China dethrones the US.
The Asian country became the world's largest industrial power in 2010, a decisive step towards becoming the planet's leading economy.
China has taken another step towards becoming the world's largest economy, overtaking the United States. IHS Global Insight, a leading global strategic think tank, has just released a study showing that China's industrial production accounted for 19,8% of global manufacturing capacity in 2010, compared to 19,4% for the United States. According to the institute, the added value of China's industrial production reached US$1,99 trillion in 2010, compared to US$1,952 trillion for the United States. "American industrial production showed a sharp recovery in 2010, with growth of 12,6% in added value," states IHS. However, China's expansion and the appreciation of the yuan have given the country the conditions to surpass the United States.
Market analysts and economists predict that the Asian country will become the world's largest economy in 2020. However, the United States' slow recovery from the recession, which began in 2008, and China's continued economic expansion, with growth rates consistently close to 10%, could shorten the timeframe for overtaking it.
However, there are some question marks surrounding China's rise. One is the political situation. How long will the Communist Party maintain absolute control over a society that is rapidly discovering the power of consumption and increasingly opening itself to the outside world? Another issue concerns sustainability. China's rapid growth has caused enormous damage to the environment.
The IHS study shows, however, that productivity remains far superior in the United States: "With 11,5 million workers, the American industrial sector produces almost the same value recorded by the Chinese industrial sector with 100 million workers," the report states.