While we were glued to our TV’s and monitors Monday looking at the destruction from the earthquake and tsunami that washed over Northeastern Japan, another economic tsunami went mostly unnoticed in the global press.
“China has become the world’s top manufacturing country by output, ending the US’s 110 year run as the largest goods producer,” wrote Peter Marsh in Monday’s Financial Times.
The change was noted in a study from IHS Global Insight, which estimated that lst year, China accounted for 19.8 % of world manufacturing output, just ahead of the US, which was reported as 19.4% in the page 4 story in the Financial Times.
The value of these outputs was $1.995 trillion for China, $1.952 for the US.
So whats the good news in this report for the US?
“The US has a huge productivity advantage in that it produced only slightly less than China’s manufacturing output in 2010 but with 11.5 million workers compared to 100 million employed in the same sector in China.” – Mark Killion, IHS Global Insight World Industry Services.
Also, we need to remember that much of that Chinese manufacturing output was produced by Chinese subsidiaries of US companies, and based on US derived technologies. Some consolation that is…
And a frustrating final footnote, part of the boost can also be attributed to the 3% appreciation of the Chinese Yuan to the US Dollar between 2009 and 2010. Be careful what you wish for…