Jim McSheehy said:
Wages are increasing rapidly in China and its currency continues to appreciate against the dollar. A new study predicts Chinese workers will reach wage parity with their U.S. counterparts in only five years:
http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-75973
They go on to predict a renaissance of American manufacturing as our traditionally higher productivity attracts companies to repatriate their overseas operations.
In addition, if energy prices significantly raise shipping costs, it might make some items look more cost-effective to manufacture in USA?
Big heavy stuff (or just big bulky stuff) might more quickly become cost-effective with rising shipping costs, compared to tiny-but-valuable stuff like microprocessors?
Perhaps if energy costs would drive shipping high enough, it would even encourage regional manufacturing and regional agriculture? If it starts costing too much to ship fruit from California or Mexico, then it may be cheaper to pay a greenhouse close to the point of sale? And of course at one time every little burg had its own soft drink bottling plants. Presumably because it was cheaper to manufacture closer to the point of sale?
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There is the other advantage that if you manufacture locally, you are not teaching ferriners how to compete with you, and even showing them what kind of product niches are marketable.
I was in a small biz that designed and sold off-shored small electronic devices. The ferriners eventually cut us out of the loop.
There is a good chance the ferriners would have never noticed our tiny market niche if we hadn't dropped it in their laps by paying them to tool up for that niche. Even if they had noticed our niche, at least they would have had to draw their own circuit board layouts.
It is baffling that more USA companies have not avoided off-shoring simply to avoid training new competition.
