The U.S. Will Surpass China as the No. 1 Country for Manufacturing by 2020

I am late to this discussion, but James Fallows wrote China Airborn, a book about precisely this topic! The answer is complicated—if it weren't, he'd not bother writing a whole book about it—but the short answer is that so far China's not succeeded.

China does lots of stuff well and deserves credit for it but is not the indomitable powerhouse sometimes suggested in the media (e.g. http://www.marketplace.org/2015/12/10/world/why-cant-china-m..., although I don't know if this piece or others like it are for real).

Let's say that there's a $3.50 product that costs $1.50 to produce, and a company can save 10% of production costs by producing it in China (even with lower wages you don't tend to have huge savings when things like transportation, lower quality, distance from quality inspectors, etc. are added in). So that's a 15 cents saving - now some of that the company is going to keep (let's say 5 cents), some will go to the businesses buying wholesale (let's say another 5 cents), and some will go to the consumer (let's say the remaining 5 cents). So in the end it might be the difference between paying $3.45 and $3.50 for the consumer - something most people wouldn't notice.

Of course, for a company it's a much bigger difference - if everything costs them $2.25, and they're selling it for $2.75, then an extra 5 cents per unit means their profit margins go up 10%.

Of course this is going to vary a great deal depending on a number of factors (what kind of product, if you're buying generic, etc.). But I think for a lot of products the average American wouldn't notice much of a price difference if they were being made in the U.S.

like, say, New York City? Sure!

No, the rooftop garden on the Park Slope Whole Foods does not count.

Trade is necessary for the wealth of modern economies. Self-sufficiency is North Korea's approach.

And a lot of those peripheral jobs being talked about are also in line to be automated away.

A modern chip fab plant is one of the cleanest industries we have EVER produced.

Everything is really sealed, and even the "waste" gases are purer than what you get directly from most industrial suppliers. It used to be that most of these plants immediately dump industrial gases into their waste stream and purify them to the level they need.

This is different from a PCB manufacturing plant which creates lots of liquid waste that is contaminated with all manner of nasty metals.

What's a "problem" for the rest of the U.S. is creative destruction here. I worry we may have learned the wrong lessons because of current politics and inequalities. And it's worth remembering that automation is going to result in that manufacturing resulting in less jobs. What's going to happen when people expect the jobs to come back but then they don't?

I know this has all been said, but I'm not sure everyone's connected all the dots.

It's really a shame because it was great to have that "I can get this part in ten minutes" feeling when I was in the middle of a project and I ran out of something I needed, or realized I was missing a part.

raising sheep requires land, remember? it's livestock, grass/feed, water, veterinarians, medication, sheepdogs, abattoir, compliance, inspection, processing, packing, refrigeration, shipping.

if you're producing wool, let's substitute/add shearing, washing, drying, processing, packing, etc.

not to mention sales, marketing, client relations, accounting, human resources, payroll taxes, corporate taxes, property taxes, sales taxes, value added taxes, etc. because a ranch is a business that turns over probably millions a year.

how much does all that cost in the UK? how much does it cost in NZ? find the difference, and compared to the shipping costs, which are trivial, probably a couple of thousand dollars to get a refrigerated 30 foot container from Auckland to Amsterdam, then another few hundred pounds to get it across the channel and into a distribution center in the south of england.

i don't know a damn thing about farming or logistics, but all it takes is about 2 minutes of thought to see how the economics would work.

Not so much these days, but it used to be fairly common to just run sheep up a mountain valley and then twice a year muster them down the valley (often with only horses and dogs) for shearing and slaughter. Any sheep that fall ill would either recover or die.

That's still the case usually, a lamb is worth a lot less than the vet costs.

I'd be better off renting from someone else losing money.

Now, the fact that it is a policy goal with that kind of support may be a failure on a more fundamental level, but that's a different issue.

https://fred.stlouisfed.org/

Can you take a look and help me pick which of those 421,000 pieces of time-series data are the conspiracy ones so that I know not to look at them any more?

Go take a look at what labor pulled in per hour in 1890.

When looking at developing countries that are actually developing (instead of stuck in the middle income trap) what we see is a picture of a more developed country decades ago, except with access to modern tech. While the modern tech makes them move faster, you should expect them to be more like the US or the EU every year. Look at pollution: China has a huge pollution problem, but that's not unlike LA in the 70s and 80s. People are getting wealthy enough to demand environmental regulations, and in a decade their government will care about environmentalism.

So instead of thinking about how China or India have things that we've lost and try to turn back the clock, it's more productive to think that we have to deal with our own problems today, as China will also have them in 20 years.

You'd be less screwed than you would have been 100 years ago in that situation, for sure.