Who Created the China Trade Imbalance?

In this presidential-election year, the debate over foreign outsourcing and trade imbalances and their impact on the U.S. economy rages throughout media. But there can be no debate over the extent to which one particular country -- China -- is contributing to the trade imbalance.

In 2003, $148.6 billion in manufactured goods were imported from China, according to the U.S. Office of Trade and Economic Analysis, up from $97.3 billion in 2000, producing a manufactured goods imbalance with the U.S. of $126.8 billion ($21.8 billion of U.S. manufactured goods landed in China).

It's not just consumer goods -- apparel, toys, etc. -- hitting retailers' shelves that account for the China imports. Many U.S. manufacturers now look to China suppliers for their components and materials. Most U.S. industries are making China a cog in their supply chain -- even while many manufacturers in those sectors are losing sales and profits to the Chinese.

Based on findings of the IndustryWeek/Manufacturing Performance Institute 2004 Census of Manufacturers, nearly half of manufacturing plants surveyed (45%) now source components and materials from China. When reviewing the Census plants that do source from China, 74% indicate the dollar volume of components and raw materials sourced from China has increased over the last three years (18% say the volume has increased by more than 20%).

More here.