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MidnightCall Magazine
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News From Israel MagazineChina Reverting to Form as the World’s Workshop
China is set to overtake the US next year as the world’s largest producer of manufactured goods, four years earlier than expected, as a result of the rapidly weakening US economy.
The great leap is revealed in forecasts for the Financial Times by Global Insight, a US economics consultancy. According to the estimates, next year China will account for 17 percent of manufacturing value-added output of $11,783bn and the US will make 16 percent.
As recently as last year, Global Insight economists predicted that the US would retain the top position until 2013, but a large downward revision in likely output this year and next is expected to cause the US to slip more quickly than had been expected.
The data underline the surge of China’s manufacturing-led economy in the past 20 years. In 1990, before economic reforms began to work, it accounted for a meager 3 percent of global manufacturing. Manufacturing accounted for just 17.5 percent of global gross domestic product in 2007, but much activity in the considerably larger area of services, for instance in retailing, distribution, transport and communications, depends on it.
The expected change will end more than a 100 years of US 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.
-Financial Times, 11 August 2008, pg. 1
This report confirms China as the new arising economic power structure; in this case, manufacturing. What is hidden in this report is the ability of China to invest globally. With this process going on, China will be forced to adapt even more to European (and American) business practices, and thereby will be integrated even more into the family of global nations.
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