1、 itif.org The Hamilton Index,2023:China Is Running Away With Strategic Industries ROBERT D.ATKINSON AND IAN TUFTS|DECEMBER 2023 China now dominates the strategically important industries in ITIFs Hamilton Index,producing more than any other nation in absolute terms and more than all but a few others

2、 in relative terms.Its gains are coming at the expense of the United States and other G7 and OECD economies,and time is running short for policymakers to mount an industrial comeback.KEY TAKEAWAYS As of 2020,China was the leading producer in seven of the ten strategically important industries in ITI

3、Fs Hamilton Index.Overall,China was producing more than any other nationand more than all other nations outside of the top 10 combined.Hamilton Index industries accounted for approximately the same share of the global economy in 2020(11.8 percent)as in 1995(11.9 percent),underscoring how the race fo

4、r global advantage in these industries is a zero-sum competition.Chinas gains have come at the expense of the United States and other G7 and OECD economies.From 1995 to 2020,China also captured more than 80 percent of non-OECD countries gains.China is 70 percent more specialized than America in adva

5、nced industries.To match Chinas specialization,U.S.output would have to expand by$1.5 trillion(69 percent),which would require doubling output from all Hamilton industries except IT services.Time is running short to turn around U.S.advanced industry fortunes.The 2020s are likely to be the decisive d

6、ecade because once China captures sufficient global market share,U.S.and allied nations production risks being permanently weakened.Congress should make closing this massive advanced-industry output gap its overarching economic policy goal,including through tax,trade,and other elements of a comprehe