US Set to Reshore Manufacturing (from China)?

2020 May 3
by bc3b

Since joining the World Trade Organization in 2001 China’s economy has exploded. China has manipulated trade and tariffs to its advantage. With low wages and protective tariffs, China has been able to establish a trade surplus with the rest of the world. The U.S. goods trade deficit with China was $419.2 billion in 2018, almost double what it was in 2009..

In One Chart: A Decade of the U.S. Trade Deficit with China

In the 1960s and 1970s the Japanese took control of the consumer electronics market through systematic product dumping backed by the Japanese government. Brands like Sony and Panasonic drove Zenith and Magnavox out of business. Today Japanese and US televisions, computers and cell phones are likely manufactured in China. WalMart is a leading retailer for Chinese products. China has become a leading producer of pharmaceuticals and medical equipment. In recent years General Electric has shifted the manufacture of x-ray and medical scanning devices from the US to China,

As drdog09 wrote last week, China will be one of the biggest losers in the coronavirus pandemic. The past six months has cast an unfavorable spotlight on China. It has emphasizes what people paying attention have long known – the Chinese cannot be trusted. They want to expand their control of the world at the expense of other countries. Depending on China to supply necessary commodities is extremely dangerous.

Will the Chinese deceitful actions during the coronavirus pandemic reverse China’s 20 years of economic growth and trade surpluses?

The United States is set to reshore substantial manufacturing capacity as China’s demographic time bomb will soon explode, pushing wages higher as retirees spend down their savings.

Despite China’s labor force tripling from 341 million in 1950 to a peak at just over 1 billion in 2010, the nation’s old-age “dependency ratio” (ratio of population aged 65+ per 100 worker population aged 20 to 64) rose from 8.7 percent to only 12.4 percent, according to a report by China research firm Enodo Economics. As a result, China enjoyed six decades of high worker growth and modest cost burdens for retirement and healthcare.

Bringing China’s massive labor force into the World Trade Organization (WTO) in 2001 created an industrial dynamo that saw its share of global manufacturing value-added leap from 11 percent in 2005 to 25 percent by 2018. The biggest WTO member loser was the United States, that saw its global share plunge from 20 percent in 2005 to 15 percent by 2018, according to data from Enodo Economics.

China’s labor force passed 1 billion in 2010 and remained stable at that level over the last decade. The report found the WTO spike in labor demand and stalling labor growth caused average Chinese worker wages to increase by 326.6 percent from 2005 to 2017; about ten times faster than the 34.3 percent wage growth for the average American worker in the same time period.

Due to the aging population, China’s labor force is set to shrivel by about 35 million per year over for the next three decades. The “dependency ratio” will jump from 18.5 percent in 2020; to 27.6 percent in 2030; to 43 percent in 2040; and 50.6 percent in 2050, according to Enodo Economics.

China claimed in 2009 that it could expand manufacturing despite the end of the labor force expansion through retraining low-skilled workers to perform knowledge-intensive tasks. But China reported in 2018 that its workforce was mostly unskilled, with just 21 percent classified as “skilled” and only 7 percent classified as “highly-skilled.”

Due to the demographic time bomb, the number of Chinese students attending college fell from 22.4 million in 2010 to 15.6 million in 2018. The current number of “entering” college students fell from 8.7 million to 5.6 million in the same time period, according to Enodo Economics.

Not only are the number of Chinese college students declining, but 34.8 percent of graduates’ state that their “ideal job” is working for the Communist Party or a government organization, despite only 8 percent of job availability. About 45.2 percent of available jobs are private enterprises, but only 10.3 percent of college graduates call such a job “ideal,” according to a survey by JP Morgan, Tsinghua University and Fudan University.

Enodo Economics forecasts that China is at greatest risk for losing jobs where companies can increase profit margins by building highly automated factories that can benefit from American workers’ higher productvity working with collaborative robots (cobots).

survey by Deloitte and the Manufacturing Institute found that among the top 400 American manufacturers, 70 percent are either creating or expanding their U.S. training programs. These manufacturers fear a 2.4 million shortfall by 2028 of American workers with the skills needed for the Fourth Industrial Revolution “that will transform the world of work through artificial intelligence, advanced robotics, automation, analytics, and the Internet of Things.”

Enodo Economics forecasts the most likely industries to reshore back to the United States include automobiles; electrical machinery; wood and grass product; chemical fiber; chemical material and product; transportation equipment; rubber and plastics; pharmaceuticals; and non-metallic mineral product.

Hat tip:

35 Responses leave one →
  1. 2020 May 3 10:24 pm
    bc3b permalink

    One of the Presidents key opponents in reducing Chinese imports into the US has been the Thomas Donohue and the US Chamber of Commerce. In the past 20 years the US Chamber of Commerce has demonstrated that it is the enemy of the American people, particularly working class Americans.

  2. 2020 May 4 3:50 am
    drdog09 permalink

    Good piece there BC. The worker shift is in part due to the China 1 child policy.

    We, the US, have a problem too. About 15% of our population is untrainable. We some how have to come up with a solution to that one.

