[berserk1010]

Lots of wrong things with the comments

> Contrast that to the US and Europe who keep talking about these things, but don't actually execute(although the US at least tries to throw money at the problem).

"Our analysis of multiple surveys indicates that as much as 91 percent of U.S. manufacturers have reshored some production in 2022, up from just 7 percent 2012. " https://www.assemblymag.com/articles/98200-a-look-back-at-20...

China's annual exports drop for first time in seven years. Among key trading partners, exports to the U.S. led the decline, down 13% from the previous year https://asia.nikkei.com/Economy/Trade/China-s-annual-exports...

> TSMC lost the Chinese market...South Korean officials on the other hand lobbied heavily to get long term exemptions, which allowed them to turn around their profit situation.

Samsung profit tumbles 35% as chip weakness persists. https://www.scmp.com/tech/big-tech/article/3248969/china-rem...

Over 50% of Korean firms missing earnings target in China this year: survey https://www.koreaherald.com/view.php?ud=20230830000611

[whimsicalism]

> Our analysis of multiple surveys indicates that as much as 91 percent of U.S. manufacturers have reshored some production in 2022, up from just 7 percent 2012.

You should always be skeptical of statistics written this way. It is a very unintuitive way to aggregate and suggests that this is the strongest number they could find.

[adventured]

Perhaps, however, the re-shoring is in fact happening. There has been a massive build out of new manufacturing facilities in the US over the last few years.

Near $120 billion spent on new manufacturing facilities in 2022 alone. The surge looks like this:

https://i.imgur.com/Bydq6Hb.png

The US manufacturing sector has added 900,000 jobs since 2014 (according to the US Bureau of Labor Statistics). It was at 12,081,000 manufacturing jobs in January 2014, and January 2024 is at 12,979,000. For the US, which is supposed to be a wilting manufacturer, that's a huge gain over a decade (including the pandemic hit, which slashed 700,000 jobs out temporarily; one guesses the figure would just be even higher minus the pandemic).

Manufacturers don't add a million jobs if they're not expanding presence. Even if they were expanding very slowly, they would do everything possible to avoid adding jobs/labor (most US manufacturing expansion in decades past came from productivity gains).

The US has modest corporate taxes, a good business regulatory environment, amazing capital markets, enormous economic scale, a single giant market, ports that can easily get you to Asia/Europe/Latin America, consumers, and labor. It makes perfect sense that at a time of growing risk of conflict with China, that the US would be reshoring.

[whimsicalism]

> The US has modest corporate taxes, a good business regulatory environment, amazing capital markets,

Yep!

> ports that can easily get you to Asia/Europe/Latin America, consumers,

Yep!

> and labor

Nope. Labor costs in the US are ridiculous and make it non-economical for most consumer manufacturing. This is why real output remains low and we are exploring 'friend-shoring.'

[andyferris]

Well… I believe labor in the US is cheaper than Australia, NZ, UK, and most of the EU. (I’m not sure about Japan). Basically all comparable countries in terms of wealth. So that’s something?

[xxpor]

There's 0 chance US labor is cheaper than the UK at this point.

US: >Real median household income was $74,580 in 2022

UK: >In the financial year ending (FYE) 2022, median household income in the UK before taxes and benefits was £35,000, increasing to £38,100 after taxes and benefits.

[rendang]

NZ is even lower per https://en.wikipedia.org/wiki/List_of_countries_by_average_w... so unless there is a big difference in the manufacturing sector specifically, it's probably also cheaper there

[andyferris]

Wait - the median income in the UK is higher AFTER tax is removed? The median person receives more benefits than pay tax?

[oblio]

US labor is in no way, shape or form cheaper than EU labor, even with the higher taxes in the EU. Have you checked the average or median salary in the US and Germany, France, Spain, let alone any Eastern European country?

[wodenokoto]

None of which are the UK, Australia or NZ.

[ponector]

Tesla pays 20-30$ per hour. Is it ridiculous and non-economical?

[faeriechangling]

There is Canada/Mexico for labour if you just want to get things on the same continent which still protects the US from supply chain shocks somewhat.

