Oct. 3 (Bloomberg) -- Faster productivity growth in China creates ``winner and losers'' in the U.S. economy, including tame inflation and heightened competition that leads to job losses, two researchers with the Federal Reserve Bank of New York wrote in an online report.

``Strong foreign productivity growth will likely have mixed effects,'' Mary Amiti, a senior economist for international research, and Kevin Stiroh, a vice president for banking studies, said in their report.

``Consumers are likely to gain from lower import prices and more varieties of imports, for example, while U.S. firms and workers in direct competition with emerging economies are likely to experience potentially painful disruptions and reallocations,'' the paper said.

At a time when some members of the U.S. Congress want to curb Chinese imports, the paper concludes that direct competition between the U.S. and China ``has been limited to a subset of industries'' and that China's gross domestic product per capita compared with U.S. economic output ``remains low.''

Imposing tariffs on Chinese steel or paper, for example, would benefit American producers of those products ``but hurt the U.S. producers that use these goods in making other products, as well as U.S. consumers who are effectively denied the benefits of lower cost products,'' the paper said.

China's trade surplus with the U.S. totaled $141.3 billion through July, up 16 percent from the same seven-month period in 2006 and nearly triple Japan's trade surplus, according to U.S. Commerce Department figures.

Lower Import Costs

Fed researchers have focused this year on studying the slowdown in U.S. productivity growth and how it may affect inflation and economic growth. Productivity, or the amount that workers produce per hour, rose about 1 percent in 2006, the smallest gain since 1995, Labor Department figures show.

Overall, U.S. productivity growth has averaged 2 percent since 1995, compared with more than 4 percent in developing Asia and Eastern Europe, and 6.4 percent in China, according to the Fed researchers.

``U.S. consumers should gain from strong productivity growth abroad, primarily through lower import prices,'' the authors wrote.

``In addition to its direct effects, strong foreign productivity growth may have indirect effects on the U.S. economy by hastening the adoption of new technologies by U.S. firms and encouraging the creation of global production networks -- outcomes that may increase U.S. productivity,'' they wrote.

To contact the reporter on this story: Steve Matthews at smatthews@bloomberg.net.

Last Updated: October 3, 2007 16:23 EDT