| Washington, D.C. -- The U.S.-China Economic
and Security Review Commission today released a new study
titled U.S.-China
Trade, 1989-2003: Impact on Jobs and Industries, Nationally
and State-by-State. The study was prepared
for the Commission by Dr. Robert Scott of the Economic
Policy Institute.
The United States' trade
deficit with China increased twenty-fold over the last
14 years, rising from $6.2 billion in 1989 to $124 billion
in 2003. Moreover, it is expected to have increased by
more than 20% in 2004 to over $150 billion. This deficit
is impacting an ever-broadening segment of U.S. manufacturing,
including advanced technology industries like semiconductors
once thought immune to lower-wage Chinese competition.
Using a state of the art
input-output methodology that determines the number of
jobs needed to produce exports and imports, Dr. Scott
calculated that 1.5 million jobs have been displaced
over the period 1989 2003 as
a result of the growing trade deficit with China. The report
also calculates jobs lost by individual states and by specific
industrial sectors.
Commenting on the report,
Commission Chairman C. Richard D'Amato said In
the rapidly changing big and broad economic relationship
with China, it is crucial to have a full, comprehensive
understanding of the facts and scope of the relationship.
With such data, we can begin to assess the impacts China
is having on our economic health and our national security.
This report makes an important, groundbreaking contribution
to developing that understanding.
Dr. Scott summarized the
report findings as follows: The
assumptions we built our trade relationship with China
on have proven to be a house of cards. Everyone knew we
would lose jobs in labor-intensive industries like textiles
and apparel, but we thought we could hold our own in the
capital-intensive, high-tech arena. The numbers we're
seeing now put the lie to that hope as China expands
its share even in core industries such as autos and aerospace.
The report's key findings
are:
- The
rise in the United States' trade deficit
with China from 1989 to 2003 caused displacement of production
that supported 1.5 million U.S. jobs. The loss of jobs
due to the growing trade deficit with China has more
than doubled since it entered the WTO in 2001.
- China's
exports to the United States of electronics, computers,
and communications equipment, along with other products
that use more highly skilled labor and advanced technologies,
are growing much faster than its exports of low-value,
labor-intensive items such as apparel, shoes and plastic
products.
- The U.S. trade deficit in Advanced Technology Products
(ATP) with China is now $32 billion, equal to the total
U.S. ATP deficit.
- China is also rapidly gaining advantage in more advanced
industries such as autos and aerospace products.
- The 1.5 million job opportunities lost nationwide are
distributed among all 50 states and the District of Columbia,
with the biggest losers, in numeric terms: California (-211,045), Texas (-106,262), New
York (-87,037), Illinois (74,070), Pennsylvania (-73,612), Florida (-65,733), North
Carolina (-65,279), Ohio (-61,914), Michigan (-54,313),
and Georgia (-49,589).
- The ten hardest-hit states, as a share of total state
employment, were: Maine (-15,396, or
-2.54%), Arkansas (-19,859, -1.74%),North
Carolina (-65,279, -1.72%), Rhode Island (-7,840,
-1.62%), New Hampshire (-9,878, -1.60%), Indiana (-45,285,
-1.56%), Massachusetts (-48,086, -1.51%), Vermont (-4,426,
-1.48%), Wisconsin (-41,150, -1.48%),
and California (-211,045, -1.46%).
The full report can be downloaded
from the Commission's
web site www.uscc.gov.
The Commission welcomes comments by researchers and interested
parties on the contents, methodology and findings of the
Economic Policy Institute report.
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