China vs. the U.S.: It's Just as Cheap to Make Goods in the U.S.A.

[mota bhai 2,675]

An entire generation of Americans has come of age laboring under the assumption that the U.S. can’t compete in the manufacturing arena with low-cost competitors such as China and Brazil. That may have been true a decade ago, but it’s no longer true today.

I recently completed a review of manufacturing costs in the top 25 export economies with my colleagues Justin Rose and Michael Zinser. Our research shows that when the most important economic factors are considered—total labor costs, energy expenses, productivity growth, and currency exchange rates—Brazil is one of the highest-cost manufacturing nations in the world, Mexico is cheaper than China, China is virtually even with the U.S. (as are most of the traditionally “low-cost” countries of eastern Europe), and the low-cost leader in western Europe is none other than the country that launched the Industrial Revolution: the United Kingdom.

...

As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors.

...

The two countries making the greatest strides in manufacturing competitiveness were Mexico and the U.S. The key reasons were stable wage growth, sustained productivity gains, steady exchange rates, and the big energy advantage the U.S. has captured since the shale-gas boom began.

...

When companies build new manufacturing plants, they’re typically placing bets for 25 years or more. They need to carefully consider how relative cost structures are changing and how these changes are likely to continue in the future.

http://www.businessweek.com/articles/2014-04-25/china-vs-dot-the-u-dot-s-dot-its-just-as-cheap-to-make-goods-in-the-u-dot-s-dot-a

[I AM NOT THAT GUY 5,715]

No change. I am already addicted to cheap energy. My industry requires it.

[The Nature Boy 4,224]

An entire generation of Americans has come of age laboring under the assumption that the U.S. can’t compete in the manufacturing arena with low-cost competitors such as China and Brazil. That may have been true a decade ago, but it’s no longer true today.

I recently completed a review of manufacturing costs in the top 25 export economies with my colleagues Justin Rose and Michael Zinser. Our research shows that when the most important economic factors are considered—total labor costs, energy expenses, productivity growth, and currency exchange rates—Brazil is one of the highest-cost manufacturing nations in the world, Mexico is cheaper than China, China is virtually even with the U.S. (as are most of the traditionally “low-cost” countries of eastern Europe), and the low-cost leader in western Europe is none other than the country that launched the Industrial Revolution: the United Kingdom.

...

As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that it’s almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors.

...

The two countries making the greatest strides in manufacturing competitiveness were Mexico and the U.S. The key reasons were stable wage growth, sustained productivity gains, steady exchange rates, and the big energy advantage the U.S. has captured since the shale-gas boom began.

...

When companies build new manufacturing plants, they’re typically placing bets for 25 years or more. They need to carefully consider how relative cost structures are changing and how these changes are likely to continue in the future.

http://www.businessweek.com/articles/2014-04-25/china-vs-dot-the-u-dot-s-dot-its-just-as-cheap-to-make-goods-in-the-u-dot-s-dot-a

Not to mention the cost of shipping all that stuff here.

[Operator 1,927]

I think it really depends on what manufacturing sector you are talking about.

I work in the compressed gasses industry and even with countervailing duties and shipping my Chinese clients can still get it to market for the same or cheaper. Even still this is based on cheaper starting stock and not necessarily lower labor costs. My wife's uncle is importing labor into China from VN to get costs down in his heavy equipment factory.

In some cases over the past 8 years the quality of the product has surpassed what is being produced in the US and Western Europe.

I'm all for fracking and we better get to it before Canada drinks our milkshake.

[mota bhai 2,675]

The good news is Canada is weak and defenseless and can be ours if we want it.

[Operator 1,927]

I can not argue with your logic.

[mota bhai 2,675]

In fact, it will be on discount during the next Black Friday sale!

[GandD 5,966]

In fact, it will be on discount during the next Black Friday sale!

Canada? Edited April 25, 2014 by GandD

[mota bhai 2,675]

Yes. Oh wait, maybe Boxing Day.

[Operator 1,927]

[I AM NOT THAT GUY 5,715]

As the agricultural belts move northward and the northwest passage returns to its normal, ice-free condition after the current mini-ice-age comes to an end, the annexation of Canada becomes inevitable.

[mota bhai 2,675]

As the agricultural belts move northward and the northwest passage returns to its normal, ice-free condition after the current mini-ice-age comes to an end, the annexation of Canada becomes inevitable.

Indeed.

But who will tell the Canadians?

[I AM NOT THAT GUY 5,715]

Of course, that means I will have to move farther up the west coast, as most of central and southern California returns to its normal arid, desert state. Oregon seems kind of nice.

[I AM NOT THAT GUY 5,715]

Indeed.

But who will tell the Canadians?

I am sure they can find a home in Antarctica. There are only a few dozen of them, anyways. The US can book a couple flights for those that don't want to give up their native lifestyle of eating Timmies and singing Kumbaya.

[Caryh 5,206]

Of course, that means I will have to move farther up the west coast, as most of central and southern California returns to its normal arid, desert state. Oregon seems kind of nice.

And of course its getting pretty obvious that Mexico has nearly completed its invasion and is retaking the southwestern portion of the USA and Texas. Or at least those parts that will remain above sea level.