CHINA BECOMES THE WORLD’S LEADING MANUFACTURER
By Thomas Clouse
Ending the more-than-100-year reign of the United States as the world’s top producer, China became the world’s largest manufacturer by output in 2010.
Jiabao talks down growth
US-based consulting firm IHS Global Insight estimates that China produced goods worth $1.995 trillion, representing 19.8% of global production. The US produced slightly less, with $1.952 trillion worth of goods and 19.4% of the total production. Overall, IHS Insight estimates that world production increased by 9.7% in 2010.
China continues to experience friction with major trade partners, however, despite posting a $7.3 billion trade deficit in February. According to the customs office, the value of imports climbed 36% year-on-year, while the value of exports rose only 21.3%. The deficit, China’s highest in seven years, has done little to reduce tension with the United States, where lawmakers in February reintroduced legislation to tax Chinese imports unless the renminbi appreciates in value. Last year, the US trade deficit with China rose to a record high $273 billion.
At the country’s annual National People’s Congress, premier Wen Jiabao outlined China’s goals for the coming five years. In his report, Wen lowered the annual GDP growth target to 7% and called for “significant improvement in the quality and performance of economic growth.” Several of the policies introduced a focus on boosting living standards and strengthening social welfare services. Wen’s plan calls for more investments in education, healthcare and low-income housing. The plan also promotes clean-energy production.
Passenger vehicle sales in China grew by only 2.6% in February, the lowest rate in almost two years, according to the China Association of Automobile Manufacturers. Government subsidies for small vehicle purchases expired at the end of last year, dampening sales. Some cities in China have also limited the number of new car registrations. The slower growth comes after several years of rapid increases.