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The Hamilton Index 2026 reveals that China’s share in global production of advanced industries surged from 3.5% in 1995 to nearly 25% in 2022, leading in seven out of ten strategic sectors. In the same period, the share of OECD countries in advanced industrial production declined from 86% to 58%, with China’s gains occurring at the expense of the United States and traditional Western allies. China’s strategic dominance includes basic segments such as basic metals and chemicals, and complex sectors such as electrical equipment, machinery, and motor vehicles.
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China’s Share in Advanced Industries Skyrockets to 25%
The latest Hamilton Index released by the United States Institute of Technology and Innovation (ITIF) on May 6, 2026, reveals a significant rise in China’s share in global production of advanced industries. The report covers key sectors such as electronics, basic metals, machinery, chemicals, motor vehicles, information technology, and pharmaceuticals. According to the survey, China’s share has increased from 3.5% in 1995 to nearly 25% in 2022.
China Leads Seven Out of Ten Strategic Sectors
The Hamilton Index indicates China’s dominance in seven out of the ten strategic advanced industries, including basic metals, machinery, and chemicals. Notably, China’s command over these sectors is not limited to producing more inexpensive goods but extends to gaining control over vital industrial chains linked to semiconductors, electric cars, infrastructure, defense, energy, and automation.
China’s Rapid Industrial Progress in Less Than Three Decades
The Hamilton Index sheds light on China’s remarkable industrial growth, with increased production share from a mere 3.5% in 1995 to almost 25% in 2022. This notable advancement is not incidental but the result of a deliberate industrial policy, including subsidies, low-cost credit, protection of the domestic market, and mandatory technology transfers from foreign firms operating in China.
China’s Industrial Growth Outpaces Top Nations
While China’s rapid industrial growth has been impressive, it has also led to a decline in the market shares of countries historically dominant in global manufacturing, such as Germany, Japan, and the United States. Particularly in sectors like machinery and basic metals, China’s growth far outpaced that of these nations.
China’s Dominance in the Global Industrial Sector
In terms of advanced industrial production volume, scale, and sectoral diversity, China stands in a league of its own. The most notable data shows that China produces more than all other nations outside the top 10 combined, a feat neither the United States nor Japan achieved during their respective industrial peaks.
United States Leads in IT Services, But Falls Behind in Advanced Manufacturing
Despite the global advancements of China, the United States still leads in IT services sector, accounting for 36.1% of global production. However, when it comes to advanced industries, the United States lags behind China.
China’s Advanced Industrial Specialization Surpasses the USA
The Location Index of the Hamilton Index shows that China specializes more in advanced industries as compared to the global average, while the United States lags behind. This specialization has enabled China to rapidly scale its factories, suppliers, and industrial chains.
Implications of Chinese Industrial Dominance
The dominance of China in advanced industries impacts not only its rivalry with the United States but also affects countries dependent on global supply chains. For instance, Brazil’s dependence on China for industrial equipment, processed metals, chemicals, and more poses an economic risk.
China’s Industrial Ecosystems Versus Western Specializations
Unlike other countries that focus on one or two sectors, China has built a broad production base in metals, machinery, chemicals, vehicles, electronics, and electrical equipment. This breadth has allowed China to create robust industrial ecosystems and accelerate technological development.
The Scale of the US Industrial Gap With China
According to ITIF, for the United States to match China’s level of industrial intensity, it would have needed to increase production in the advanced industry sector by nearly $1.5 trillion in 2022. This indicates the sizeable industrial gap that exists and highlights the need for a comprehensive reconstruction of productive capacity, suppliers, and specialized workforce.
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