this post was submitted on 27 May 2025
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China ain't the cheapest anymore and has not been for a while.
No, but it's substantially cheaper than the US and cheap enough that moving operations isn't practical. Companies are moving to other south Asian countries, but China remains a staple for reasonably competent and reasonably cheap labor.
China also has an established, robust, and technically advanced manufacturing sector. That honestly is the biggest thing keeping manufacturing there. Things made from raw resources could be moved easily but the lower labor costs would be offset by the decreased demand due to most of their customers being back in China.
Things are even worse for anyone making something that requires manufactured components as all those suppliers are in China so now not only are they taking a hit for reduced demand, but also the headaches of having to import their components from China just to build anything. Labor would need to be ridiculously cheap compared to China for that to start looking like a good idea.
So does the US, they just do a lot less manufacturing than they used to because it became cheaper to send that to other countries. The US does a lot more design work than actual production.
Right, which is why labor moved to China in the first place. If labor gets more expensive in China, manufacturing will move elsewhere, both for components and finished products.
The only way to get large scale back to developed countries is through automation, which dramatically reduces the labor cost. But at that point, it's not creating jobs anyway, so why not do that nearer to where the raw materials are extracted anyway?
I personally don't understand why developed countries are so interested in moving manufacturing back. I understand it's not great for national security and whatnot, so it makes sense to have some domestic production capability if there's ever war in the region, but a lot of that issue can be solved by diversifying where things are produced, since war is unlikely to impact the entire supply chain if you maintain naval dominance, which the US has and they share it w/ other developed western powers.