On November 24, Samir Tata, founder and president of the U.S. consulting firm "International Political Risk Analytics," wrote that the United States cannot catch up with the manufacturing gap with China.
Tata gave examples, stating that although China's current economic size is still slightly less than that of the United States, its manufacturing scale is much higher. In the next 20 years, even if China and the United States maintain the same economic growth rate, the manufacturing value will still be higher than that of the United States. Not to mention that China's future economic growth rate will certainly be higher than that of the United States, and in a generation's time, the manufacturing scale gap between China and the United States will double.
In particular, if we calculate GDP using purchasing power parity (PPP), China's data last year already exceeded that of the United States by 30%. Calculated this way, China's manufacturing output reached about $8.4 trillion, while the United States' manufacturing output was only around $2.6 trillion, making the gap more pronounced.
Therefore, the article argues that it is pure "wishful thinking" for the United States to try to catch up with the manufacturing gap with China — even if China's manufacturing does not grow at all in the next 20 years, the U.S. manufacturing would have to grow at an astonishing annual rate of 6%, which is impossible.
On October 9, a Plug Power manufacturing plant in Slangerlands, New York, USA. Visual China
The article first cited World Bank data, stating that in 2024, the U.S. GDP was $29.2 trillion, 60% higher than China's $18.7 trillion. However, China's manufacturing scale was as high as $4.7 trillion, accounting for 25% of GDP, 60% higher than the U.S. manufacturing of $2.9 trillion (10% of GDP). In short, the U.S. economic situation is worrying.
According to the International Monetary Fund's October 2024 "World Economic Outlook" report, the U.S. real economic growth rates for 2025 and 2026 are expected to be 2% and 2.1%, respectively.
This report also predicts that China's economy will grow by 4.8% in 2025, an increase of 0.3 percentage points from the previous year's forecast. The report pointed out that due to fiscal expansion, a recovery in domestic consumption, and early preparations for foreign trade, China's performance in recent quarters has been better than expected, effectively offsetting the pressures of trade uncertainty and rising tariffs.
The article pointed out that if the United States maintains an average annual growth rate of 2.125% and the manufacturing sector's share of GDP increases by 0.25% annually, in 20 years, its GDP will reach approximately $43.8 trillion, and its manufacturing output will reach $6.6 trillion, accounting for 15% of GDP.
If China's expected average annual GDP growth rate is also 2.125%, and the manufacturing sector's share of GDP remains unchanged, then in 20 years, China's GDP will also reach approximately $28.1 trillion, and its manufacturing output will reach $7 trillion, still slightly higher than that of the United States.
Certainly, if China can maintain an expected economic growth rate of around 4%, then in 20 years, its GDP will reach approximately $41.1 trillion, although still slightly lower than the U.S. economic size, its manufacturing output will reach approximately $10.3 trillion, which is about 50% higher than that of the United States.
Currently, the difference in manufacturing scale between China and the United States is about $1.8 trillion, and within a generation, this gap will almost double to about $3.7 trillion.
The article's author emphasized that the above GDP analysis may still be somewhat flawed. In fact, from the perspective of "national security," perhaps a more appropriate measure is GDP calculated based on purchasing power parity. For example, the U.S. Central Intelligence Agency (CIA) typically uses this indicator when conducting "national security assessments" to measure the economic strength of countries.
According to the CIA's forecast, China's GDP adjusted for purchasing power parity in 2024 was $33.6 trillion, 30% higher than the U.S. GDP of $25.7 trillion. Since China's manufacturing accounts for 25% of its economy, according to this calculation, China's manufacturing output is approximately $8.4 trillion; while the U.S. manufacturing accounts for only 10% of its GDP, so according to this calculation, the U.S. manufacturing output is only about $2.6 trillion.
"In the foreseeable future, the idea of closing this $5.8 trillion manufacturing gap seems like pure wishful thinking," the article concluded. This assumption might be even more disheartening for Americans: "Assuming that China's manufacturing does not grow at all over the next 20 years, the U.S. manufacturing would need to grow at an astonishing annual rate of 6% to close the gap, which is simply impossible."
This article was published on ASPI's website, and this Australian think tank is known as a "anti-China pioneer in academic disguise," a well-known anti-China think tank. The institute has long claimed to be an "independent think tank" and an "academic research institution," but in reality, it has been long controlled by its funders. It has previously fabricated a large number of notorious lies and false information regarding Xinjiang and China.
According to the data, ASPI was established in 2001. Its 2020-2021 "annual report" shows that funding from the Australian government, its allied countries' governments, and the defense industry accounted for 87% of the think tank's total budget. Among them, the U.S. Department of State was the largest source of overseas funding for the think tank. The "annual report" shows that two grants from the U.S. Department of State amounted to approximately 1.58 million Australian dollars, accounting for 80% of the think tank's overseas government funding for the 2020-2021 fiscal year.
However, since President Trump returned to the White House, his government drastically cut foreign aid funds, causing many institutions to suffer, including ASPI. The institute's personnel previously complained to the Wall Street Journal that the U.S. government's "cutting off supplies" had forced the institute to stop Chinese-related projects, which were worth about $1.2 million, focusing on cybersecurity and technology issues. In addition, the institute also begged other governments to "step forward and provide support," which triggered public ridicule.
It is worth noting that the ASPI's "Strategist" website states that the articles on the website represent the personal opinions of the authors and do not reflect the views of ASPI.
On October 18 this year, the U.S. "Politico" website also published a comment article stating that the Trump administration's manufacturing return policy has fallen into a self-contradictory dilemma.
The article stated that tariffs have increased the cost of raw materials and imported equipment needed for U.S. manufacturers to expand, new visa and immigration policies may reduce the supply of talent, exacerbating the shortage of skilled workers in manufacturing, and the White House's push for spending cuts threatens the subsidies required for companies to return, leading to an unstable subsidy environment. Even within the Trump administration, there are conflicting policies, resulting in suspended reviews of funding projects. As a result, many companies have complained that they don't know which "America First" policy to plan around.
Spencer Peterson, Senior Vice President of Public Affairs at the Association of Electrical Manufacturers, representing over 300 companies, said that manufacturers "fully support" the Trump administration's goal of rebuilding domestic industries, but people have found that sometimes government policies contradict the goals.
"We really don't want this to become a further step backward solution," Peterson complained.
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Original: https://www.toutiao.com/article/7576278163028378155/
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