U.S. Manufacturing costs are almost as low as China’s
fortune.com
fortune.com
The costs are definitely rising in China for English speaking technical labor such as the engineers we need. We compete with companies like Apple and all the other foreign companies rushing to China these days to keep them employed. But we are still talking much lower salaries overall, for example, $30,000 USD/year for a degreed Sr. Electrical design engineer with 20 years experience.
Regarding rents, the Shenzhen central business section rents are expensive now and cost/sqft comparable to anywhere else. However, good industrial space is still far cheaper, for example, I just leased an additional 12,000 sqft high quality assembly space with low ESD floors in a technical park along with 8 dorm rooms to sleep up to 32 people (4 per room - last owner had 8 per room). Lease on this new space cost me $3500 per month. There is also a kitchen ran by the tech park where they serve 3 hot buffet style meals per day for $2/day/worker. I'm not aware of anyplace in USA where you can lease a space like this for $0.29 per square foot nor get a buffet meal for $0.66 cents nor have door rooms for workers. Now, it is competitive to find this space and you need to lease when you find it not wait 1 day, it took us 4 months searching and we lost several spaces waiting 1-2 days, but it exists.
But ultimately what is far cheaper here in China and the main reason I must remain here to make money is for the lower cost of the materials required to actually build the products.
There is a critical mass of suppliers here where you can find half dozen capable suppliers for nearly anything you'd need to buy. For example we do a lot of custom molded plastic parts and many times I can make multiple cavity hard (300K shot life) injection mold tools for plastics for $3K-$5K USD and it would cost 5x or even 10x as much to buy them in USA. No less, bolts, nuts, screws, electronics all vastly cheaper here.
Lastly, as someone else noted, the cost of shipping is much cheaper when you originate your shipping quotes from a Chinese account, especially for air shipping to USA, rates originating from my China company's Fedex account is routinely 50% cheaper than what Fedex quotes in the USA. This really adds up when you need to ship stuff around the world quickly.
http://gizmodo.com/5878209/why-apple-doesnt-make-the-iphone-...
So it's more disturbing to me that you can't find such competitive/numerous parts makers in US.
But hey, profits.
There are various ways to slice it, but if you take the broad sector of "machinery and equipment" as defined by the U.S. Department of Commerce, domestic suppliers have about a 60% share of the U.S. market overall: http://selectusa.commerce.gov/industry-snapshots/machinery-a...
For years, I wanted to do business(small quantities at first) in China, but always chicken out when I start to think about the risk of fraud.
Do you know of any service that vets these factories, and is not subject to payoffs? I guess you need to travel there if a big order is on the table.
That said, we are currently A/B testing the buy button on the front page, so 50% of people see the buy button right now.
Also, you can see the full shopping cart page at http://buy.pavlok.com
Just to add a little context: in some EU countries (even EU-15, such as Portugal), people with similar qualifications are actually paid less than that.
As a rule of thumb, when comparing a US salary with an European, I divide by 2 the number and I roughly get the equivalent in EUR and after taxes* (and considering cultural differences like the healthcare is already included in taxes, etc.) So 30,000 USD/year would be something like 15000 EUR/year, which is extremely low even for a engineering graduate working in academia.
* With "after taxes" I mean the part of the salary that you don't even receive, not the income tax that you pay (or receive back) once a year.
For those reading this that are interested in software costs, here's a similar breakdown:
A Senior Developer (Java, C# being predominant technologies), with around 7-10 years' experience, or similar QA, good English language, makes around USD 25,000 per year. The market gets very thin at 10+ years, especially for English speakers in management, and ceilings at around USD 45,000 per year unless the person has had international placements. [At more junior levels, income is less, with starting salaries at around USD 6 - 8k per year.]
For those reading, this is gross salary (individual income tax at 15-30% for these salaries), but the company contributes around 40% in addition to this gross salary as social security benefit.
For a bigger city like Shanghai, add 30-40% to the above.
A software worker probably won't live in a dormitory. They'll have an apartment and mortgage, often close to their office complex (software parks are constructed as mixed commercial-residential developments over 20-30 square kilometers, with residential areas on the peripheral and offices / shopping mall in the center).
