Saturday, May 27, 2006

Made in China

Have you noticed how almost everything is now made in China? Check the labels on your clothing and electronics or on your shoes, and the chances are that you have a lot of Chinese stuff around.

I did some retail therapy during my vacation and at one point I started a game of trying to find something made in a country not China. Points were awarded for anything made in, say, Pakistan or Indonesia or even the Northern Mariana Islands. The jackpot was to find something made in the United States. By the end of the day I had found exactly one item of clothing (a leather belt) which was born here in the U.S..

Now, this is interesting. The theory of international trade teaches us that countries should specialize according to their comparative advantage, but it's hard to believe that the Chinese have such an advantage in practically everything. And having most of our consumption goods produced by one foreign country is a tad dangerous. I have these visions of China suddenly refusing to sell us anything (and also refusing to finance our trade deficit). All these Americans running around wearing nothing but leather belts...