I predicted here in a musings post that manufacturing would return to U.S. shores from China. I anticipated that wages would increase there, and the cost of manufacturing would steadily increase along with it. American companies seeking economies of scale in China would begin to ponder Made In America again albeit our manufacturing base has long eroded.
While I’m no economist or global manufacturing expert, and my prediction was merely my own based on observation, it seems it may be coming true a bit quicker than expected.
Today’s Wall Street Journal story, “Buck Up, America. China Is Getting Too Expensive,” tells about a U.S. furniture manufacturer who got the raw end of a stick when he manufactured in China only to be pushed aside by businessmen in China who decided to sell direct to the U.S. instead. The story also speaks about Bruce Cochrane a Lincolnton, NC furniture maker who is ramping up manufacturing back on home soil.
Many factors contribute to this and it would be great to hear from anyone expert in global arbitrage, currency, manufacturing, and trading. What are known factors today relate to the Chinese manipulating their currency to be more favorable to them in addition to soaring wages in China as the workers there get a taste of Western capitalism.
There are many implications for business owners who thought China the Holy Grail. What goes around comes around, right? We see that in fashion every 20 years or so; perhaps we’re going to begin to see it with consumer goods and industrial products, too.
Is America ready?