I'm surprised your rent is so low. Modern, international grade office buildings go for around USD 150 per square meter per year (or, around 2.5 Yuan per day). Bigger cities are a little more. On the outside of Shanghai it is around 3 Yuan per day for an office in a technology park in the outskirts of the city.
Local software parks also do food, but prices are more like $2.5 (15 Yuan) for a meal.
No different to anywhere else in the world, just that it happened more recently.
I am honestly curious. I know for example that the US was very dirty in the early 1900s, but we had 100 million people. If China was dirty in the 2000s with 1.3 billion people, it stands to reason that China was more dirty, no?
Postulating that this was a necessary step to industrialization might require some strong evidence.
I remember hearing about an 8-year old girl suffering from lung cancer. This is very sad
http://www.theguardian.com/environment/chinas-choice/2013/no...
Recently read a story in Rolling Stone on pollution in Vernal Utah from fracking.
http://www.rollingstone.com/culture/features/fracking-whats-...
Many high risk wells in the US are not being inspected. And the fracking industry doesn't want anyone to.
http://thinkprogress.org/climate/2014/06/23/3451919/high-ris...
There is some interesting reading regarding China's "green GDP" accounting project. Here is one recent account:
http://www.businessspectator.com.au/article/2015/4/9/china/c...
Here is my brief summary:
1. pick a relatively simple yet crude (or perhaps misguided) metric of progress - GDP
2. reward / punish regional leaders for their ability to maximise this metric
3. spend effort creating a more accurate metric of progress - "green GDP" - that accounts for the costs of pollution
4. trial the new metric and observe that the more accurate indication of progress reveals much less progress than the original metric - perhaps negative progress in some cases!
5. regional leaders are deeply resistant to introduction of the this new, more accurate metric, as it shows they have not actually being doing a great job
6. adoption of the new accurate metric fails for political reasons, as it is very unpopular!
You have to laugh, otherwise you might cry. The article above ends with a few positive notes, so there may be some positive change looming in future!
I personally think there is more potential for China to make dramatic, sweeping positive changes than certain other countries (e.g. Australia, where I live).
http://www.economist.com/news/special-report/21569570-growin...
Here is a key quote from the article:
"BCG used to argue that companies unwilling to send their manufacturing to lower-cost countries were putting their very future in jeopardy. Now it says that companies will bring manufacturing back to America from China. As soon as 2015, says Hal Sirkin, a consultant at the firm, it will cost about the same to manufacture goods for the American market in certain parts of America as in China in many industries, including computers and electronics, machinery, appliances, electrical equipment and furniture. That calculation takes into account a wide variety of direct costs, including labour, property and transport, as well as indirect ones such as supply-chain risk."
Also worth noting is that the US is often a bigger market for some goods.
But it's also worth noting that German and Japanese manufacturing has been more expensive that US manufacturing for decades and still in some areas Germany and Japan do very well.
It's interesting to see an article that puts fracking up as the key reason. Energy costs are not irrelevant but are also often not a big part of the cost.
Strong apprenticeships and unions (meaning very high quality, loyal workers therefore low turnover) and an obsession with quality can all be important advantages in the competition with China:
http://www.economist.com/news/business/21606834-many-countri...
We've seen it at my business. Chinese suppliers crush American ones on low-skilled goods but we pay top dollar for intermediaries and local stuff when we can. Scaling is the real key of Chinese manufacturing, though. Cost we can negotiate on and play around with, but speed and scaling? Chinese factories crush the Americans in my line of work.
However for more durable goods I could definitely see a resurgence in US manufacturing with the right investments were made in extensive semi to full automation on the design/factory side. China factories are in a tough spot in the regard since employing more people is encouraged by the government, but automation eats away at the low end positions. See Foxconn's 1 Million+ employee count [1] and recently announced slowdown of automation take over [2].
[1] http://www.foxconn.com/Files/annual_rpt_e/2014_annual_rpt_e....
[2]http://www.computerworld.com/article/2941272/emerging-techno...
