After 110 years, the U.S. loses its manufacturing crown

Posted by scapozzola on 06/21/2010

As Peter Marsh reports in The Financial Times, the United States has been the world’s biggest manufacturing nation by output for 110 years.  However, the U.S. is now  "poised to relinquish this slot in 2011 to China." This is unfortunate news, but it shouldn't come as a total surprise.  The U.S. trade deficit with China has mushroomed since China's 2001 entry into the WTO.  And, Beijing utilizes a variety of predatory and illegal trade practices, including currency manipulation, in order to boost its manufacturing exports. One of Beijing's most egregious methods of cheating is a continued and deliberate undervaluation of its currency, the Yuan.  Although this practice is illegal under the rules of world trade, China continues to rig its currency--and reaps the obvious rewards, as seen by its huge increase in manufacturing output and exports. Simply put, currency undervaluation helps make China's exports artificially cheap, and the rest of the world doesn't like it, either. Because Beijing faces constant pressure to revalue its Yuan, they have, on occasion, pretended to make revisions.  This weekend, China yet again suggested that it will be making "adjustments" to its currency, but quickly explained that this would only occur "gradually." Reuters reporters Paul Eckert and Doug Palmer have been tracking the story closely and filed a report that quoted AAM Executive Director Scott Paul on China's latest half-effort: "Unless the move is rapid and significant, China's announcement is nothing more than a cynical ploy ahead of the G20 and in the wake of mounting congressional pressure." Bottom line: China makes a lot of empty promises.  It buys them time while U.S. manufacturing continues to fall down the ladder. Read more.

3 comments

[...] may well surpass

[...] may well surpass America as the world’s leading manufacturer next year. Many Americans think we’ve already lost [...]

[...] may well surpass

[...] may well surpass America as the world’s leading manufacturer next year. Many Americans think we’ve already lost [...]

Scott Paul: China’s Currency Charade wrote 4 years 5 weeks ago

[...] may well surpass

[...] may well surpass America as the world’s leading manufacturer next year. Many Americans think we’ve already lost [...]

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