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China the main cause of US manufacturing job losses: thinktank

  • Staff Reporter
  • 2012-08-26
  • 11:37 (GMT+8)
Although accusing China of 'taking our jobs,' a labor-union backed US think tank also admitted that higher productivity stateside could have contributed to job loss. (File photo/Xinhua)

Although accusing China of 'taking our jobs,' a labor-union backed US think tank also admitted that higher productivity stateside could have contributed to job loss. (File photo/Xinhua)

A report from a labor-friendly US thinktank published Friday said China is to blame for the loss of 2.1 million manufacturing jobs in the US.

A US business representative said higher productivity rates contributed to the losses and called on the US government to help workers to move to other more competitive sectors.

The Economic Policy Institute, a thinktank funded 30% by labor unions, said that between 2001 and 2011 over 77% of manufacturing jobs in the US were displaced or eliminated by China, despite US exports to China having increased dramatically by US$12 billion to US$103.9 billion last year. China's exports to US have grown at an unprecedented rate, leading to a US$295 billion record-high trade deficit last year, according to Reuters.

The report also said trade-related sectors such as computers and electronics, clothing, textiles and metal products across the US have all suffered job losses. By state, California suffered the most, followed by Texas, New York and Illinois. Many US workers who lost their jobs remain unemployed or earn a much lower wage from their new job.

The exchange rate of the yuan against the US dollar was the main contributing factor behind the trade deficit, said Robert Scott, the institute's director of trade and manufacturing policy research. The currency, which the thinktank deems to be undervalued by 30%, has indirectly subsidized exports and increased tariffs on import goods, added Scott.

Such remarks have become all too familiar in the days leading up to the US presidential election. Republican candidate Mitt Romney said he will label China a currency manipulator immediately if elected, according to Reuters.

US-China Business Council, a representative of US businesses operating in China, countered the remark and said that job losses are the result of higher productivity rates in related industries. The US manufacturing sector defied the economic recession in 2009 to produce US$1.7 trillion of output, simultaneously increasing its productivity rate and reducing the number of workers.

The council also said China's huge population made comparing the manufacturing output of the two countries disproportionate.

The US government should increase exports of manufacturing goods to China, said the council, and make advanced plans for the manufacturing sectors, encouraging them to innovate and become world leaders in sectors such as technology and energy. It also urged the government to help domestic workers to transfer to other growing sectors and US businesses to relocate their operations in China.

Who's Who

  • Guo Gengmao (郭庚茂)

    Guo Gengmao (郭庚茂)

    Guo Gengmao is the Communist Party secretary of central China's Henan province. A native of Jizhou in Hebei province, he was born in 1950 and ...