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Who dominates in the industrial world competition?

There is a real match for industrial supremacy in the world between Europe, the United States, Japan and China, and the trade war is one of its avatars. Because relations stretched 17 years after China’s shattering entry into the WTO. An entry that has dramatically changed the global industrial geography.

The first tipping point is 2007 when China with an industrial value added of $1,150 billion passes Japan. It is then 2010, where the industry of the Middle Kingdom eclipses that of the United States and is approaching the symbolic threshold of the $2 trillion of wealth created. It is finally, two years later, the European Union which is overflowed.

China then takes the place of industrial number 1, a position it still occupies today and has consolidated over time. Chinese industrial products now account for 26% of the planet’s total production. The European Union is in second place with 19.3% and is nearly two points ahead of the United States. A notch lower Japan is behind and closes the market with 8.4% of the industrial wealth generated.

China and its powerful domestic market

A priori the match is folded. This ranking deserves to be nuanced, however, because the masses are in part a reflection of the strength of the domestic market that primarily benefits local industry: China is 26% global value added but also nearly 19% of the world’s population.

At the other end of the spectrum, Japan may be producing only 8.4% of manufacturing value added but with a Japanese population that accounts for less than 2% of the world’s population. In other words, the report is not the same. This is why if we consider industrial production per capita, the situation changes completely.

The 1.4 billion Chinese produce less than $2,550 in manufacturing value added per capita. The Europeans double it with nearly $5,000, the Americans even more until the Japanese where the bar of $8,000 is exceeded, it is more than three times and if Korea, another great industrial power, had been added she would be even higher.

To avoid biases related to the diversity of the demographic and productive structures of each country, the added value generated in the industry at large (that is to say including construction) reported this time to the numbers of employees in the industry (in other words, productivity) helps to refine the diagnosis. The differences then vary from simple to five times between China and the United States, passing by a single triple with the European Union.

Japan wins the game

Obviously, China is not yet boxing in the same category as the other major industrial powers in terms of technological intensity and level of range. The density of industrial robots is an illustration of this. A country’s rate of robotization is partly explained by sectoral factors since robots are more prevalent in technology-intensive industries. However, with 68 robots for 10,000 industrial jobs, China is below the world average.

Far behind the major European economies, the United States, Japan or Korea are at the top of the rankings. But everything is going fast with China, and the boom in the density of robots is the most dynamic in the world. If Asia’s top economic power ranks only 23rd in the world, the government aims to bring its economy into the top 10 most automated nations in the world by 2020.

Ultimate justice of the peace, the external performance measured by the coverage ratio, that is to say, the ratio between exports and imports of goods; less than 100, it bears witness to an arch-deficient foreign trade in the United States. The European Union is slightly in the surplus and then it goes up to China with a repositioning of the low end (mainly in the consumer goods of the textile industry) in favor of high-end (mainly the capital goods of the electronic industry).

If we take a closer look, it’s finally Japan that wins the game. The match is then more balanced between the United States and the European Union and if China is not yet fully part of the same division, it could quickly shake the positions.

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Ngonah Yaya

My name is Ngonah Yaya from Kenya, I'm a content writer and Author on Afinik.com. I like football, wrestling, and reading. I'm a graduate with a Bachelor of Education Arts in English and Literature, University of Nairobi, Kenya Check my article here on Afrinik. Email: Ngonah@afrinik.com

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