Reasserting manufacturing supremacy - America's difficult path to exploration
For many years, the United States, as the world's largest economic power, has been actively exploring ways to revive its domestic manufacturing industry in order to regain its dominance in the industrial field. Since the Obama administration proposed the "U.S. Manufacturing Revitalization Framework" in 2009, successive administrations have spared no effort to promote the reshoring of manufacturing and adopted a series of policy measures.
On the surface, U.S. manufacturing appears to be making a comeback, with both employment and output growing. However, it is not difficult to find that this manufacturing "revival" has not achieved the expected goal, and it is not so much a successful revival as a difficult exploration.
The problem of the hollowing out of the manufacturing industry lingers
Looking back at the development of the American manufacturing industry, it is not difficult to find that its once glorious status is long gone. In the middle of the 20th century, the U.S. manufacturing industry once dominated the national economy, and the number of employees and output value ranked among the top in the world. However, with the intensification of the global trend of industrial transfer and financialization, the U.S. manufacturing industry is gradually declining and entering the stage of "hollowing".
Data show that in the 1950s, the number of manufacturing jobs in the United States was as high as 20 million, accounting for one-third of the total employed population. But by the beginning of the 21st century, that number had fallen to 14 million, or about 10 percent. The share of manufacturing output in GDP also fell from 28% in 1953 to just 10.3% in 2022.
This phenomenon of "hollowing out" of the manufacturing industry has not only brought about the loss of a large number of jobs, but also led to the decline of the entire real economy. The United States has to face a series of severe challenges, such as an imbalance in its industrial structure and unbalanced regional development.
In order to reverse this situation, successive governments have successively introduced a series of policies and measures to revitalize the manufacturing industry. The Obama-era "U.S. Manufacturing Revitalization Framework", the "America First" policy of the Trump era, and the Biden administration's "Rescue Plan" and "Inflation Reduction Act" have all made manufacturing a top priority.
Regrettably, even with the government's massive financial investment, the hollowing out of the manufacturing sector is still difficult to cure. Judging from the data, the share of manufacturing in GDP is still declining, and even if it picks up in 2022, the overall trend is still worrying.
Industrial transformation and upgrading has a long way to go
Faced with the stubborn problem of "hollowing out" the manufacturing industry, the U.S. government realized that it was difficult to make breakthroughs by relying solely on policy support. As a result, they began to seek industrial transformation and upgrading, and sought new development momentum.
Specifically, the U.S. manufacturing industry is undergoing a metamorphosis from traditional manufacturing to high-end manufacturing. On the one hand, they have sharply reduced their investment in low-end manufacturing, and instead focused on high-value-added aerospace, new energy, semiconductors and other fields. On the other hand, they are also increasing their investment in the research and development of advanced manufacturing technologies, and strive to make breakthroughs in digitalization, intelligence, and green manufacturing.
Boeing, for example, has plummeted its position after a series of product quality and safety incidents. However, the company did not give up, but increased the layout in high-end fields such as avionics and spacecraft, and gradually got rid of the excessive dependence on traditional civil aircraft.
At the same time, the U.S. government is also significantly increasing its support for key areas such as semiconductors and clean energy. The promulgation of the "CHIPS and Science Act" has injected new vitality into the local semiconductor industry. The Inflation Reduction Act (IRA) points the way forward for the development of the clean energy industry.
This trend of transformation and upgrading has undoubtedly brought new hope for the future development of the American manufacturing industry. However, we must also be soberly aware that this road of transformation will not be achieved overnight, and requires long-term accumulation and efforts. At present, although the competitiveness of the U.S. manufacturing industry in the high-end field has improved, the gap between it and the Asian manufacturing power cannot be ignored.
The pattern of the global industrial chain is changing
At the same time, the reshoring of U.S. manufacturing has also changed the pattern of the global industrial chain to a certain extent. As the world's second-largest economy, China has long been a major trading partner and manufacturing supplier to the United States. But with the reshoring of U.S. manufacturing, this pattern is changing subtly.
On the one hand, the United States is sharply shrinking its purchases of Chinese manufacturing. The implementation of policies such as the Made in America Act, which requires that products procured by the U.S. government must be made in the United States, has undoubtedly had a direct impact on China's exports. On the other hand, the United States is also cutting off the channels for Chinese companies to participate in the global industrial chain through technological blockade and export control.
This trend of "de-globalization" has not only brought great pressure to China's manufacturing industry, but also affected the industrial pattern of the whole of Asia and even the world. Japan, South Korea and other traditional allies of the United States have also felt the competitive pressure from the United States and are actively seeking the revitalization of the local manufacturing industry.
Overall, the reshoring of U.S. manufacturing has undoubtedly had a profound impact on the global industrial landscape. But we should also realize that this is not an overnight process, but a difficult and complex road of exploration. The U.S. faces many challenges in this manufacturing renaissance, and the road ahead is still bumpy.
Seize the opportunity and meet new challenges
For China, the reshoring of U.S. manufacturing undoubtedly poses a huge challenge. But we should also see the opportunities that lie within.
First of all, China's manufacturing industry should seize the opportunity of the United States to further accelerate the pace of industrial upgrading. In recent years, with the strong support of national policies, the mainland manufacturing industry has realized the transformation from low-end manufacturing to high-end manufacturing. Industries such as industrial robots and new energy equipment have become the new engine of China's manufacturing industry.
We should further give full play to our manufacturing foundation and innovation advantages, and achieve breakthroughs in key areas of the future manufacturing industry. At the same time, we should also make full use of the opportunities brought about by the restructuring of the global industrial chain and take the initiative to occupy a more favorable position in the new pattern.
Second, China should give better play to its regional advantages and promote the coordinated development of manufacturing in different regions. In the face of the challenges brought about by the reshoring of the U.S. manufacturing industry, we cannot respond to it in general, but must adapt measures to local conditions and implement policies according to the industry.
The eastern coastal areas should further accelerate industrial transformation and upgrading, and transform to high-end manufacturing and modern service industries. The central and western regions should give full play to their cost advantages and undertake some labor-intensive low-end manufacturing industries. Through regional coordinated development, the overall competitiveness of China's manufacturing industry will be comprehensively improved.
Thirdly, the mainland should also increase investment in the cultivation of manufacturing talents to accumulate strength for future development. With the transformation of the manufacturing industry to high-end, the demand for high-quality technical talents will become more and more urgent. We should take the initiative to adapt to this trend, and cultivate more professionals who master advanced manufacturing technology by improving the vocational education system and strengthening the integration of industry and education.
Only with the support of strong talents, China's manufacturing industry can be invincible in the fierce international competition. At the same time, we must also take the initiative to embrace new technologies such as digitalization and intelligence to improve the overall efficiency and competitiveness of the manufacturing industry.
Finally, China should further deepen its opening-up and actively participate in the restructuring of global industrial chains. In the face of the impact of the reshoring of the U.S. manufacturing industry, we must not rest on our laurels and work behind closed doors, but must take the initiative to embrace change and strengthen cooperation and exchanges with countries around the world.
Through the combination of "bringing in" and "going out", China's manufacturing industry will surely find a better development path in the new global pattern. We need to adhere to the concept of open and inclusive development, and work with all parties to build a fairer and more reasonable global industrial chain system.
In short, the reshoring of U.S. manufacturing has brought unprecedented opportunities and challenges to China's manufacturing industry. We must maintain strategic focus, unswervingly promote the high-quality development of the manufacturing industry, and strive to write a more brilliant chapter in the new era.
Only in this way can China's manufacturing industry truly realize the historic transformation from "big" to "strong" and contribute to the great rejuvenation of the Chinese nation.