This is the Cato Daily Podcast for Monday, September 14, 2009. I'm Caleb Brown.

China's economy is on track to be larger than the U.S. economy in a few years.

Dan Griswold director of the Cato Institute's Center for Trade Policy Studies and author of

the new book Mad About Trade says, so what?

As many economists point out, free market and otherwise, the recovery in this recession will be stimulated by profits and profits often

come from being able to do more with less and on an individual basis we all want to be able to do more with less and the

U.S manufacturing sector may be a prime example of doing more with less. Exactly.

The United States remains a strong manufacturing nation

and nobody's taken the brunt of this recession more than U.S. manufacturing.

It is a significant downturn. We've seen that in the

automobile industry and other sectors. But again, when you stand back and look at the long-term

trends, they continue to be up for manufacturing.

There was a recent report by a consulting firm, Global Insight,

that that showed, and I think this is true,

that in about five years, China is going to overtake the United States as the world's leading manufacturer in terms of value added.

The value actually added to manufactured products.

That got a lot of publicity and oh China's taking over and we're going to lose our global leadership

The study also showed that US value added is going to continue to go up

By all sorts of indicators we are manufacturing more stuff

than we were 10 or 20 years ago and it's more sophisticated stuff. Yes fewer

t-shirts, fewer shoes, but over the long run more semiconductors, more sophisticated

civilian aircraft and jet engines.

...