China Takes Growing Share of U.S. Advanced Manufacturing Market

Report shows sharp gains in electronics, industrial machinery.

Chinese Vice President Xi Jinping's visit to the United States this week is bring renewed focus on the complicated and often contentious trade relationship between the two countries.

That relationship was highlighted recently in a report warning that China is becoming a supplier of advanced manufacturing goods for U.S. businesses.

Long considered an outsourcing destination for labor-intensive consumer goods, China in 2010 supplied 7.51% of America's consumption of high-tech manufactured products, according to the U.S. Business and Industry Council, a business group representing small and mid-sized manufacturing firms. That represents a 19% increase from 2009 and nearly twelve-fold growth since 1997.

Product categories witnessing strong Chinese growth include electronic products such as computers (61% of U.S. purchases) and wireless communication equipment (nearly 29%). Other sectors include semiconductor production equipment (7.47%), semiconductors (5.59%) and electrical measurement and test equipment (7.45%).

In the industrial machinery market, Chinese manufacturers, including those owned by or affiliated with U.S. and other foreign-owned companies, produce 14.65% of industrial valves and 12.28% of motors and generators.

The USBIC report says Chinese products represent just 4% of the U.S. automotive products market, but it noted higher import penetration rates for individual products such as brakes (11.53%), vehicular lighting systems (7.61%) and miscellaneous parts (8.07%).

"The findings demolish the still-widespread view that Chinese economic competition can be safely downplayed beacuse it's largely confined to cheap consumer goods," says Alan Tonelson, author of the USBIC study, "Chinese Market Share in Advanced U.S. Manufacturing Grows at Accelerating Pace." "Dozens of America's high-value industrial crown jewels are steadlily becoming just as vulneable to Chinese competition as clothing, shoes and toys."

TAGS: The Economy
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