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China is ‘world’s sole manufacturing superpower’, with 35% of global output

China’s state-led economic development model and robust industrial policy has transformed it into what an influential European think tank calls “the world’s sole manufacturing superpower”, making up 35% of global gross production – more than the 9 next largest manufacturers combined.

china manufacturing gross production world

China has overseen world-historic economic growth through a government-led development model, in which state-owned enterprises control the natural monopolies and “commanding heights” of the economy, state-owned banks give favorable loans to strategic industries, and the state’s robust industrial policy helps the country move up the value chain toward higher value-added forms of production.

This model, which Beijing officially refers to as a socialist market economy, has been so successful that a prominent European think tank has acknowledged that “China is now the world’s sole manufacturing superpower”.

In 2020, China made up a staggering 35% of global gross manufacturing production. That is more than the combined output of the United States (12%), Japan (6%), Germany (4%), India (3%), South Korea (3%), Italy (2%), France (2%), and the United Kingdom.

manufacturing gross production china world

This is according to the research of Richard Baldwin, a professor of international economics at the IMD Business School in Lausanne, Switzerland, and the editor-in-chief of VoxEU, a publication hosted by the Europe-based Centre for Economic Policy Research, or CEPR (not to be confused with the Washington-based Center for Economic and Policy Research, which uses the same acronym).

CEPR is very influential in European policy-making circles, and receives funding from France’s central bank and Finance Ministry, as well as the European Central Bank, International Monetary Fund, and numerous private banks in Europe.

The think tank represents the political mainstream in the EU, and is by no means a “pro-Chinese” institution.

In a January VoxEU research paper titled “China is the world’s sole manufacturing superpower“, Baldwin wrote (emphasis added):

The US is the world’s sole military superpower. It spends more on its military than the ten next highest spending countries combined. China is now the world’s sole manufacturing superpower. Its production exceeds that of the nine next largest manufacturers combined.

Baldwin explained that, even when output is measured at value added (that is, gross production minus the cost of intermediate goods bought to produce those manufactures), China makes up 29% of global manufacturing, compared to just 16% for the United States, 7% for Japan, 5% for Germany, 3% for South Korea, 3% for India, 2% for Italy, 2% for France, and 2% for Great Britain.

china manufacturing production world 35 percent

Baldwin wrote (emphasis added):

China’s industrialisation is unprecedented. The last time the ‘king of the manufacturing hill’ got knocked off the throne was when the US surpassed the UK just before WW1. It took the US the better part of a century to rise to the top; the China-US switch took about 15 or 20 years. China’s industrialisation, in short, defies comparison.

He added that this “remarkable fact helps us to understand current US-China trade tensions”.

China’s rapid industrialization through a state-led development model has coincided with the United States’ relative de-industrialization through a neoliberal economic model based on privatization, liberalization, deregulation, financialization, and unproductive speculation.

Seeking to halt China’s rise, the US government has levied many rounds of unilateral sanctions and waged what Washington insiders have referred to as a “technology war” against China, imposing export restrictions in cutting-edge sectors like 5G, semiconductors, quantum computing, and artificial intelligence.

Western governments have pledged to “decouple” from the Chinese economy and “derisk” strategically important industries.

However, in his CEPR research paper, Baldwin emphasized that the US is much more dependent on buying Chinese manufactured goods than China is dependent on the US market to sell its exports.

US China economic trade dependency manufacture market

“In 2020, the US was about three times more exposed to Chinese manufacturing production than vice versa”, Baldwin wrote. He added that “the numbers are astounding”.

Baldwin cautioned, “Politicians may wish to decouple their economies from China. These data suggest that decoupling would be difficult, slow, expensive, and disruptive – especially to G7 manufacturers”.

