The manufacturing dominance that the United States has held for the past century may be coming to an end.
According to Global Insights, last year the U.S. was still easily in the top spot, accounting for a fifth of the total. China, meanwhile ranked second with 13.2 percent.
Now the company's estimates show that next year China will account for 17 percent of manufacturing output, and the U.S. will make up 16 percent.
Data from Global Insight show the U.S. will have to return the No. 1 position to China, which, according to economic historians, ranked first in manufacturing for nearly 1,800 years up to about 1840, when Britain became the world's biggest manufacturer after its Industrial Revolution.
"China is by far the world's biggest manufacturer of steel. Last year it made more than one third of the 3 billion tons of steel produced in the entire world," says Peter Marsh, a manufacturing editor for the Financial Times, who recently spent two weeks visiting some 15 manufacturers in China.
Global Insights' predictions said the U.S. would retain the top spot until 2013. But the economics consultancy now says a large downward revision in likely output this year and next is expected to cause the U.S. to fall from the No. 1 spot more quickly than originally had been expected.
Marsh notes that China's manufacturing prowess is growing rapidly and that the country is using technology increasingly similar to more developed nations.
For example, Anshan Steel, which began operating in 1916, initially benefited from technologies brought by the Japanese. After the communist revolution, the government relocated the company's senior managers to other factories, where they shared their knowledge.
Last year, Anshan produced 16 million tons of steel, the second-largest output in China, and the seventh-largest in the world. The company employs 50,000 people and expects to reach 35 million to 40 million tons next year, an output that would easily make it one of the top five steel producers globally.
"We hope we will become the most competitive steelmaker in the world's largest steel producing country. At the end of this round of (economic) adjustment, the best steelmakers will emerge stronger and the weak ones will disappear," a company executive says.
Expanding abroad is Anshan's next goal, one that may well be aided by Indian steel giant ArcelorMittal, which is currently pursuing an alliance that may include swapping stock.
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