Chain Reactions

China Is Quickly Catching Up to U.S.

Good article in the Wall Street Journal that looks at the forces at play that could see China soon becoming the world's largest manufacturer. Currently, the United States has about an 8% lead on China in terms of total worldwide production, but that gap could be erased by 2015, according to at least one prediction.

The article examines both major schools of thought regarding Chinese manufacturing, and presents the pros and cons of each:

1. The offshoring of low-value, manual labor jobs is a sign of a society, evolving to a higher-skilled economy. In other words, China supplanting the U.S. as the world's leading manufacturer will be a good thing.

2. The loss of America's industrial base will jeopardize our ability to compete globally, as there's been little evidence to suggest that those new high-value, service industry jobs exist in sufficient numbers to replace all the out-of-work production workers. In other words, sending manufacturing jobs over to China is a bad thing.

The article also points out that, more than six months into his administration, President Obama has yet to clarify his position on Chinese competition, which isn't terribly surprising since he has yet to articulate his position on manufacturing, either, despite the fact that manufacturing accounts for 13% of the U.S. GDP. Well, maybe the topic will come up in time for the next election cycle.

TAGS: Supply Chain
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