As China's Wages Continue to Heat Up, Expect More Reshoring of Production Back to the U.S.
"But while China’s industrial subsidies, trade policies, undervalued currency and lack of enforcement for intellectual property rights all remain sticking points for the United States, there is at least one area in which the playing field seems to be slowly leveling: the cheap labor that has made China’s factories nearly unbeatable is not so cheap anymore.
Thanks to China’s rising labor costs, it looks as if America might be back in the manufacturing game sooner than expected."
2. From a CNBC report last February, "China's Role as 'World's Factory' Coming to an End":
"China’s economy is at a significant crossroads as it enters 2011, with wages rising rapidly and the labor force, particularly of migrant laborers, starting to shrink. The shift is causing many to predict the end of the country’s status as the world’s shop floor."
4. Hal Sirkin, a senior partner and managing director at the Boston Consulting Group (BCG):
"It's now becoming more effective to produce in the U.S. than it is to produce in a lot of different countries. Between the shift in the dollar and the incredibly rapid rise in wages in China, people are starting to do this. In a BCG report, we predicted that this would not happen until 2015. We're surprised in a very good way because we're starting to see it happen in 2010, 2011 and 2012. Now we think this is just the tip of the iceberg that we're seeing -- that we're going to see a whole lot more because the economics continue to shift in favor of the U.S. The fundamentals are that the tide has turned, as it did with Japan, as it did with the Asian Tigers. We're seeing a repeat of this with China."
HT: Scott Lincicome's blog and here on Twitter.