The 2020 Mid-Year Economic Update_long

China Surpasses U.S. as World’s Largest Manufacturer

MAPI chief economist: Total numbers don't tell the whole story about global manufacturing.
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No need to worry about China overtaking the U.S. as the world's largest manufacturing nation; according the United Nations, it's already happened.

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In 2010, manufacturing value-added in China was $1.92 trillion; for the U.S., the total was $1.86 trillion.

At first blush, it may be a bit of a blow to U.S. pride. But according to analysis done by the Manufacturers Alliance for Productivity and Innovation (MAPI), the total numbers don't really tell the entire story.

"Rather than using total manufacturing value-added, a more relevant analysis of very different economies involves normalizing the comparisons based on the size of the respective populations," says Daniel J. Meckstroth, chief economist for MAPI. "In other words, divide total manufacturing value-added by the size of the population to get a per capita figure."

Per capita measures still won't put the U.S. on the top of the list – that distinction belongs to Japan, followed by Germany – but it creates a clearer picture of how "manufacturing intensive" a country is, Meckstroth says. In 2010, the U.S. was the third largest manufacturing country with a per capita value of manufacturing more than four times higher than China, which ranked 12.

There's no question that China has increased its manufacturing capacity significantly in the last 10 years and is likely to continue to do so. But based on Meckstroth's analysis, they still have a significant way to go to become the real "leader" in manufacturing.

Find more analysis on China's manufacturing trends at mapi.net.

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