Almost?
If I had a "technology" that was immediately discernible by any buyer (a plastic cup, a game board with an image printed on paper and glued to cardboard), I might make it in China, but for any non-obvious technology, I would assume that any money I saved on COST by making it in China, I would lose on PRICE when my manufacturer's brother-in-law started competing with me.
This is why many manufacturers use last-gen tech in their products within China.
Or plain old fashioned outright theft. I did business for a few years with a Chinese supplier, the contact was made from a (local Chinese) reliable friend of many years who did international business so had contacts. After two years of a pretty seamless business relationship, one day the supplier decided to simply disappear with the $45k deposit on an order.
I understand this is fairly common when making knockoff goods, too.
Absolutely. The factories I deal with OPENLY DISCLOSE what contracts they have (not price, but brands) with other companies in my line of business. This is unbelievable. I didn't even ask for this information - and never would want it, given the implications - but they VOLUNTEERED it as part of their sales pitch.
And what are those companies - many of them multimillion dollar entities - going to do about it? Switch factories? Certainly not file a lawsuit. It's crazy.
It is worth noting specifically, because the costs of China not being on board with protecting innovation means 1) they create a lot less of it (which is both their loss and ours) 2) the stuff you manufacture there has to be protected by the laws of physics, the software, and access etc, rather than a simple code of laws.
This cost is clearly not insurmountable - everyone manufactures in China. But they have to take precautions as they do so, instead of just relying on local law.
By the way I don't think this is in their interests, and I think they will move away from this model with time. There are no doubt great Chinese inventors and creators who need very little by way of protection before creating amazing things that are temporarily protected all over the world. It is almost just an ancillary benefit that they will also start to respect what others (i.e. the rest of the world) manufacture there.
"If you buy the cheap goods from abroad today, you can often get them shipped "free" around half the planet and to your home. It may be cheaper to order a remote control with batteries from China and throw the remote away, rather than going to the store and buying a pack of batteries.
That this may be a problem for local businesses is obvious, but the reason you can order extremely cheap goods from China is far more complicated than you think. Most countries in the world have actually joined forces in an international collaboration to allocate freight costs between themselves a partnership, where the importing countries eventually ended up holding the bag.
This agreement is called Universal Postal Convention, and it's important for many of us in everyday life. It is quite simple to regulate mail traffic between all the countries that have joined, not to mention how much it will cost to ship the item. The intention behind the agreement was good when it was introduced, but over a hundred years later, the social conditions changed and it helps to create distortion of competition across the world.
Universal Postal Convention was created in a completely different era than the one we are in now, namely around 1870 - at the time it was snail mail which reigned, e-mail was by no means invented and not even the largest visionary had thought of the idea of sending the mail electronically.
If we go back to the time of the Convention's birth it was not so easy to send a letter abroad. Each country had to enter into their own individual agreements with every country they wanted to send mail to. If you wanted to send mail to a country who didn't have a mail agreement with your own country, you would have a problem.
The solution could then be to send the letter via a third country, which had agreements in good standing with both the country you were sending from and the country you would send to.
To calculate the postage was no trivial matter either. Here you risked the postage getting split up in multiple parts, so that the first part covered the mail crossing the border. Then the poor postal workers had to sit with price lists from other countries to calculate the rest of the postage, after which they also had to stick on a stamp for the recipient country. Should the letter go through several countries on its journey, one can only imagine how cumbersome the system was.
One particularly cumbersome system, without a doubt, and so thought the those who lived at that time too. Thus, the Universal Postal Union, UPU, established in 1874. The main pillar of this association is what we call the Universal Postal Convention.
The Universal Postal Union was a set of rules that regulated postage prices, and one of the most important rules was the various national postal service does not distinguish between mail from inland and mail from abroad. As a final pillar was the rule that the postal service in each Member State would gain the postage that was paid to ship the overseas mail.
It was the end of letters filled with stamps from many countries. The stamp of the sending country was enough to get all the way to the recipient's mailbox.