[acchow]

> It was at 12,081,000 manufacturing jobs in January 2014, and January 2024 is at 12,979,000.

That is 7.4% growth since 2014.

US population grew by 6.4% during that same period. Hard to see the "huge gain" here.

[chaostheory]

What people arguing against your points don’t understand is that globalism is coming to an end. It started when China initiated decoupling and started their ill advised wolf warrior diplomacy.

[justworkout]

A lot of the "it's time we moved away from China" corporations are moving their manufacturing from the authoritarian communist country of China to... the authoritarian communist country of Vietnam. Vietnam has loose regulations due to being undeveloped and seeking business just like China was 30 years ago. In a decade MBAs will be amazed when they find out Vietnam exerts total absolute control of their businesses just like China does.

Manufacturing hubs are shifting hands, but globalism isn't ending. Companies can still get away with paying $10 a day or less to people in some countries and they're never giving that up.

[csomar]

True but Vietnam hates China, so that will work. Also, the Vietnamese can pretend to be a democratic country in 10 years; so that they look cute in the eyes of your average American. You know, kinda like what the Korean or Taiwanese did.

[whimsicalism]

Taiwan is a democracy

[shiroiuma]

Unlike China, I don't see how Vietnam would ever be some kind of threat to world peace and order or western powers in general. It's not that large, it doesn't have an ongoing war with an important high-tech trading partner, it doesn't seem to have much interest in being a superpower, etc.

[justworkout]

Companies don't care about threats to world peace. They cared that China locked down cities, their factories, and exports. If world peace were their concern, there are a lot of countries they'd refuse to do business with. They usually only stamp their feet and whine when countries do things that affect their profit margins, like push for increased wages, environmental regulations, and locking up a factory to prevent disease spread.

One thing to keep in mind: a few years ago, South Korea with North Korea to allow corporations to do manufacturing in North Korea. [1] The result: mega corporations like Korea's Hyundai and Japan's Family Mart flooded in to take advantage of cheap (probably even slave) labor. It closed not because companies felt morally wrong about it--it closed because the governments forced it to close.

[1] https://en.wikipedia.org/wiki/Kaesong_Industrial_Region

[ponector]

Is it? From what I see, global trade is free as never been in previous century or any time in history before.

[lmm]

Nah, the brakes have definitely been thrown on over the last few years. The US has had back-and-forth with China and Canada, e.g. the huge tariff on that Embraer plane, export restrictions on computer chips, and I think the steel tariff dispute is still simmering away. The UK has pulled out of the EFTA and that's affected supply chains a lot. China has cut off the workarounds that allowed offshore ownership of stock in their companies, a whole lot of what was tolerated in Hong Kong is not being tolerated any more. And that's before you get into the Russia situation - cutting off SWIFT is pretty much unprecedented, and the oil price cap stuff is also new. Global trade is very much less free than a decade or two ago, and that trend is accelerating.

[ponector]

Russia is not fully cut from western financial system. Even few EU banks are there.

Price cap is poorly enforced. All economic sanctions applied to Russia are poorly enforced thanks to globalization and lack of political will of western countries.

Sanctions are severe on paper, but in real life just adds some extra friction.

Unfortunately we are living in times when there are only weak populists in the government.

I wish the next is president will be someone like Reagan, but it is impossible.

[chaostheory]

Yes, but that’s not the trend.

The US can no longer afford to be world police with its navy.

Russia is now outside of the US economic system, while relations with China continue to deteriorate. It will deteriorate further once China attacks Taiwan.

[ponector]

US-China tensions are not that huge at the moment.

Russia is not really cut off from the global trade.

Africa becomes more united and collected.

Globalization is still a trend.

[Log_out_]

Imagine the anti liberal backlash that will come if the first gi dies from forces armed up by neoliberale trading. They will ride the ex-elites out of town on a rail, if they are lucky..

[whimsicalism]

in favor of 'friend-shoring' not really 're-shoring'

[SCM-Enthusiast]

> https://i.imgur.com/Bydq6Hb.png

Looks like an inflation graph to me.

