In developed economies, manufacturing employment will decline, regardless of industrial strategies pursued. China’s competitiveness means that any expectation that manufacturing will absorb more than a trivial fraction of the large increases in the working-age population still occurring in India or Africa is a delusion.
LONDON—China’s huge trade surplus, now running at over $1 trillion per year, poses important macroeconomic and trade-policy issues, which were recently addressed in a valuable Project Syndicate compendium. But aside from short-term policy choices, it is also vital to understand the deeper implications of China’s manufacturing prowess for global trends in employment and relative prices.