Just how quickly has China become a manufacturing power? In this video, Assistant Vice President and Economist Yi Wen examines the rise of China’s manufacturing and compares it to the manufacturing output of the U.S., Japan, Germany and Italy. This video is part of the St. Louis Fed’s Dialogue with the Fed series, and a transcript of the video is below.
If you look at, this is a figure about the value-added manufacturing output produced by the top five industrial powers. The blue line's the U.S. The yellow line's Japan. The green line's Germany. The brown line's Italy. And China's red. So as you can see, in the '70s China was essentially producing very tiny amount of industrial manufacturing goods and U.S. was several hundredfold of China. But starting around 1980, OK, China start to take off. And gradually accelerate and surpass all the industrial powers one by one and ultimately overtake U.S. in around 2010. OK. And if you look at a trend maybe China is going to collapse, but you could look at a trend maybe somewhere China is potentially able to produce manufacturing goods twice as large as U.S. or even more. OK, so if that is the bubble, every nation want to have that bubble and every nation should have that bubble. So therefore by looking at this picture, it's unlikely that China's rise is purely a bubble.