In 1947 UPU became a specialized agency within the UN, and it's currently the second oldest organization within the United Nations, surpassed only by the International Telecommunication Union - ITU. To become a member here it is a requirement that the Universal Postal Convention is enacted. In 1969 a central and important change was enacted, it introduced a so-called terminal fee, to be paid if one country mails more to a country other than what it self got in return.
This system makes it fairer for those countries that receive a lot of mail. Here in Norway we get considerably more more mail into the country, than what we send out, so this is an important factor we should return to later in this comment.
You can still send letters and mail in an easy way, anywhere in the world. The big carrot is still another. If you buy from overseas you are in fact pretty much guaranteed a relatively nice shipping price. How nice shipping price is depends a little on how things are sent.
If you order small electronics directly from China, you can get very cheaply from it. Goods are basically reasonable, and shipping charges are usually a joke. Many times you get free shipping, even if the course is baked into the price. This low shipping cost, you can thank the Universal Postal Convention for, since Norway has committed to deliver the item to you without any additional premium.
Overall, Norway recieves way more mail than it send from us. This means that Posten Norway gets more terminal charges than what we have to pay in terminal charges to other countries. The problem is that these fees are underpriced compared to what Posten Norway spends to deliver the mail. How much Posten Norway lose on these mailings, they refuse to tell:
> The details are confidential, but as a net importer of mail Posten Norway gets more from the terminal taxes than we pay for exports to others. Our distribution costs are not taken into account in this calculation. Unmet costs we have on international mail must necessarily be covered from other revenue in postal operations, said press officer at Posten Norway, Hilde Ebeltoft Skaugrud.
So far we are assured of low freight rates from abroad, but there may be changes in time. There is no denying that many countries are experiencing that the money isn't enough and quickly disappears. In a few years this may change.
> The Convention is revised every four years, next in 2016, and in this connection we discussed the changes. Posten Norway are working to achieve better alignment between terminal charges and distribution costs, Ebeltoft Skaugrud tell us.
As of today, Posten Norway gets a variety of packages and letters from abroad to be handed out. They get paid for the job, but nowhere near what the job is costing them. The cost will be subsidized by the other mail clients, those who send packages and letters in Norway.
When two countries are sending mail to each other the weight of the mail from the country that sent the least mail to the other country is counter-accounted. For all the excess the terminal fee has to be pain, which is related to the general economic situation in each country. The result is that Norway will pay a higher fee for their excess kilogram of mail than countries such as China and the United States does. The Chinese have a right to send parcels abroad for an amount considered fair in China, the problem is that the sum is terribly low in a Norwegian perspective.
In a survey made by the German consulting company Wissenschaftliche Institut für Infrastructure und Kommunikationsdienste GmbH in 2011, there were several interesting findings related to terminal charges. There Norway comes out as one the biggest losers due to large net imports and high internal expenses.
The consulting company also shows that several other have also advocated for a change. The (American) Department of Justice stated, among other things, in 1990 that the terminal fees that differ from the actual cost of delivery has an ability to disrupt the competition. The European Commission said something similar in 1992, when they stated that the terminal fees should be based on what it costs to deliver the consignments in the recipient country.
In fact the Universal Postal Union itself makes a statement on the issue a few years later, in 1997; and makes it clear that terminal charges not based on the real costs within the recipient country will create incentives for trade that is not financially sustainable with the great flow across borders.
We should be very cautious about predicting anything, but we can not envisage that the current situation will continue forever. Various foreign online stores of various sizes are nearest subsidized shipping to Norway, and considering the increase in imports is probably only a matter of time before something is done. The first opportunity to make a change is 2016 and we will be surprised if it's not going to be a good deal more expensive to receive packets from the rest of the world then."
// Article from HW.no (Norway's Ars Technica) translated with Google Translate and with the language fixed manually. http://www.hardware.no/artikler/guide-verdenspostkonvensjone...
This is potentially a double negative for you, 1. if you labor or other costs are higher, you lose more, 2. your carriers try to make up for it by increasing your outbound shipping costs, affecting your exports
Instead of doing real-cost rebalancing, the "fairness" balancing, is susceptible to be pulled down to zero and runs the risk of a disconnection with labor, energy and environnement costs. Further, this type of market mechanism favors a runaway dynamic ie. if a country ships a lot, it gets even better and better for them, as they develop economies of scale.