17 Comments

17 Comments

  1. Eric Arthur Blair

    2024-01-31 at 08:53

    “China is the greatest existential threat to the USA”. This mantra has been repeated ad nauseam by innumerable US politicians in recent years.
    Why? NOT because China is a military threat, but because it is the threat of a good example. As a mixed economy – which incorporates tight government regulation in the service of strong socialist principles – China far outcompetes the USA. China EXPOSES the LIE that US crony predator capitalism is the best and only way to go, as was espoused by “end of history” Francis F*ckyou Llama.
    China expert George Koo described the 3 official principles of Chinese foreign policy (proven in practice by their real world interactions):
    – mutual respect
    – peaceful coexistence
    – mutually beneficial “win-win” interactions
    Those Chinese principles THREATEN the defacto US foreign policy approaches which are:
    – Arrogant disrespect and contempt for “the other”. The USA has NO allies, it only has interests.
    – War, war, war (direct or via proxies such as CIA sponsored terrorists/insurgents) to line the coffers of its military industrial complex and bully others into submission.
    – Zero sum game calculus: all interactions MUST overwhelmingly benefit the USA while other parties get screwed eg blowing up the Nordstream pipelines enabled USA to sell very expensive LNG to the Germs who have been forced to deindustrialize and relocate factories to the USA. Only on rare occasions does the other party benefit (incidentally, not intentionally) eg Singapore, whose economic success can be tolerated so long as the USA disproportionately benefits eg naval control of nearby maritime choke points + Singapore being under the yoke of the US financial system. (Singapore’s economic success occurred through its own efforts in the milieu of US indifference, unlike other countries whose development the US actively sabotaged eg North Korea, Venezuela, Cuba etc).
    The Chinese behavior as a respectful, peaceful, helpful global partner therefore undermines the US “rules based (dis)order” imposed by the jackboot of a bullying, violent, exploitative thug.
    How does the Vampire Empire respond? More war, war, war, even potentially nuclear war.

  2. خالد سليم

    2024-01-31 at 13:55

    excellent research, Ben

    • Rubicon

      2024-02-07 at 18:39

      It should be pointed out that Ben Norton is NOT an economist. He’s learned a lot from Dr. Michael Hudson, but he’s miles away from earning a PhD in Finance.
      Keep that in mind.
      What’s most bothersome is that he’s making good money spewing out non-professional statements that may not survive what Hudson is qualified to point out.

      • JonnyJames

        2024-02-08 at 11:59

        Rubicon, as long as a journalist backs up the info and uses credible sources, he or she does not need a PhD in finance to report the facts.

        On the contrary: A PhD in Econ or Finance may well be an impediment to intellectual honesty, as Michael Hudson, Steve Keen and others have pointed out.

        • Eric Arthur Blair

          2024-02-08 at 14:55

          Yanis Varoufakis expressed even more vigorous condemnation of conventional western economics, which he repeatedly said is NOT a science.
          I suspect Rubicon is the same troll who has been using multiple “mainstream” economic pseudonyms (Maynard Minsky Kalecki Galbraith etc… the troll I call Ponzi), an acolyte of institutional idiocy and deceit.
          The vast majority of mainstream economists with Phds from ivy league western universities are abject idiots who have been shown to be wrong, wrong, wrong, over and over again, yet get promoted and celebrated because they spout lies that support neoliberal, neoclassical, neoimperialist, neocolonial, neoconartist propaganda. They gaslight the public into believing the opposite of reality eg that the US economy is doing well, when countless millions of ordinary Americans are falling into destitution.
          Ponzi/Rubicon is cut from the same deceitful cloth and is therefore an abject idiot.
          The only qualification to speak about economics is whether you promote realities based on carefully researched facts and reasoning, the opposite of everything that Rubicon/Ponzi is.

          • JonnyJames

            2024-02-08 at 18:34

            Yes, Yanis knows full well that neoclassical and monetarist economic theory is nothing but ideology that pathetically attempts to “rationalize” oligarchy and neo-feudalism. What he calls “technofeudalism”. Milton Friedman and Paul Krugman are probably the two most famous (or infamous) pushers of what Hudson calls “Junk Economics”. He even wrote a book with that title.

            Varoufakis has also been influenced by Dr. Hudson, who is a mentor to many, Steve Keen included. Steve Keen’s book Debunking Economics is also worth a visit.

  3. Cure E Us

    2024-01-31 at 17:49

    The United States was easy. That is, the selfish, egotistic U.S. ruling class were easy for China to seduce. The American rulership, masters of their cerebral universe – theoretically – were, as they’ve always been, averse to negotiating a living-wage for the American working-class (chattels). Therefore, the venal U.S. chieftains usurped the livelihoods of Americans (without consent) and eagerly traded their technical know-how for the immediate lavish profits derived from low-wage Chinese labor. Now you can understand why the newer maxim: “Land of the Fleeced, Home of the Slave” may have supplanted: “Land of the Free, Home of the Brave.”

    Do you want to know where your money is going? Take a short tour of one of the homes of former Secretary of Education ‘Betsy Devos’: https://www.vox.com/first-person/2018/8/6/17654434/betsy-devos-yacht-mcmansion-hell

    Speaking of education, did you know that Betsy Devos has (ZERO) experience with public schools? https://www.nea.org/advocating-for-change/new-from-nea/5-reasons-betsy-devos-is-bad-for-public-schools

    Betsy’s assignment (Confirmed? Earner? Associate? Connected Potentate…?) , as the Secretary of Education, should clear up any doubt about whether the United States is a meritocracy. Right?

    The United States is a Kleptocracy/Kakistocracy. It is also a society that is designed to incentivize criminal behavior at the highest level!

