Advertisement
China manufacturing
EconomyChina Economy

China’s 5-year plans significantly impact American factories, US study says

A study finds that American plants in counterpart industries targeted by Beijing experience job cuts and a fall in investment

2-MIN READ2-MIN
6
Listen
A worker monitors products at a packaging factory in Lianyungang, in China’s eastern Jiangsu province on May 18. Photo: CN-STR/AFP
Sylvia Main Shanghai
China’s five-year plans have profoundly impacted US businesses – while some American companies have adapted and even profited, US factories have been hit with job losses, lower investment and more closures, according to a US-based scholar.
From 2001 to 2020, when Beijing backed an industry under one of its five‑year plans, US factories in the same sector shed about 5 per cent of jobs and around 6 per cent of investment, said Jiang Wei, a finance professor at Emory University. The probability of factory closures in that industry rose by 1 percentage point, she added.

This stood in contrast to domestic industries targeted for growth under China’s five-year blueprints, which saw a 12 to 15 per cent surge in employment, investment and output within a single plan cycle, she said.

Advertisement

Jiang co-authored a study with researchers from two other US universities, tracking data from 1.6 million American factories and 1.1 million Chinese firms between Beijing’s 10th and 13th five-year plans.

She called on China to further rebalance its economy, arguing that the country’s sheer size today meant the rest of the world could no longer absorb its excess output. Beijing unveiled its latest five-year plan earlier this year.
Advertisement

“This is a global replacement of production capacity,” Jiang said. “China expanded exports to the rest of the world as American exports to those markets retreated.”

Chinese officials have repeatedly rejected the “overcapacity” narrative. In a response to a White House Section 301 probe over alleged overcapacity in March, China’s Ministry of Commerce argued that defining a country’s output as overcapacity if it exceeds domestic demand reflected a narrow view of global supply and demand in an interconnected world.
Advertisement
Select Voice
Select Speed
1.00x