Sounds like whatever made the multi-stamp system too complicated before 1969 might now be feasible with technology, as it may have been the more market-true, and thus future-proof approach.
Which only further incentivizes people to buy the item from China instead of domestically.
I had no idea how they could possibly have shipped them to me, in just about 10 days time, when the cost of the bulb seemed lower than the cost of the shipping. So I guess this is another reason why USPS is bankrupt, because they are legally obligated to deliver the parcel, basically for free, after a few cents were paid in China to put a stamp on it. Amazing!
Since it is the last large severely underdeveloped place with cheap, young capable labor and lots of natural resources, this might actually be manufacturing's final frontier.
But I could assume that the welding is done in Shenzhen (maybe GP chips in where he sources welding at 3$/h?).
http://www.numbeo.com/cost-of-living/city_result.jsp?country...
That hourly rate wouldn't even covering rent of an 1-bedroom apt outside of centre.
* wedding gift
* "business" expense that you did out of your pocket (take your co-workers to lunch, buying gift for your clients)
* gifts (giving red envelopes during Chinese New Year, friend / elder birthday)
* rent
* personal saving
* family support (especially supporting your parents)
* medical expense (for a lot of people they have to pay before they can see a doctor)
Here is an article http://business.sohu.com/20131210/n391561808.shtml. Many people can only afford a tiny room today in the city and this depressing phenomenon is coined "蝸居" (snail house, about 10 square feet, and sometimes less, or sharing that tiny space with two or more people), and has been televised and documented multiple times (e.g. a TV drama called 蝸居 was made a couple years ago).
If you are a blue collar working at a city far away from your hometown, you have to go back to your hometown at least once a year (during new year break), and usually it is expected that you have to get a lot of gifts from the city for your family and your neighbors (to thank your neighbors for helping your family / keeping an eye on your family in your absence).
You can almost say the Chinese culture is all about showing gratitude with gifts, this is why e-commerce is such a big deal in China (also why foreign brands like Apple can make so much money in China ;-))
I am asking about these two specifically because they make the biggest difference between the "western" culture and the Chinese culture. The other items on your list also appear in the lives of the citizens of many European/European based countries.
Costs in the large Chinese cities (which includes Beijing, Shanghai and Shenzhen) has been steadily increasing over the past couple decades. It can still be seen as cheaper to live depending on what you compare it to (e.g. SF) but to give a point of reference, Shenzhen is on par with Berlin in terms of cost of living (http://www.expatistan.com/cost-of-living/comparison/shenzhen...). Shanghai is actually more expensive than Berlin too, Beijing is slightly cheaper.
I couldn't have comfortably lived in Shanghai back in 2005 with 3,000 RMB, and I'm extremely frugal (I don't drink, don't smoke, don't go out and my main hobbies include working out and reading).
You're not offering any constructive feedback while criticizing from your pedestal of inaction. I assume you used a throwaway because you didn't want to attribute that to your personal identity.
Billions of Chinese were lifted from poverty by American globalization, granted at the detriment of American jobs. However it forced American jobs to be more information focused. And if you're Chinese you should understand that. If you're American you can be proud you helped lift a country from the third world into the second.
edit: This is an honest question.
They are not actually communist; they are an authoritarian state controlling a capitalist economy. They started down that path in the late 1970s under Deng Xiaopeng.
Before that, the state did a very poor job caring for its citizens. Millions died of starvation, persecution, and other ills. Look up the Great Leap Forward and Cultural Revolution, two government programs, as examples.
After that, probably never in the history of humanity have so many in a time and place escaped poverty as those who have in China. However, the country is so large that there are still many that are very poor.
But back in real life, while $3/hr may not be a lot compared to what some folks make, it's $3/hr more than someone making $0/hr makes, and it's triple what someone making $1/hr makes, and indeed a full 50% raise for anyone making $2/hr.
