China Surpasses U.S. as World's Top Manufacturer

China is now the world's top goods producer by output, ending the U.S.'s 110-year reign as the largest manufacturer, according to IHS Global Insight.


After poring over data from U.S. Bureau of Economic Analysis and the National Bureau of Statistics of China, the economics consultancy firm estimates that China last year accounted for 19.8% of world manufacturing output. That is slightly higher than the U.S.'s 19.4%.


U.S. manufacturing had shrank in 2008 during the global financial crisis, while Chinsese manufacturing continued to grow. American manufacturing returned to growth in 2009 and expanded 12.6% last year.


But China's manufacturing sector grew faster at 18%, according to IHS Global Insight, which cites the sheer size of Chinese manufacturing and the strength of the renminbi against the U.S. dollar as contributing factors.


However, much of China's manufacturing output was driven by the subsidiaries of U.S. companies in China and was based around American technologies. U.S. productivitiy is also still much higher than productivity in China -- the output of 11.5 million U.S. workers is equivalent to the output of 100 million workers in China.


The U.S. economy remains the world's largest at US$15 trillion, dwarfing China's US$6 trillion. The Chinese recently overtook the Japanese as the world's second-largest economy.



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