China catches up with the U.S. as the world’s largest manufacturer

YIN Xingmin (殷醒民)
Professor, China Center for Economic Studies (CCES), Fudan University
Abstract:
This paper compares the internal structures of the manufacturing industries in China and the U.S. from 1998 to 2005
and leads to three major discoveries: First, the gaps between China and the U.S.’s manufacturing capacity have been
narrowing at a high speed in the last seven years, during which the share of added value of China’s manufacturing
industry to that of the U.S. increased from 13% to 52%, and then reached 76% in 2007. Second, the labor force
employed in China’s manufacturing industry increased by 50%, of which the increase in capital and technology
intensive production sectors exceeded that in labor-intensive sectors. Meanwhile, the labor force employed in the U.S. manufacturing industry decreased. Third, labor productivity in China’s manufacturing industry increased by 2.78 times, and profits increased by 2.21 times, much higher than the U.S. growth rates of 18.2% and 49.5%. Obviously, the narrowing gaps between China and the U.S.’s production capacities mean China’s industrial progress and the hierarchy of world industrial powers will be rearranged.
Key words:
China’s and the U.S.’s production industries, production growth, labor productivity, sectoral structure

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