China to overtake USA as world’s biggest manufacturer

China is soon likely to overtake the United States as the world’s dominant manufacture. The USA has been the biggest manufacturing nation for several decades. As of 2007 it still had a significant share with 20% of the world’s total, with China producing 12%.

The gap between the two nations is narrowing rapidly though, and China looks set to overtake the US within the next few years. Manufacturing in China has increased massively in recent times, an increased that is accelerating all the time. In 1990 only 3% of manufacturing took place on China – so in just seventeen years (1990-2007) it increased by 300%. Even in 2005 it wasn’t one of the top three manufacturers, with the United States (20.6%), Japan (13.3%) and Germany (8.2%) having the strongest industries at the time. Now though, it is on the cusp of being top of the pile. As China’s manufacturing industry has grown so dramatically, the US has remain static in terms of its percentage of the globes total (based on 2007 figures).

When exactly China will overtake the US is the subject of much debate. There are many different opinions, making it difficult to judge when exactly this will happen. The Financial Times has claimed it could be as soon as 2010, with a report saying, “China will account for 17% of the world’s manufacturing output next year [2010] versus the United States 16%”. There are few who would argue that China will soon overtake the US; it’s just of matter of when. Another sign of China’s current growth is that its manufacturing industry grew by 10% in the three months from April to June 2008. Predictions as to when China will overtake the United States generally vary from 2014 to 2020.

The affect of the recession in America could accelerate China’s takeover. China hasn’t been hit but the global recession as much as the likes of the United States and Japan. It has still been affected but seems to be recovering quicker, and has been aided by a 4 trillion Yuan ($0.6 trillion) input from the Chinese government.

So it seems that China is certain to become the world’s most prominent manufacturer. It should come as no surprise as they do have the biggest population on earth, with around 1.3 billion people. It will be interesting to see how much their manufacturing industry, as well as their economy in general, will continue to grow over the coming decades. China’s population is almost a fifth of the earth’s total (approximately 19%) so it is possible their manufacturing output could mirror this. America’s total percentage will fall as a consequence, although that doesn’t necessarily mean the output amount will fall, although this is possible.

Andrew Marshall ©

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