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The bulk of foreign investment at this time is to China.

The dollar amounts are misleading for quite a number of reasons.

It's a small percentage of the US GDP. However, those imports when adjusted to the retail numbers don't jive.

A pair of Vietnamese Nike shoes costs Nike a few dollars. Those shoes sell for $60+ US.

A plastic toy that comes to the US costs that company a few dollars or less...and sells for $30 or significantly more.

Those high margin products "cost" the US in very tiny percentages of GDP...however they make up the BULK of the market.

The upside, the dollars and the profit stay in the USA.

The downside, (if you call it that) is that the profits go to the top folks in any company.

How does this ripple? First, when a guy has all the money he needs, what does he buy? Financial instruments. At this time, he pumps money into financial instruments. Stocks, bonds, whatever. The result....low interest rates for everyone. The upside for that guy? He doesn't need to hire more people...the economy is on an uptick...but his extra $2/hour employees in Malaysia are happy to take it.

When you factor in Chinese labor, the labor costs drop to a rate that is almost non existant as a labor component.

Many folks will claim "the cheap labor lowers prices"

And the answer...it does! However, it doesn't come down to the price the labor cost would have indicated. In fact, the prices do not ever reflect the labor cost any longer. They are so inflated, the labor cost becomes less thatn 5% of the total cost.

If labor cost were truly reflected in products...you could buy a shirt at Disney for $2 or a VCR for $15 and a DVD player for $18.