A significant portion of Chinese (value-added) manufacturing statistic has been affected by a 25% rise in the value of the RMB, this has “skewed” the “growth” of Chinese manufacturing in comparison to the United States.
In addition, many US manufacturing companies have ‘transferred’ their tax homes and headquarters to other nations- even whilst keeping their manufacturing operations in the United States. These moves- have, however, resulted in the manufacturing numbers of those companies from being removed from the list of US manufacturing- thus- reducing the absolute and percentage of American manufacturing- in when in fact- those factories remain in the United States.
With Chinese statistics being more hazy, less transparent and accurate than American figures, a significant amount of Chinese “industrial” economy gets lumped in with its “manufacturing” numbers- thereby significantly “inflating” the Chinese manufacturing statistics. For example, a new power plant is opened in china and produces electricity- this is industrial and not manufacturing- but increasingly those numbers are being conflated making Chinese manufacturing growth and size overstated.
Manufacturing employment in American remains low mainly due to technology and robotics rather than outsourcing.
A higher percentage of American manufacturing has more or all of its component parts also made in the USA, whereas, a higher percentage of Chinese manufactured goods has segments of imported parts- yet fully counted as wholly manufactured in China- this also is not accounted for and would, in percentage terms, reduce the size (however measured) of the Chinese manufacturing base.
Many more American manufacturing workers are much more diverse than their Chinese counterparts- in a study last year (2015)- over 29,000 American workers in warehouses were actually doing manufacturing work- assembly line, customizing products- but their value added was NOT included in American manufacturing statistics because they were initially labelled as warehouse employees and not manufacturing.
In terms of manufacturing employment, it’s quite obvious that US workers are many times more productive than their Chinese counter-parts- thus- less workers needed to match the same of output in China, as well as much more automation in US manufacturing- compared to China. Thus comparisons of manufacturing employment does not fairly reflect on the “state” of American manufacture
ng. In fact, American manufacturing workers have the highest world percentage of college graduates- i.e. 29% of all American manufacturing employees had a college degree, in addition- among the highest wages- 2015 average was $37 per hour- gross pre-tax/no overtime/ average yearly salary being $71,000 USD.
Factory workers in China, on the other hand, remain very poor paid- average gross yearly salary of less than $2,000 USD, less than 1% having college degrees and often work in toiling dangerous conditions with lack of benefits, holidays, health insurance, etc.
In sum, manufacturing experts, who acknowledge the difficulty in measuring manufacturing in the United States-which is more complex and diversified than in China, – still agree that American manufacturing continues to be larger than China in all important aspects. For Americans, this fact is often masked by the fact that American manufactured products are much less “visible” to the general population than Chinese manufactured products- i.e. How many ordinary Americans see or notice a nuclear generator produced in the US, as opposed as going to Wal-Mart and see all the cheap plastic products and t-shirts made in China? These “hidden” American manufactured goods contributes to the general opinion in America that everything is now made in China and that America has lost its manufacturing base.
Nothing could be further from the truth.
(this author is currently doing a project in Shanghai China).
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