Let’s review some recent statements on the manufacturing economy:
Now many exporters and workshops here have shut their doors. Others, their work floors partly idle, are cutting costs. Some of the migrant workers who came here for jobs are returning home.
Manufacturers say their profits have dwindled as they pay out more for raw materials and energy.
Companies say the government’s tougher protection for workers and the environment has made it more expensive to do business.
Pretty dire, eh? If only we’d stop outsourcing to China and sending jobs overseas to chase cheap labor, right?
Except it is China.
China’s strengthening currency has made Honghe’s products more expensive for important markets such as the U.S., where the price of Chinese goods surged a record 4.6% in May from the previous year, according to the U.S. Commerce Department. Foreign buyers, used to inexpensive Chinese products and nervous about economic weakness at home, are often refusing to pay more.
China, of course, is sure to remain an export powerhouse for many years. Export figures from China remain strong because the country also supplies industrial machinery and other higher-value products that are less vulnerable to factors such as rising wages.
There is still a real, valid reason for moving manufacturing to China. Yes, I really said that.
China’s domestic market of 1.3 billion people is attractive for companies that want to both export and sell within China.
But many other companies, even after being stung by the rising costs of doing business in China, still don’t get it.
With rising costs weakening China’s appeal as a manufacturing location, some 17% said they would shift at least some operations to other low-cost countries, like India and Vietnam.
Let the globetrotting begin.