The Manufacturing Pendulum Is Swinging Back from China to the USA

By Mike Hart 

I have long thought that American companies have gone overboard in moving so much manufacturing to China.  On paper, the cost savings were and remain significant, but there are many hidden costs – shipping, logistics, communications, product recalls, intellectual property theft, counterfeiting – that offset the cost savings advantage.  Blinded by the huge potential of the Chinese domestic market, American companies have flocked to China over the last decade, fearing that if they didn’t do so, some other competitor would and they would be out of the game.

Because of the fear of not being in the Chinese market, America companies over-corrected and rushed to China without weighing all the costs.  At first, manufacturing in China was a no brainer because labor costs were so low.  But labor costs have risen dramatically over the years and all the other hidden costs of doing business in China are coming to light.