After China entered the World Trade Organization in late 2001, its manufacturing output grew rapidly, as global companies shifted manufacturing from higher-wage countries to China.
Then, in 2010, China overtook the United States to become the world’s largest manufacturer by output.
In 2019, China accounted for 28.7% of global manufacturing output, surpassing the United States (16.8%), Japan (7.5%) and Germany (5.3%), according to information released by the U.S. International Trade Commission (USITC).
China’s importance in the world market for manufactured products also increased considerably.
In 2002, around 8.9% of global manufactured imports came from China.
Already by 2015, this percentage almost doubled to 17.7%. In 2020, after a modest decline between 2016 and 2019, the share recovered to the 2015 level.
In the period 2002-2020, China’s share as a source of world imports of capital and intermediate goods increased faster than its share of consumer goods.
The global importance of China’s high-tech and medium-high-tech manufacturing sectors grew more than that of its medium-low and low-tech sectors.
Manufacturing
According to the USITC, these trends can be attributed to the structural changes taking place in China’s manufacturing industry, driven by multiple factors such as rising labor costs, the development of domestic supply chains, and deep integration into global and regional production networks.
In addition, Chinese manufacturing also experienced technological upgrading during this period, influenced by increased foreign investment and Chinese government policies favorable to technologically sophisticated industries.
Almost every country in the world depends to some extent on Chinese manufactured products.
Due to geographic proximity and/or close economic ties, countries in the Asia-Pacific region, as well as some countries in South America and sub-Saharan Africa, sourced 30% or more of their manufactured imports from China in 2020.
USTR indicates that these countries include Vietnam, Japan, Australia, Indonesia, Peru, Chile, Ethiopia, Democratic Republic of Congo, and Nigeria.
The United States sourced more than 24% of manufactured imports from China during 2015-18; the share declined to 21% in 2020.
For the European Union, the share was over 25% during 2015-2019, rising to 27% in 2020.
