Posted on 01/24/2012 3:29:46 PM PST by SeekAndFind
Americans are used to the U.S. being the leader, or a top-ranked nation, in many areas. But in a number of industries and businesses, the U.S. has lost that first place, usually to China. While some, such as coal production, may not come as a surprise, other industries the U.S. has lost the market leadership might. 24/7 Wall St. looked at a large number of manufacturing, agricultural and financial businesses to find those in which China has surpassed the U.S.
For several years, economists have said that China’s GDP growth indicates that its economy will pass that of the U.S. in the next two or three decades. China’s GDP is measured at about $6.5 trillion, now second in the world. America’s GDP is over $15.2 trillion, according to the International Monetary Fund. While China certainly has much catching up to do, the two countries’ rate of GDP growth is also very different. Last year, China’s economy expanded at more than 9%. America’s GDP grew at a little better than 2%.
One reason that China continues to gain so rapidly on the U.S. is the high cost of American labor and manufacturing. In fact, U.S. manufacturing costs have risen so much that they are much higher than in any developed nation with factory capacity. This includes countries like China, Mexico and South Korea — places the U.S. and Japanese companies often contract to do their factory work. The labor price advantage has helped China become the largest steel producer in the world. China is also first place in car manufacturing.
Low labor costs are not the sole reason China has become the single largest provider of many goods. China’s 1.3 trillion citizens have become voracious consumers as workers in its manufacturing sector have grown the number of its middle class. China also has decided that it is often financially better to provide its own raw material for its factories — items like cotton — than it is to import such items from overseas.
24/7 Wall St. examined the manufacturing, agricultural and financial businesses in which China has surpassed the U.S. China likely will become the world’s largest economy based on GDP. It certainly has shown that it has the capacity to advance on that position — one large industry at a time.
1. Steel
> China production: 627 million metric tons in 2010
> U.S. production: 80 million metric tons in 2010
> U.S. position: 3rd
In 1973, the U.S. was the largest producer of steel, making more than 136 million metric tons of crude steel, according to the International Iron and Steel Institute. Up to that point, the U.S. had enjoyed many decades of industry dominance, centered around the city of Pittsburgh. The following year, U.S. production was overtaken by the USSR, which produced 136.2 million metric tons, compared with the U.S.’s 132.2 million. Today, however, completely different players dominate the steel market. In 2010, the world’s top producer of crude steel was China, which produced approximately 627 million metric tons. Japan was a distant second-largest producer with nearly 110 million metric tons. The U.S. was third, producing approximately 80 million.
2. Cotton
> China production: 7.3 million metric tons in 2011
> U.S. production: 3.4 million metric tons in 2011
> U.S. position: 3rd
In 2000, the U.S. produced 4.2 million metric tons of cotton — the largest amount in the world. China was not far behind, producing 3.81 million metric tons. By 2008, however, China had not only surpassed the U.S., but made nearly double the U.S.’s production amount. China produced approximately 8.1 million metric tons to the U.S.’s 4.2 million. A year earlier, the U.S. lost its second spot among top cotton producers to India, thanks in part to technological breakthroughs in seed and production practices. Between 2011 and 2012, China produced 7.3 million metric tons, India produced 6 million and the U.S. was third, producing 3.4 million.
3. Initial Public Offerings
> China production: $73 billion raised in 2011
> U.S. production: $30.7 billion raised in 2011
> U.S. position: 2nd
Even in the world of finance the U.S. is losing its dominance to China. According to the National Bureau of Economic Research, “the yearly average of U.S. IPOs has decreased from 27 percent [global share] in the 1990s to 12 percent in the 2000s.” And as the U.S.’s share of IPO proceeds decreased, China’s share increased. It is now the world leader in IPOs. In 2011, companies raised a total of $73 billion through IPOs in the Shanghai, Shenzhen and Hong Kong stock markets. This is nearly double the amount raised in New York Stock Exchange and NASDAQ, according to Dealogic. The last time the U.S. raised the most in IPO funds globally was 2008.
4. Tobacco
> China production: 3 million metric tons in 2010
> U.S. production: 0.33 million metric tons in 2010
> U.S. position: 4th
Until 1976, the U.S. produced the largest share of the world’s tobacco. Today, the U.S. only produces 6% of the global output, according to Stephan Richter, editor-in-chief of The Globalist, in an interview by Marketplace. The most recent data from the Food and Agriculture Organization of the United Nations places the U.S. as the fourth-largest producer of tobacco in the world. China is the largest, producing more than 3 million metric tons of the crop in 2010. The U.S. produced slightly more than 326,000 metric tons that year. The other larger producers are Brazil and India, in that order.
5. Autos
> China production: 18.3 million autos in 2010
> U.S. production: 7.8 million autos in 2010
> U.S. position: 3rd
Automotive manufacturing is considered one of the U.S.’s most critical industries. But in recent years, other countries have surpassed the U.S., which is now the third-largest producer of autos in the world, according to the International Organization of Motor Vehicle Manufacturers. The American auto industry nearly collapsed in 2008, requiring massive federal support for General Motors (NYSE: GM) and Chrysler. By 2010, the U.S. manufactured 7.8 million cars and commercial vehicles. Japan, which is headquarters to major brands such as Toyota (NYSE: TM), Honda (NYSE: HMC), Nissan, and Mazda, produced 9.6 million vehicles — the second most — although damage caused by the earthquake has hurt production in the country. China is the world’s largest carmaker, producing 18.3 million in 2010.
