Much has been written about how the USA is becoming less important at the expense of China and the developing world. The Chinese save money, Americans don't. China is growing, the USA is not. The USA is losing manufacturing jobs, everything seems to be made in China these days... Or is it?
Lost in all of the Anti-American pessimism? Realizing that China does NOT lead the world in Exports or manufacturing at this time.
The most updated data including the US (granted it's only 2004) found at nationmaster 2004 shows the USA leading the world in manufacturing with roughly 25% of global output.
1994 (10 years prior)
The USA still leads the world in manufacturing, although yes, the trend is moving downward. The interesting thing though is that the other leading economies, Japan, Germany and China are also losing world manufacturing market share. If all you did was watched CNBC you'd think that manufacturing jobs are going straight from the USA to China and Mexico (Mexico is losing world market share as well).
Are low skilled factories being moved out of the first world to countries with lower wages and less (manufacturing) regulation? Certainly and I believe that trend will continue over time (as it did in America in the early 20th century). As these poorer economies mature, and people go from factory workers, to higher skilled labor and professionals, wages increase and the jobs move on to the lower cost markets (as long as the capital structure is easy to move).
Although China's urban centers are visibly more prosperous, China still has hundreds of millions of people living in dirt poor rural areas to carry the manufacturing torch for decades. Once the standard of living (and wages) increase, and the manufactory jobs will move to the poorer areas in South East Asia and Africa. That's longer term, but I believe people alive today will live to see that.
Before we move on to what America makes, let's look at the world Export leaders as of 2008. List_of_countries_by_exports is based on the CIA World factbook.
2008 World Export Leaders
#1 Germany (thought it was China huh?)
#3 USA (a close 3rd place)
You mean the Chinese don't lead the world in Exports? America is in 3rd place - we don't make anything here do we?
I'd strongly suspect a lot of Germany/Japan's exports are based upon the expensive (and inexpensive) cars they make and ship around the world. Remember, their countries' National Defense is highly subsidized by the USA (along with South Korea) and they don't have to worry about that. They can focus on making the cars that the world drives.
What does the USA Produce?
People like to ask, what does the USA produce (or export) anyway? It's true we have mainly a service based economy, but we do make things.
Having high skilled labor use capital intensive machinery to produce an expensive SUV, makes up for all kinds of cheaper goods made by lower skilled labor.
The USA is a leader in farming/Agriculture, Chemicals/Fertilizers, farming equipment (Equipment in general), engines, airplanes, defense, telecom, tech, and media. We export Hollywood as the world listens to our music and watches our movies. We have Silicon Valley, Wall Street, and the breadbasket of the world.
A lot of Americans are angry at their government and losing faith in this country as a whole. It is hard to look at the data coming out as positive unless you are high on CNBC green shoots Kool Aid. China is doing a lot of things right and we have made our fair share of mistakes. With that being said, it's not too late to fix our problems.
I'm bearish in the short/intermediate term as we've been reluctant to face up to our mistakes and make hard choices (more debt to solve a debt crisis). Longer term, the country that I love is not a lost cause and it is worth saving. It will require hard work and sacrifice and I hope you are ready for the challenge. Let's just hope we can keep the government as a player and not a referee, and keep America as the land of opportunities and not the land of guaranteed entitlements.