August 15, 2008
China is set to overtake the United States next year as the world's largest producer of manufactured goods, four years earlier than expected, as a result of the rapidly weakening U.S. economy.
The great leap is revealed in forecasts for the Financial Times by Global Insight, a U.S. economics consultancy. According to the estimates, next year, China will account for 17 percent of manufacturing value-added output of $11,783 billion and the United States will make 16 percent. Last year, the United States was still easily in the top slot and accounted for a fifth of the total. China was second with 13.2 percent.
John Engler, president of the National Association of Manufacturers, a Washington-based trade group, played down the effect of the projections. It was "inevitable" that China would take over on account of its size, he said.
"This should be a wholesome development for the United States, for it promises both political stability for the world's largest country and continuing opportunities for the United States to export to, and invest in, the world's fastest-growing economy," said Engler.
As recently as last year, Global Insight economists predicted that the United States would retain the top position until 2013, but a large downward revision in likely output this year and next is expected to cause the United States to slip more quickly than had been expected.
The expected change will end more than a 100 years of U.S. dominance. It returns China to a position it occupied, according to economic historians, for some 1,800 years up to about 1840, when Britain became the world's biggest manufacturer after its Industrial Revolution. Reprinted in part from The Drudge Report