6. Beer Production
> China production: 443.8 million hectoliters in 2010
> U.S. production: 227.8 million hectoliters in 2010
> U.S. position: 2nd
The U.S. lost its top position even in beer production. In 2000, the U.S. beer industry was the greatest in the world, producing 232 million hectoliters, compared with China’s 220 million. One decade later, and China is in first place, generating 443.8 million hectoliters of beer, versus the U.S.’s 227.8 million. Not only does China have a population that is more than four times that of the U.S., but beer consumption in the country has increased dramatically in recent years. According to the World Health Organization, the average Chinese citizen drank about half a bottle of beer in 1961. By 2007, that amount had increased to 103 beers per year.
7. High-Technology Exports
> China production: $348 billion in 2009
> U.S. production: $142 billion in 2009
> U.S. position: 2nd
High-technology exports are defined as “products with high R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery,” according to the World Bank. The U.S. remains home to the largest pharmaceutical industry in the world, and the rest of industries mentioned are also huge domestically. According to the World Bank, China began earning more from high-technology exports than the U.S. as recently as 2005. In 2009, Chinese high-technology exports were worth $348 billion. High-technology exports from the U.S. were worth a more modest $142 billion.
8. Coal Production
> China production: 3.24 billion short tons produced in 2010
> U.S. production: 985 million tons produced in 2010
> U.S. position: 2nd
America led the world in coal production up until 1984, and it is now a distant second to China. According to the BP Statistical Review of World Energy, the U.S. produced just under 1 billion tons of coal in 2010. China produced more than three times that amount, generating 3.2 billion short tons. There has been exponential growth in the Chinese energy infrastructure in the past decade. Since 2005, American coal production has decreased slightly, while Chinese production has increased by nearly 38%. Despite the U.S.’s decline in coal production, it is still the world’s second-largest producer, and combined, the two countries account for more than half of the world’s total coal production.
It seems like 99% of what you pick up in our stores say “Made in China”. It’s rare to find “Made in the USA”...if I find it, I buy it...and I’m tempted to hold on to it as a collector’s item. Sad.
China has “NO UNIONS!”
11. furniture
12. television
13. radios
14. air conditioners
15. tools
16. kitchenware
17. computers
18. telephones
19. sporting goods
20. light bulbs
21. toys
22. office supplies
23. bicycles
24. clothing
25. shoes
26. appliances
27. yard supplies
28. car parts
29. etc etc etc
“It seems like 99% of what you pick up in our stores say “Made in China”. It’s rare to find “Made in the USA”...if I find it, I buy it...and I’m tempted to hold on to it as a collector’s item. Sad.”
I buy American at flea markets, antique stores, gun shows, pawn shops, etc.
The workmanship, quality, and beauty of what was manufactued in America from 1789 up until the early 1970’s is incredible.
Wot?
FWIW, China is now the world's #3 export destination for U.S. products, behind Canada and Mexico. It is also the world's leading importer of U.S. agricultural products. They still enjoy a large bilateral trade surplus with the U.S., but it's not a one way street.
I caught that too. WOW! how do they have time to produce anything? It seems they only have time for sex!
Chinese worker productivity is so low it needs 9-10 workers for every one American factory worker.
.. wow! just months ago there were somewhere around 800 million rural poor -- it's a miracle! or BS.
China is richer, but most Chinese are still poor
One measure is GDP.. "with GDP per capita at $3,744 in 2009, China placed #86 out of 164 countries ranked according to 2009 World Bank data. This was just below much smaller economies such as Tunisia, Albania and Jordan."
The rural poor actual annual income is measured in hundreds of dollars (I believe).. almost as poor as Obama's brother in Kenya.
I would say the reason that we lost all of these industries is due to overregulation by a mostly Democrat congress over the last 50 or so year, and the biggest donor to the Democrats over the same time, the unions.
Nearly half of all pharmaceuticals produced overseas, many in unregulated Chinese factories
Nearly half of all pharmaceutical drugs within the United States were not only produced overseas, but a shocking 81% of the 3,765 foreign factories have never been inspected by the Food and Drug Administration (FDA). Of these mystery drug factories, many are unregulated and stationed in China. To top it all off, the percentage climbs even higher when looking at the active ingredients for pharmaceuticals. About 80% of these active ingredients are created overseas.
An expose in the New York Times Magazine (Nov. 2, 2008) revealed that there are no major generic aspirin manufacturers in Europe or the U.S. Most aspirin is now made in China.
US-China trade statistics and China's World Trade Statistics
I have been to China. The multinationals have shipped complete factories with state of the art technology to make these workers just as competitive and productive with those in the US with the added advantage of lower labor costs and fewer government regulations. And the quality of the workforce is just as good, if not better, in terms of education and work ethic.
9. Ship building
But we are catching up to them in “Number of Communists in Government” since 2009.
“China has “NO UNIONS!”
I’m not sure that that’s the reason...China has a government that is doing whatever it can to create an environment that will raise the standard of living of its people.
Unlike certain others.
As far as China being the largest destination of US exports, I would say the EU is considerably larger.
“But we are catching up to them in “Number of Communists in Government” since 2009.”
They have a lot of people...and a somewhat smaller government proportionally...I wonder how soon we will cross over in “percentage of government employees”.
Maybe we already did!
If you count the EU as a whole, yes. On a national basis, china is #3.
“I have been to China. The multinationals have shipped complete factories with state of the art technology to make these workers just as competitive and productive with those in the US with the added advantage of lower labor costs and fewer government regulations. And the quality of the workforce is just as good, if not better, in terms of education and work ethic.”
Plus..........if you hire a chinese worker, you do not have to pay any Social Security tax, no workers compensation, no sick time, no health care, no dental , no vision, no holiday pay, no vacation pay. Additionally, a company can hire a 12 year old girl since there are no child labor laws , no OSHA, no NLEB to worry about.
I company has to be completely crazy to hire an American instead of a chinese . NO wonder all factory jobs will be completely disappeared within another decade.
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