China is on pace to outrank the United States in manufacturing output by 2020, according one report from Global Insight, a US forecasting company.

Based on the industry value added (VA) measurement, products made in China occupied 4.6 percent of global output in 1995, and increased to 12.1 percent in 2006. Global Insight forecasts China's output will reach 25.9 percent in 2025.

Meanwhile, the report says anxiety over China's rapid rise in the manufacturing sector stifling the US economy is unfound.

While foreign demand has supported China's manufacturing growth in the recent past, future growth in manufacturing will be increasingly diversified to meet the growing domestic demand instead. That will create opportunities for external producers.

Anand Sharma, CEO and co-founder of TBM Consulting Group, also says that different manufacturing sectors have different expertise. In fact, the US is successful in manufacturing aircraft, heavy capital equipment, and precision scientific and medical equipment, which are all expected to dominate over China. But at the same time, the US loses its share of world output in textiles, basic metals, computers, electrical equipment, and household appliances.