June 22nd, 2010
05:26 AM GMT
When I saw this story from CNNMoney.com’s Chris Isidor (“China close to catching U.S. in manufacturing”), my first thought was this:
The U.S. still makes things?
Since China’s economic star was sent into orbit on the back of becoming the world’s major manufacturing center, the surprise to me wasn’t that China was about to eclipse the U.S. in manufacturing, but that it hasn’t already happened yet.
According to economic research firm HIS Global Insight, the value of goods produced by China's factories in 2009 reached about $1.6 trillion last year, compared to $1.7 trillion by U.S. manufacturers. Isidor writes that China will likely pass the U.S. in 2011, but that it could be a “close call’ this year.
So what does the U.S. still make? Plenty, it seems.
The products Americans buy at Walmart and other chain stores may come from China, Myanmar, Sri Lanka or other low-cost textile centers, but many products higher up the value food chain - such as aerospace, heavy industry equipment and microchips - can still be tagged “Made in the U.S.A.”
With China’s ability to grow through the recession and the large hue and cry from U.S. politicians and union leaders about lost jobs to Asia, it’s a reality check for those who are quick to write off the U.S. economy. As Isidor writes, manufacturing is more than a third of China’s economy, while it makes up less than 13 percent in the U.S.
This is a telling point as people are quick to hand the economic mantle to Beijing. China may be on the cusp of overtaking Japan’s economy as the second largest in the world, but China has a long way to go to top the U.S. In 2009 China’s GDP was $4.9 trillion – the U.S. total economic output was about $14 trillion.
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