If I could wave a wand and give everyone who currently makes 0, 1 or 2/hr the skill set and the opportunity to suddenly make $3/hr, I'd be happy to do it. And the billions of people (hundreds of millions maybe?) who suddenly got (in their terms) a huge raise would be pretty happy about it too.
It is true that we should care about conditions in factories such as these and work to improve them. It's also true that if you insisted that Chinese workers get paid what American workers would, there would have been almost no factories and the entire country would still be in desolate poverty. Yes if there were no factories then probably the environment would be in a better condition.
It's a very complex situation. Just picking one angle to it and insisting that angle holds the whole truth does not help anyone.
Do leaders (political & economic) in non-western countries ever deserve any responsibility for their countries overall well-being?
It's an issue that China has been criticized for a very long time over.
http://www.nytimes.com/2013/06/12/world/asia/man-details-ris...
or even
http://www.wsj.com/articles/chinas-tech-factories-turn-to-st...
This isn't a "well suck it up because at least you're getting paid /something/" issue. Chinese workers can still be beneficial to their country and the world while making a decent wage and without being abused.
If it weren't for American capital, and the American consumer, China would have developed drastically slower (if at all). China's GDP per capita in 1994 was ~$480. That's ~45 years after the Mao revolution.
There was no alternative than to pay them cheap wages to start. If you paid them 'first world' wages, nobody would have set up manufacturing in China to begin with; those manufacturers would have kept that manufacturing domestically or sought out another cheaper source. The sole reason China boomed the last 20 years is that they had 250 million low-wage workers available and willing to do low-cost manufacturing.
If we're talking exploitation, the primary exploiters of cheap Chinese labor, are the 200 Chinese billionaires that have gotten rich off of leveraging their own impoverished workers - they own all the factories, the real estate, et al. China's wealth inequality puts every other country to shame.
There is a difference between being successful financially and being able to sleep well at night.
What is actually happening is good for them, and the majority of them will not side with you or even care how you sleep at night. There will always be casualties and exploitation of workers in China, but that's more due to corruption than it is to systematic underpayment of Chinese workers.
The Chinese factory workers are choosing from the options provided. From their perspective they've been given a better option. From a western first world perspective, people here can't seem to relate to how $3/hr could possibly be a better option, but it is. Over here we have the benefit of minimum wage, welfare, higher standard of living, etc. Unfortunately it is a very egocentric viewpoint to not think of this from the perspective of an actual factory worker.
American business is a significant reason China was so poor to start with. To understand China, I recommend reading what is meant by the 'century of humiliation'.
> There was no alternative than to pay them cheap wages to start.
They can pay less than American-level wages, and yet still pay a living wage and provide safe, reasonable working conditions.
> the primary exploiters of cheap Chinese labor, are the 200 Chinese billionaires
That someone else does wrong doesn't justify doing it yourself. Otherwise, everyone's standard is whatever the worst do.
I've always found that to be the absolute shittiest of rebuttals, given by those who have absolutely no point whatsoever. This person is not "giving" anyone a job; they are not being seeing a group of people and saying, "Hmmm, they look like they could use some work. I will create some and give it to them." No. This person needed some work done, and they were offering work. That's it. The person is not a "job creator"; those things don't exist.
"If you're American you can be proud you helped lift a country from the third world into the second."
And do we get to be proud of the complete and utter skull fucking the Chinese environment has taken as a result of that?
I had a bunch of money. I could have kept it locked in a box somewhere. Instead I decided to pay a bunch of people to help make something cool. Yes, that's a transaction, but for my part, I didn't have to engage in it. (In fact some days I kind of regret it, given all the garbage one has to put up with when running a company.) I could have kept the money locked in a box and felt happy that I feel rich. Or something.
No they don't. There are people who want work done, and people who provide that work. That's it. You're not "creating jobs" simply because you feel like you want to create jobs. You have decided that getting the work done will benefit you more than not having it done. That's it.
If "I have money, and I have a thing I am willing to exchange it for that requires someone else to do work" makes you a job creator, everyone who purchases anything in the economy is a job creator.
