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Report: Millions of Jobs Heading Home from China

Time to pop the champagne? The return of manufacturing jobs from China to the US could generate as many as three million new jobs in the US by 2020, according to a new study by the well-regarded Boston Consulting Group. As a result of rising labor costs in China, manufacturing jobs are coming back to the US. The FT has the story:

Rising Chinese labour costs are changing the economics of global manufacturing and could contribute to the creation of 3m jobs in the US by 2020, according to a study being released on Friday.

The Boston Consulting Group analysis says the new jobs will be generated by a “re-shoring” of manufacturing activity lost to China over the past decade…

The Boston Consulting Group estimates that the trend could cut the US’s merchandise trade deficit with the rest of the world, excluding oil, from $360bn in 2010 to about $260bn by the end of the decade. The shift would also reduce its soaring deficit with China, which reached $273bn in 2010 and has triggered an intense political controversy over China’s exchange rate policies.

Millions of manufacturing jobs coming home from China?  The future just keeps looking better all the time.

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  • Jim.

    I keep saying — as long as we can keep expanding the world’s resource base, the rise of the 3rd world is in human terms a good thing.

    Over time, wages (and standard of living) will equalize between China and the US. Job opportunities, factory siting criteria, these will equalize along with that.

    What we should be concerned about is whether the standard of living will equalize at a level (far) below that enjoyed up until recently by the US. Will young auto workers make $10/hr? How about $15-$20/hr? $40/hr seems unlikely, but you never know. There is in fact hope, if we expand raw materials production.

    Wages, and what those wages will buy, is a function of the magnitude of raw materials production.

    In the beginning of each production thread, the economy has raw materials. The economy processes them. Then it shares out the results. More raw materials in, more to share out at the end. This is not subject to any kind of loaves-and-fishes miracle.

    (The service sector is another story, but insofar as an irreducible amount of our standard of living is based on goods and not services, the point stands.)

    (Efficiency and Innovation also will not save us from having to expand our resource base. Too often, victories claimed by the forces of “efficiency” are merely a real decline in standard of living repackaged as gain. As for innovation — it affects marginal percentages, while the rise of the third world requires about a factor of ten increase in production. It’s nice and will add up long term, but not nearly enough to help our near-term economic problems, as globalization proceeds so quickly.)

    Oil strikes in North Dakota should be celebrated for what they are — the only chances of the workers (such as the unhappy ones in Wisconsin) to arrest the decline of their standard of living. It is the only defense of the Baby Boomers for the integrity of their retirement plans. It is the only hope of the present youth of America for a standard of living anywhere near our parents.

    The first leader to articulate this effectively will gain high office, and the leader to follow its prescriptions will lead America back to domestic peace and prosperity.

  • J R Yankovic

    Wait a minute: – You mean those clever Chinese are as human(and so enticeable by higher living standards)as we are? What is this productivity-at-all-costs world coming to?

    Anyhow, thanks this time around for some REAL good news. And regards to Jim. for more of the usual clear-headed common sense.

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