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<\/p>\n<\/p>\n
The United States should not kid itself. It will not recover its manufacturing position from China in any foreseeable future.<\/p>\n
According to World Bank data, in 2024 the US\u2019s GDP of US$29.2 trillion was 60 percent larger than China\u2019s US$18.7 trillion. But China\u2019s manufacturing sector, worth US$4.7 trillion and representing 25 percent of the country\u2019s GDP, was 60 percent larger than the US\u2019s, worth US$2.9 trillion and representing 10 percent of GDP. Simply put, the economic calculus is daunting.<\/p>\n
According to the International Monetary Fund\u2019s October World Economic Outlook<\/a>, the US\u2019s expected real rate of economic growth is about 2 percent in 2025 and 2.1 percent in 2026. The comparable figures for China are expected to be 4.8 and 4.2 percent.<\/p>\n If the US maintained annual growth of 2.125 percent and also increased manufacturing\u2019s GDP share by 0.25 percent each year, in 20 years, its GDP would be about US$43.8 trillion and the manufacturing sector would amount to US$6.6 trillion and 15 percent of GDP. Even if China\u2019s projected annual GDP growth rate were halved from 4.2 percent to 2.125 percent, and there were no change in the manufacturing sector\u2019s GDP share, in 20 years China\u2019s GDP would be about US$28.1 trillion and its manufacturing sector would be worth US$7 trillion\u2014still slightly ahead of the US.<\/p>\n Of course, if China could maintain its projected economic growth rate of 4 percent, in 20 years its GDP would be about US$41.1 trillion (still slightly smaller than the US economy then), but its manufacturing sector would amount to about US$10.3 trillion (about 50 percent larger than the US\u2019s). The current manufacturing gap between the US and China of about US$1.8 trillion would almost double over a generation to a chasm of about US$3.7 trillion.<\/p>\n Indeed, from a national security perspective, perhaps a more appropriate metric for comparing the size of the economies of different countries is GDP calculated on the basis of purchasing power parity<\/a>. For example, this is the metric routinely used by the Central Intelligence Agency in its national security assessments of relative economic power<\/a>. According to the CIA, in 2024 China\u2019s PPP-adjusted GDP was US$33.6 trillion, 30 percent larger than US\u2019s of US$25.7 trillion. Since China\u2019s manufacturing sector accounts for 25 percent of its economy, it would be worth about US$8.4 trillion on that basis. As the US\u2019s manufacturing sector accounts for 10 percent of its GDP, it would amount to a puny US$2.6 trillion.<\/p>\n Overcoming an adverse manufacturing gap of $5.8 trillion in the foreseeable future is wishful thinking. Assuming zero growth of China\u2019s manufacturing sector for the next 20 years, closing the manufacturing gap would require US manufacturing to grow at a torrid rate of 6 percent per year. That\u2019s just implausible.<\/p>\n","protected":false},"excerpt":{"rendered":"The United States should not kid itself. It will not recover its manufacturing position from China in any…\n","protected":false},"author":2,"featured_media":279902,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-279901","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/279901","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=279901"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/279901\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/279902"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=279901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=279901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=279901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}