  4. Eric Arthur Blair

    2024-02-02 at 14:24

    @cure e us:
    “Land of the Fleeced, Home of the Slave”… brilliantly put. Are you the originator of that phase?
    Re: Betsy Devos: she was just as qualified to run public education as Hunter Biden was to run energy policy on the board of Burisma ie. utterly, hopelessly useless and incompetent.
    Her appointment was entirely based on being a member of the criminal Prince* family, just as Hunter was a member of the criminal Biden family.
    And remember her brother Eric Prince (AKA the Prince of Darkness) founded Blackwater, notorious for being given extremely lucrative US contracts to commit mass murder of innocent civilians around the world eg. Iraq.
    Plus ça change, plus c’est la même chose

    • Cure E Us

      2024-02-02 at 20:58

      @ Eric Arthur Blair
      RE: @cure e us:
      “Land of the Fleeced, Home of the Slave”… brilliantly put. Are you the originator of that phase?

      No, but thank you. I just stand on the shoulders of giants, such as: Ben Norton, Chris Hedges, Isaac Newton, Harriet Tubman , Nicolaus Copernicus, Dr. Andreas Noack , Mohandas Gandhi, Martin Luther King Jr., Rosa Parks…

      Adios amigo…

      • JonnyJames

        2024-02-07 at 16:19

        Cur E US and Eric:

        I recall the late journalist, Robert Fisk saying something to the effect that: the US is the most misinformed, under-informed, propagandized nation in the world, (with the UK close behind). Dmitry Orlov said that at least in the USSR, people did not believe Pravda etc., but in the US people still believe NYT, WaPo, Guardian, CNN, Fox, etc.

        Land of Fleeced, Home of Slave reminded me of that. Even many informed and educated people still believe that the US and UK are democracies and respect the so-called rule of law. It is like a bad episode of the old Twilight Zone

        • Rubicon

          2024-02-15 at 16:11

          The latest interview with Dr. Michael Hudson, at one point he talks about what China should “worry about”: http://www.michael-hudson.com. Click on “interviews” & you’ll see “Observer” interviewing him.
          Hudson doesn’t go into detail, but he notes that China STILL holds billions of US Treasuries. Does anyone here, or maybe Ben, want to try to explain this mystery?

    • Eric Arthur Blair

      2024-02-17 at 19:06

      The Devos family was/is also a criminal family, famous for creating the Ponzi Amway scam, which financially ruined many US families.
      Parasites!

  5. browntsunami

    2024-02-02 at 18:12

    Thaks for an article that is clear enough, that, evem for an economic know-nothing, such as myself, to get a sence of how this momentus rise of Chinese industrial base towards superpower status came about, is quite an accomplishment.

    If you could write about how China might weather financial attacks, which is on going and will escallate. Specially how it might compared to Russias amazing resilience from this front. Perhaps, I might gain some insight there as well.

  6. Cynic

    2024-02-04 at 06:00

    Show me what a nation spends on, and I’ll tell you the heart of the nation.

    China builds while USA destroys.

    “The US is the world’s sole military superpower. It spends more on its military than the ten next highest spending countries combined. China is now the world’s sole manufacturing superpower. Its production exceeds that of the nine next largest manufacturers combined.”

    • Cure E Us

      2024-02-04 at 14:40

      Yes, Cynic. Action speaks louder than words. Consider the following:

      The 1883 poem: “Give me your tired, your poor, your huddled masses yearning to breathe free” – a poem written by American Emma Lazarus and etched in bronze and mounted on the Statue of Liberty’s foundation. But, how did the United States regard the poor, huddled, yearning to breathe free, Chinese? Well, President Chester A. Arthur signed ‘The Chinese Exclusion Act’ on May 6, 1882, which prohibited all immigration of Chinese laborers for 10 years. The Chinese Exclusion Act was (the first major U.S. law ever implemented to prevent all members of a specific national group from immigrating to the United States), and therefore, helped shape the twentieth-century race-based immigration policy. https://en.wikipedia.org/wiki/Chinese_Exclusion_Act

  7. JonnyJames

    2024-02-07 at 16:12

    Great research and article from Ben, and comments too! (as usual)

    Side note: With so many other important issues going on, Julian Assange is still being held at the max sec. HMP Belmarsh in the UK. Tony Bliar has made millions since his tenure as PM.

    Instead of “making a killing”, Blair et al. should be imprisoned in Belmarsh, while Assange should be free continuing to publish and report high crimes of national governments. The “rule of law” is made a mockery of daily.

  8. Elizabeth Anne Keenan

    2024-02-28 at 21:18

    One question, how do they plan on restricting AI?
    Well lots of questions including how fast China’s bank will doom the petro-dollar.

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