China last year surpassed the U.S. as the world’s top exporter of high-tech communications and information products such as cell phones, laptop computers and digital cameras, according to a study released yesterday.
The Organization for Economic Cooperation and Development (OECD) report highlights China’s rapid rise as an economic power and a manufacturing hub for sophisticated electronics.
As recently as 2003, the U.S. led in global information and communications technology exports. But last year, China shipped $180 billion worth of such goods worldwide, exceeding U.S. exports valued at $149 billion, said the OECD, a Paris think tank funded by 30 market-based democracies, including the U.S.
American companies are exporting a steadily rising stream of advanced technology goods to China, U.S. trade figures show. From January through September, exports to China of electronics, biotechnology, information and communications, and other advanced technology products hit $8.6 billion, according to Census Bureau figures. That was an almost 17 percent increase from a year earlier.
But Americans bought much more than they sold — importing $40.7 billion in advanced-technology products from China, a 30 percent rise from the first nine months of 2004, the Census Bureau said.
The congressionally chartered U.S.-China Economic and Security Review Commission in a January report linked the rising high-tech imports from China with job losses. From 2001 to 2003, when imports rose steadily, U.S. employment decreased by 30,000 in the computer industry, by 91,000 in electronic machinery, 11,000 in communications equipment and 25,000 in semiconductors.
“They are absolutely eating our lunch. It’s putting many Americans out of work,” said Bill Reed, a past president of the American Engineering Association, an independent group that represents about 1,000 U.S. engineers concerned about competition from immigration and imports.
But the cause of the deficit in high-tech goods is manifold.
• American companies are setting up shop in China and exporting finished products to the U.S.
• Companies from countries such as Japan are doing the same, meaning that the U.S. imports of electronics, for example, from Japan are falling while they rise slightly from China.
• Chinese companies are becoming more competitive, acquiring name brands such as IBM or creating their own components.
“China itself is also manufacturing and exporting more electronic components than ever before, with these now forming China’s second-largest export item, after computer and related equipment,” the OECD said.
• And U.S. companies are seeing their share of the Chinese market erode as other nations, such as South Korea, muscle into high-tech manufacturing.
“For example, China previously relied on electronic components, such as computer chips, imported from the U.S. and [European Union] to manufacture laptops and advanced mobile phones. However between 2000 and 2004, the U.S. and EU share of China’s total imports in these components dropped from 27 to 12 percent,” the OECD said.
The U.S. electronics industry maintains that high-end work — design and creation of products — continues to be the U.S. forte, while China is a point of assembly.
Providing the know-how to manufacture leading products does not show up in trade accounts, but it supports some of the best jobs, said Matthew Kazmierczak, vice president for research and industry analysis at AeA, a trade association for software, telecommunications, computer chip and other tech companies.
“The higher-end stuff is still done in the United States. That is something we want to maintain and keep here,” Mr. Kazmierczak said.
The OECD report also noted that the U.S. remains the largest market for high-tech products made in China. Sacha Wunsch-Vincent, author of the OECD report, said that is a good sign for the U.S. economy.
“It doesn’t really matter where things are produced. It matters where they are used. The United States has a track record of using information technology to increase productivity,” he said.
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