Business owners factor costs into their strategies. They/we don't just have a bunch of jobs, and then go looking for people to fill them. China's cheap labor force has made possible products that wouldn't exist otherwise.
Basically there are people there that need to make a living wage to pay for food, medicine, education, etc. The reality is without the $X/hr jobs they have no other options or worse options.
An external actor like you, me, or a business can sit around talking about how shit it is, or go in and offer something at least slightly better. You're basically trashing the people who decide to take any action at all (giving them a low paying job). If the action isn't taken, they go back to their worse option. From your perspective you are failing to empathize with the Chinese because you don't see their other crappier options or can't imagine that they could possibly have crappier options.
No, they were lifted from poverty by their own hard work.
This means more that cost of inputs (materials, transport of them, etc.) for hardware will go down in the US, while at the same time companies are getting more efficient per worker - reducing our exposure to foreign cheap labor.
Re: Welding - We're actually seeing a lot of advances in automated welding setup, etc. that will allow robots in the US to compete with Chinese welders.
Automation keeps getting cheaper and better, too.
The shares of labor cost, energy cost and transportation cost are differing very much from industry to industry. Also, automate of the production of different products is differing very much. You can not compare for example car factoring with software development or food production.
Of course, you can argue that cheap energy gives an industry an advantage. But what happens here are things that are independent of each other. For example, labor costs in China have risen and it gets more difficult to find cheap and adequate workers.
Also you always should consider the consequences: Will the short-terim-advantage for some (!) industries really outweigh the long-term consequences?
Labor costs matter far more. As a rule of thumb, it takes a 4x labor cost advantage to justify outsourcing to China by a US company. (For a China company to sell into the US requires less of a labor cost differential.)
Having an educated labor force would keep US be competitive. Unfortunately that means getting higher and higher degree.
I'm not sure there is a simple answer to any of these problems.
Fact is many companies are now moving away from China, and are signing up new manufacturing sites in other Southern Asian countries such as Thailand and Vietnam for lower operational cost (note a lot of the U.S. companies give contract to oversea manufacturer, so it is these manufactures moving away from their own domestic sites - for example, Foxconn being a largely a Taiwanese company Foxconn manufactures outside of Taiwan).
I don't know how close operating in the US vs operating half of the business offshore is. This is like hiring consultant oversea for software development. The first burden is operational efficiency; it is painful to manage oversea when you want your "brain power" to be in the US. For example, project manager might have to get up early say 6-7 AM to do a stand up and then follow up at 9/10AM (because your business owner / product owner don't get up at 6 to talk about progress). If there are bugs that need to be resolved during US hour, you still have to pay the extra hours. You are wasting time going-back-and-forth because your offshore team will get off work when you want to fit a meeting in the afternoon.
While most Chinese workers do not form union (fear of repucation), workers do come out and protest from time to time (see Foxcoon strikes). Local laws also do not often favor US companies, and local laws can be a pain in the ass.
The only thing I can think of that will keep some companies manufacturing outside of the U.S. is that these companies simply do not have cash in the US. Imagine a company like Apple (Apple has like 90% of its cash outside of US) the only way they can spend that money is do stuff outside of US.
This is just my uneducated opinion, having little idea how business and economy works. I am all for moving closer to proximity. If you are selling in the U.S. it makes sense to manufacture her. This is why many manufacture sites are now built in Mexico (looking at car makers). Shipping cost have been reduced in the last two decades because now we have bigger ships, but still, there is a schedule that you need to maintain.
Another classic example where some part of "making" are likely done domestic (or a place where known for using advanced technology) is the classic X ThinkPad series. The agreement Lenovo have with IBM is that the main design is to remain in a Japanese lab AFAIK. I am sure Lenovo has way to do stuff in China and do stuff in Japan, and still claim stuff are done in Japan. But branding is a good motivation for keeping certain things local.
The problem is more that the Chinese market is still highly fragmented and not easily searched without insiders on the ground. Alibaba is just scratching the surface on transparency in global supply chain, but once the market becomes legible, the local supply chain thing won't matter as much.