  3. 2020 May 4 3:53 am
    drdog09 permalink

    Not that I approve but it does show that the frustration level is in the red line —

  4. 2020 May 4 3:56 am
    bc3b permalink

    drdog09 #2 –

    We, the US, have a problem too. About 15% of our population is untrainable. We some how have to come up with a solution to that one.

    And the Democrats are working non-stop to increase that percentage through mass immigration from third world countries.

  5. 2020 May 4 3:59 am
    drdog09 permalink

    Well something good did come out of the CoVid mess — — print to be buried.

  6. 2020 May 4 4:07 am
    drdog09 permalink

  7. 2020 May 4 4:08 am
    bc3b permalink

    St. Louis snitch upset when her name is posted on social media:

  8. 2020 May 4 5:09 am
    bc3b permalink

    Citizens ending lockdowns in spite of government objections:

  9. 2020 May 4 5:16 am
    bc3b permalink

    Pompeo – enormous evidence coronavirus came from Wuhan lab:

  10. 2020 May 4 5:20 am
    bc3b permalink

    DHS – China lied about coronavirus to hoard medical supplies:

  11. 2020 May 4 5:34 am
    drdog09 permalink

    Worse the whole CoVid thing is approaching hoax territory. It looks like the death rates are only marginally worse than normal flu deaths.

  12. 2020 May 4 5:37 am
    MI Conservative permalink

    Hope everyone is safe and things are going well. I check in but haven’t posted much and want you to know I continue to read posts. And check out links that everyone posts.

  13. 2020 May 4 6:00 am
    drdog09 permalink

    MSDNC host chris hayes is being eaten by the left — — Eventually even the Left will reach the conclusion that the smallest minority of all is the individual. Something that the Right has known all along.

  14. 2020 May 4 7:40 am
    JimNorCal permalink

    These came in email. I haven’t actually checked them, but no reason to think they’re fake LOL

    “For every action there is an equal but opposite government program.”
    -Ambrose Bierce

    “We are now so stultified in our thinking and so priggish in our expressions that it becomes unavoidably offensive to tell the truth” –Johann Georg Hamann

    “As was said long afterward, the founders of the Republic in general, whether Federalist or Republican, feared democracy more than they feared original sin” –Charles A. and Mary Beard

    “Capitalism is the uneven distribution of wealth, and socialism the even distribution of poverty.” –Winston Churchill

    ‘This Guy Is Such a Total Pussy — It’s Stunning’ – Lt.Col. Ralph Peters talking about Obama

  15. 2020 May 4 7:41 am

    “Will the Chinese deceitful actions during the coronavirus pandemic reverse China’s 20 years of economic growth and trade surpluses?”

    I hope so, but I doubt it.

  16. 2020 May 4 7:42 am
    JimNorCal permalink

    “the whole CoVid thing is approaching hoax territory”
    Dear God, help us to do Your will and let this become apparent to our neighbors

  17. 2020 May 4 7:48 am

    10 – That makes me start doubting it now, shame our IC has zero credibility.

  18. 2020 May 4 8:22 am
    justrand permalink

    Say what you will about the girls who accused the women in Salem of being “WITCHES!!”, but at least they did it openly!

  19. 2020 May 4 8:44 am
    drdog09 permalink

    Don Shula, RIP, 90.

  20. 2020 May 4 9:26 am
    bc3b permalink

    Lie-A-watha leads CBS poll of likely Democrats as VP nominee:

    “Gretch the Wretch” tied for last with Susan Rice, 31 points behind Stacey Abrams.

  21. 2020 May 4 12:05 pm
    Eph permalink

    22 BC

    Poll is D+9 and RV

    …And Biden leads by 6

  22. 2020 May 4 12:17 pm
    JimNorCal permalink

    VA Gov Northam goes shopping? With his mask!

  23. 2020 May 4 12:43 pm
    bc3b permalink

    Virginia to start “double counting” coronavirus cases:

    That state has become a real mess.

  24. 2020 May 4 12:51 pm
    Wylie E. Coyote permalink

    Did you know that the CDC has cancelled the “socialist distancing” guidelines?

    You would think that this is good news being shouted everywhere by our “honest” (sarc) MSM, right?

  25. 2020 May 4 12:59 pm
    bc3b permalink

    AOC’s congressional district leads the country in confirmed coronavirus cases and deaths:

  26. 2020 May 4 2:44 pm
    JimNorCal permalink

    “CDC has cancelled the “socialist distancing” guidelines”

    Seems to be less there than meets the eye.
    At most, PDJT has hit the issue back across the net to the Dem Govs.
    Nothing has actually happened.

  27. 2020 May 4 3:40 pm
    Eph permalink

  28. 2020 May 4 5:46 pm
    drdog09 permalink

    WE the royal sense also need to start playing offense. Churches, businesses, need to start filing federal civil rights cases against these local tyrants.

  29. 2020 May 4 7:18 pm
    JimNorCal permalink

    I’ve heard that some coronavirus “cause of death” classifications are dubious.

  30. 2020 May 4 7:53 pm
    JimNorCal permalink

  31. 2020 May 4 7:59 pm
    JimNorCal permalink

  32. 2020 May 4 7:59 pm
    JimNorCal permalink

  33. 2020 May 4 8:00 pm
    JimNorCal permalink

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