong Wong Kut Man, Nellieis a chartered accountant and a Hong Kong member of the CPPCC.

Original source: China Daily