China continued to widen its manufacturing export lead over the United States in 2011, according to a new Manufacturers Alliance for Productivity and Innovation (MAPI) report.
Despite increasing its exports of manufactures in 2011 to $1.147 trillion, the United States had its overall trade deficit in manufactures increase to $463 billion, a rise of $48 billion, MAPI noted. U.S. manufacturing exports rose $123 billion, or 12%, in 2011.
China saw its manufacturing exports grow $302 billion to $1.798 trillion in 2011 and its overall trade balance soar $125 billion, an increase of 23%, to $659 billion.
The U.S.-China trade figures for 2011 illustrate the continuing dramatic changing of places between the two largest exporters of manufacturers since 2000, according to a new MAPI report, "U.S. and Chinese Trade Imbalances in Manufactures Surge in 2011."
"The increase in the U.S. deficit equated to a net trade-related loss of 200,000 to 400,000 manufacturing jobs, and a correspondingly lower level of production," said the report's author, Ernest Preeg, MAPI's senior advisor for International Trade and Finance. "The immediate question is what will happen in 2012 and, in particular, will the trade imbalances continue to grow, with substantial adverse impact on U.S. manufacturing jobs and production? The answer is unclear, but not promising for the United States."
Manufactured goods constitute the dominant sector of trade, accounting for 95% of Chinese and 80% of U.S. merchandise exports, MAPI pointed out. The sector is also central to technological innovation, as two-thirds of U.S. civilian research and development and new patents derive from the manufacturing sector.
Chinas exports are on track to double U.S. exports by 2015, while in 2000, U.S. exports were three times larger than Chinese exports, MAPI stated.
"The most important international policy issue influencing price-sensitive trade in manufactures is the Chinese policy of maintaining a greatly undervalued currency," Preeg said. "Chinese official purchases of $3 trillion over the past 10 years have been, far and away, the largest-scale and most protracted currency manipulation in IMF history. In any event, with sagging Chinese domestic growth, there will be even stronger Chinese resistance to revaluing its currency and thus reducing the strong, export-driven growth momentum for manufactured exports."
On Monday, Chinese Premier Wen Jiabao lowered the country's growth target for 2012 to 7.5%. down from 9.2% in 2011. In a report to the National People's Congress, Wen acknowledged ongoing concerns about the European debt crisis and trade protectionism, but gave a generally upbeat report characterizing the Chinese economy as "robust."
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