The Financial Times reported recently that the United States still is the world leader in manufacturing, but that China will overtake us in 2011.
The US took the lead from Britain in the 1890s. China is said by economic historians to have held the title for the 1,500 years before 1850 when Britain took over in the Industrial Revolution, FT.com says.
The figures have been compiled by IHS Global Insight, a US economics consulting firm.
According to IHS, the US in 2009 created 19.9% of world manufacturing output, while China did 18.6%.
IHS says that in 2009, manufacturing output by the US totaled $1.7 trillion while China had $1.61 trillion. In 2011, IHS estimates that China will put out $1.87 trillion, just slightly ahead of the projection for the US.
IHS says that world manufacturing output in 2009 totaled $8.64 trillion.
Hal Sirkin of the Boston Consulting Group, said about China: “If you have a country with four times the population of the US and a tenth of the wages, it is fairly obvious they will pull ahead at some time in productive capabilities”, but that America should not feel threatened.
So indeed China is rising. But what really are the ramifications of this news?
It is many-fold:
*China has millions of poor people who are willing to work for very low wages. This is a result of 61 years of communist rule, which has destroyed the nation and its economy, and reduced the people to penury. If they can improve their lives through capitalism, that is a good thing.
*China’s new prosperity is not home-grown, but a direct result of the appropriation – or outright theft – of Western technology. China would have nothing – no computers, electricity, lasers, avionics, electronics, rockets, jets, advanced metallurgy, composites, plastics and the like – if it had not simply taken them from the US economy.
*China’s ruthless leaders are using capitalism to prop up their failing communist system. This is another affirmation of our American capitalist system, and of the superiority of free markets, which America should re-establish as the basis of our freedom and prosperity.
*China’s ideas all are based on American ideas. And if China puts out a new product, American ingenuity can make it better. So we should not be afraid of China.
*America’s economy could be producing much more in manufacturing GDP except that Democrats and environmentalists are doing everything they can to thwart us.
*America has abundant energy supplies, natural resources and brain power, yet manufacturing and any other resource-based production (power plants, timber harvesting etc.) are blocked by five American forces coming from the Democrat left – excessive regulation, excessive environmental regulation, rampant lawsuits, labor union abuse, and over taxation.
*America can easily re-take the lead and keep the lead in manufacturing even though our wages are much, much higher than China’s. Because the world market is growing all the time, and so there is plenty of room for America to increase manufacturing by offering good products in the world market.
*It is a myth that America cannot compete with low Chinese wages. Those naysayers ignore the fact that America today is producing about the same manufacturing output as China even though our wages today are much, much higher. So today, we are already competing.
*China is an unstable nation that could tumble into chaos if its political leaders are challenged. Any serious crackdown in China could lead to a tarnishing of its image as a global manufacturer and lead to a flight of capital and a ban on technology exports to China, much as American technology was barred from being exported to the Soviet Union during the Cold War.
*Despite the false portrayal of “rich Republicans”, American wealth today is being concentrated in the hands of nonproductive leftists like George Soros and Democrat ‘paper billionaires’ on Wall Street like Goldman Sachs CEO Lloyd Blankfein. But these lefties are not creating new wealth through manufacturing, but are only taking wealth for themselves in paper transactions, like Soros’ currency speculation.
*If America is to continue its prosperity, we need to allow real productive capitalists to prosper by “making things” in manufacturing, not allowing more and more of our wealth to fall into the hands of leftists.
*American leftist are using their enormous wealth to thwart the production of hard goods in this nation, in effect allowing China to take more and more of the world market. We must point this out to the American people and change this paradigm by once again allowing resource extraction and manufacturing to flourish, not to be penalized by endless eco-hysteria and restrictions on energy supplies.
*China’s economic growth is based on coal energy, while American environmentalists are trying to push us into inefficient windmills and solar panels which will destroy our energy supply and our economy. China even is building some of these solar and wind-power systems and selling them to the US, while China builds one new coal-fired electricity generating plant every week. Until the US starts to build new nuclear plants, we risk falling behind China.
Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.