This has got to change. Why is everything made in China? Anyone not coming to grips with the national security implications of not creating critical equipment in your own country (or region) is praying for doom.
Part of me wonders how serious a question this is. The ridiculously cheap manufacturing costs is why anything is made in China. When the Chinese get unions to negotiate $45/hour salaries, require fair working conditions, time off, medical/dental, and on and on things might be different.
You can take advantage of the situation and develop a 100% robotic assembly line that does not require $45/hour workers so that you can manufacture critical equipment in your own country. Be the hero the world needs, not the one it deserves.
In some other cases where all the components are already made in the states, it can be upwards of 20% cheaper to make it here, because of the shorter lead time, less complex supply chain, as well as other factors.
The cost differential of China has effectively vanished due to rising wages, the implementation of some environmental rules, and increasing strength of the RMB.
What China does have is well established closely knit supply chains, which means its a shorter lead-time to start new production of a given widget - this is something that we can fix over time, and in my opinion, this may be the biggest lasting change from this crisis. We effectively got caught with our pants down in this crisis because of this.
The large volume boards (6-7 figures) where consumer electronics focused and extremely price sensitive so the combined savings from colocation of fab and assembly were often significantly more than any savings automation or logistics in the United States, especially accounting for risk.
Also, the purple/gold finish is gorgeous.
For what an anecdote is worth (to give a sense of the scale of the problem) I'm involved in automotive tier 2 industrial automation in the midwestern US. One of my customers who has plants in several countries has told me that a fully loaded hour (including benefits, taxes, etc) of assembly operator time in Michigan costs $28, the same hour in China costs $7.50, and the same hour in Mexico costs $4.75. It is a bit more of a pain to maintain qualified engineering and maintenance parity across these different zones, but they basically do the automation in Michigan and mirror those known-good machines and processes overseas with remote support. They're assembling, staking, polishing and inspecting plastic interior components, and their costs are roughly 15% overhead and profit, 20% shipping, 20% raw materials, 10% capital (machine) depreciation, and 35% operator time.
I've often wondered why import tariffs and/or local manufacturing subsidies aren't used to address this. AFAIK they're set fairly arbitrarily, based on the whims of e.g. President Trump. But imagine if they approximated the difference in cost due to the environmental and labor standards of the two countries. Then it'd be an even playing field; there'd be no advantage in importing from a country with lower standards or exporting to a country with higher standards.
A few possible reasons why not: it seems non-trivial to accurately determine how much labor went into a part (may vary over time and by manufacturer) or how much environmental damage its manufacture caused. And maybe we just don't have the appetite to pay the cost of making things to our alleged standards and would rather dump the environmental cost on China. Even local manufacturers might fight it as they don't like the precedent of considering externalities.
Partially due to WTO restrictions and feigned ignorance. You're right that it's non-trivial to properly assess the P&L of outsourced labor especially when most of the externalities (ex. emissions spreading across East Asia, population health) are not immediately identifiable. Globalization ignores these externalities in favor of short term profit. To put a price tag on such effects would be to acknowledge them, which nobody will do.
Have you been paying attention the last couple of years? Every time Trump tried to impose tariffs in order to prop up American manufacturers he faced no end of hostility, endless explanations about why tariffs don’t work, etc.
Hopefully this whole fiasco has opened people’s eyes to the fact that we should try to bring home some amount of domestic manufacturing instead of just saying “those jobs are never coming back” like a certain former president once said.
Government should stay away from trying to control import/export and see the local labor/business adjust on its own.
In manufacturing garbage in = garbage out. Use shoddy tools, end up with shoddy quality product.
It might work for domestic demand.
But internationally? A guy in India won't care about ethics used behind the product as long as he's getting his welder unit for the price/quality ratio he's aiming for. Usually, the volumes of sales accured in this fashion will result in efficiency beyond what cheap labor/lack of regulations can get.
The manufacturing industry local skill availability (manufacturing engineers?) must have degraded here in the US.
the component manufacturers are all right there, which simplifies things.
plus china is really good at building stuff. you want a factory to make something? their ability to spin up production is excellent.
the pay side of it is really much less of a factor than people think. china's just better at this stuff right now.
1. It's network effect and lack of regulations.
I can buy a $50 welder from china, which European or American company can sell me $50 welder delivered to my home?
2. I am in India now and to get any company to even to listen to me, they'll require several phone calls and then they'll quote me some rediculous price, no one responds to any email or text in queries. But Chinese are happy to do so.
Chinese are happy to declare lower value in invoice so that importer can lower the import duties at their end.
3. If you can arrange a logistic partner, any Chinese company will drop the goods/samples to your local wharehouse within a day or two.
4. Even illiterate or village laborers can work in Chinese factory as long as they are getting work done. Heck, they can even create new product for their employer and get paid handsomely for that. I know one Chinese guy who today owns an electronic company, he dropped out in highschool and started selling custom designed electronics. In how many countries, you can design electronic device and sell it without undergoing various checks?
5. One of my friend imports Chinese product (with made in India mark) and inserts a bolt at the destination and gets all the publicity for making in India in local newspapers. Pretty, sure it's also true for many European companies who get everything done in china.
You can start at very bottom, you need to follow any rules as long as you aren't causing big problems for everyone, you are in business.
I've spent time in China, Europe, US sourcing products for my customers. China is completely different ballgame, you need very little money to get started in Chinese business.
My team was trying very hard to source locally made goods from india, now we gave up and went all china.
Any stretched out supply chain for critical path items is at risk in any disruptive event. Globalization of your supply chain is fantastic at making stuff cheaper - but not at making the supply more durable.
This could be a chance to build new business models to help people retrain.
The more cynical way to put it is nobody gets a raise for a detailed continuity of operations plan. They do if they reduce manufacturing cost by 20%.
See: farm subsidies
It doesn't help that many of those on the receiving end of the subsidies hold highly individualistic political positions while benefiting from diametrically opposed socialist policies.
https://prospect.org/special-report/industrial-policy-road-t...
The reason why is because China is cheap. The CCP purposely deflated it's RMB so to attract foreign DTI. Direct trade investment. It also supported financing projects of infrastructure, factories and easy money lending in China in lieu for hiring chinese contractors to build in Chian and in turn then fuel the Capitalist West products that are made in China but "designed in USA" and then that knowledge is spread among other people in China in a copy/repeat system.
There's more, but it's mostly that, good education, focus on science, and he whole no religion thing and being a communist state meaning easy peasy to built factories, no right of way and no time consuming court system, no true intellectual property protection, and of course cheap labor.
With the emergence of good factories, also came good supply chains that were consistent within a single city so things can be deigned, built, tested and redone on scale, easily. Mini silicon valeys in a way.
Then transportation, highway, and then the Chinamail/EMS being subsidized by USPS to help offset delivery cost.
Vietnam is now the new star. :D
Because we don't let people migrate to the US in sufficient quantities to equalize the cost of labor. For better or worse, there's a ton of underemployed folks in China who's alternative to manufacturing is subsistence farming.
Since this is, in your own words, a national security problem, I imagine you're in favor of removing the national immigration quotas the US imposes?
Someone one 60% of the US minimum wage in China would theoretically [0][1] have a more comfortable lifestyle than a US minimum wage worker. In all likelihood this is because they can buy stuff extremely cheaply because their manufacturing costs are lower.
[0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...
[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...