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Greenspan says the popular 'Cash for Clunkers' program is proof that consumer confidence is growing. But he warns if home prices take another dip, it'll hurt the progress the economy has made.
By TIMOTHY AEPPEL
China is on its way to surpassing the U.S. as the world's largest manufacturer far sooner than expected. The question is, does that matter?
In terms of actual size, the answer is, no. But if size is a proxy for relative health of each nation's sector, the answer is yes.
Anyone who walks the aisles of a U.S. retailer might think China already is the world's largest manufacturer. But, in fact, the U.S. retains that distinction by a wide margin. In 2007, the latest year for which data are available, the U.S. accounted for 20% of global manufacturing; China was 12%.
The gap, though, is closing rapidly. According to IHS/Global Insight, an economic-forecasting firm in Lexington, Mass., China will produce more in terms of real value-added by 2015. Using value-added as a measure avoids the problem of double-counting by tallying the value created at each step of an extended production process.