CHINA’S MANUFACTURING SHARE TO HIT 45% BY 2030 AS U.S. FALLS TO 11%
China to account for 45% of the world’s global industrial production by 2030 as US falls to 11%
The U.S. China Economic and Security Review Commission held its first hearing of 2025 and perhaps the most eye-opening, if not jaw dropping, piece of information to come out of it was a panelist who cited an October 24, 2024 study from Saudi Arabia. It spells disaster for U.S. manufacturers.
Back then, the United Nations Industrial Development Organization in Riyadh released a 50-page report titled
“The Future of Industrialization”. In it, all roads point East. It speaks to what Chinese leader Xi Jinping has often been quoted as saying, that the West is in decline and Asia, led by China, is rising. The charts inside that report are an indictment of globalization:
the West will make nothing. And China will be happy.
China is forecast to account for 45% of the world’s global industrial production by 2030. That growth comes at the expense of the West, which is projected to drop to 11% of global production in the next five years.
All major industrial power centers cede ground to China by 2030, according to the United Nations study. Japan went from 11% of world industrial production in 2000 to a forecasted 5% by 2030. Germany will drop from 8% in 2000 to 3% by 2030. Other EU nations fall off the map, lucky to account for just over 1% in 2030. There is a clear generational decline for the old industrial powers in favor of China. Even India goes from 2% in 2000 to just 3% in 2030.
The United States was the largest manufacturing power in the world in the year 2000, accounting for 25% of global industrial output. Members of the Coalition for a Prosperous America know that date well. China was in talks with Washington and Geneva to join the World Trade Organization (WTO). At the time, the country was basically known for making Christmas ornaments and Happy Meal toys for the U.S. market. But on Dec. 11, 2001,
China joined the WTO and on Dec. 27, 2001,
China gained Permanent Normal Trade Relations (PNTR) status with the U.S. cutting tariffs three-fold and setting the groundwork for massive corporate outsourcing, partnerships, and investments in what is now the world’s second largest economy. China no longer just makes things for American brands, they have acquired American brands like Lexmark, Lenovo and Smithfield Foods, and created new ones with global appeal like TikTok, Temu and Shein.
The Commission’s Feb. 6 hearing was called
“Made in China 2025: Who is Winning?” Commission Chair Reva Price asked the panel to give their assessment. “We heard a lot of ‘glass half empty/glass half full’,” she said, asking the four panelists to pick a side. It’s not a knock-out, but China is winning on points.
“Who is doing a lot of the winning right now, continuously, is China,” said
Tim Khang, director of global intelligence at
Strider Technologies in Utah. [
Testimony] “However, I still believe that the United States is ahead.”
We can’t make without China. But China can make without us.
– Emily de La Bruyère, Co-Founder of Horizon Advisory
Hanna Dohmen, a research analyst at Georgetown University’s
Center for Security and Emerging Technology [
Testimony] said that the U.S. was “biding time” on semiconductors thanks to the CHIPS & Sciences Act.
Last year, the U.S. recorded a
$17 billion trade deficit in semiconductors. Imports rose from $72.51 billion in 2023 to $81.94 billion in 2024 across the full spectrum of microchips, including both advanced and legacy chips.
“If you center Made in China 2025 strictly around manufacturing, China is winning,” said
David Lin, senior director at the
Special Competitive Studies Project [
Testimony]. “If we can lead with innovation and invest in manufacturing, that can push us ahead,” he said.
The Made in China 2025 program is a state-backed industrial policy launched in 2015. It targets sectors of the advanced manufacturing economy from biotech to semiconductors, with the goal of reducing dependence on Western imports. This goal is notable, in hindsight, because it came at a time when there was no indication the U.S. would ever impose tariffs on China.
Bruyère from
Horizon Advisory said the two systems – China and the U.S. – were fundamentally incompatible in the post-2000 WTO trading system. [
Testimony]
“The U.S. should revoke PNTR for China,” she said, recommending “vast expansion of domestic content requirements” and “excluding China from government incentive programs” like the Inflation Reduction Act. She told the Commission that the U.S. will never out-subsidize China.
“The U.S. government cannot pick winners and losers, but it can create the infrastructure for domestic manufacturing to survive,” she said. “Beijing has control of the battlefield and the U.S. needs to think strategically. Our ability to do so will determine where the future is made.”
There was broad agreement among panelists that export restrictions of certain advanced technologies to China have forced Chinese companies to think more creatively and accelerated domestic innovation, including building copy-cat tech platforms like the new DeepSeek AI that disrupted OpenAI’s ChatGPT subscription service.
Commissioners asked about working with allies, a favorite adage of the Biden administration. Trump has often been accused of going it alone on trade matters, with many on Capitol Hill scared that he will strain relations with key allies, such as
Mexico, Canada, Japan and the European Union, the second largest source of the U.S. trade deficit after China.
“We have made an effort to bring our allies along and have failed in that effort,”
Bruyère told them.
Then, sounding a bit like Trump, who has advocated for charging tariffs for companies to access American consumers, she said, “We have the world’s largest market. That’s a negotiation power. But the longer we wait, the more we lose that power.”
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