[2devnull]

Without any source information it may as well be written in crayon. (No offense. At least op provided something to back their claim.)

[ethbr1]

Also, wouldn't be surprised if the drive towards minimal-latency shipping is having some evening effect.

Increased labor costs... versus rapid, $$ last-minute transport / port fees to hide latency across the Pacific.

At some point, it's just cheaper to pay the manufacturer more, if they can more rapidly respond to demand.

[bobthepanda]

Paying more just doesn’t work if a chokepoint is clogged up or closed. Chinese ports locking down, congestion at LA/Long Beach, Panama running dry, Suez being blocked, the Red Sea crisis, etc. It is making just-in-time inventory untenable.

Canada and Mexico have multiple entry points without as severe risk.

[thfuran]

>Our analysis of multiple surveys indicates that as much as 91 percent of U.S. manufacturers have reshored some production in 2022, up from just 7 percent 2012.

'Some' is doing a lot of work. What does that really mean? If 99% of manufacturers each onshore 0.01% of their manufacturing, all that has really happened is that everyone can probably now label things "made in america".

[berserk1010]

here are some numbers

U.S. manufacturing construction spending reached a 20-year high, hitting a $194 billion annual rate in April 2023, nearly double the $107 billion annual rate from a year ago. https://thinkkc.com/news/blog/kc-smartport-blog/2023/08/01/i...

In 2021, Intel announced more than $43.5 billion in new manufacturing investments across Arizona, New Mexico and Ohio to bolster U.S. chipmaking and R&D leadership. https://www.intc.com/news-events/press-releases/detail/1638/...

Walmart previously announced a $350 billion investment to make U.S. manufacturing more “affordable and feasible,”

https://www.sme.org/technologies/articles/2023/october/resho...

[whimsicalism]

> U.S. manufacturing construction spending reached a 20-year high

A nominal 20-year high and the increase is since the pandemic. Also this is for construction. Here are some other time series: https://fred.stlouisfed.org/series/OUTMS

Walmart $350 billion investment is over 10 years and mostly is for agriculture and some small electronics.

Also this source is an American manufacturing lobbying group.

[berserk1010]

here are some more

companies have announced over $166 billion in manufacturing in semiconductors and electronics, and at least 50 community colleges in 19 states have announced new or expanded programming to help American workers access good-paying jobs in the semiconductor industry. https://www.whitehouse.gov/briefing-room/statements-releases...

Apple commits $430 billion in US investments over five years https://www.apple.com/newsroom/2021/04/apple-commits-430-bil...

Microsoft will buy enough U.S.-made solar panels to power 1.8 million homes https://www.greenbiz.com/article/microsoft-will-buy-enough-u...

Tesla plans to spend $3.6 billion more on battery and truck manufacturing in Nevada https://www.cnbc.com/2023/01/24/tesla-plans-to-spend-3point6...

[csomar]

I feel like this comment is GPT-ed. You are just putting random numbers out there. They are meaningless. The previous poster gave you an indicator "Real Sectoral Output for All Workers". The indicator adjusts for inflation.

US manufacturing never recovered from the 2008 crisis. And in 2005, the output of manufacturing was higher than it is today (in real value terms, not funny dollars).

[rvba]

Of this 194 billion, how much are one-offs? If intel builds one plant (in 2011) for 43 billion and average investmenr in 2011 was 109 billion, then intel is like 45% of all.

So in 2023 maybe there was some other big one off?

Of course a factory is still a factory, so the one-off thing is a bit misleading, but what I try to say that it seems one big factory takes 40% of investment. What would be the spending for 10? 400 bilion? One is still better than zero though and probably has subcontractors.

[hmm37]

Annual exports dropped on a dollar basis but not when using RMB. On the other hand if you were to check Japan's exports, which newspapers are more likely to report on a Yen basis, it states exports are up due to weaker yen by quite a bit, but if you use dollar basis, it's down by more than 10%.

[berserk1010]

Most Chinese factories in 2023, due to way less orders and needing to clear out their over inventory, had to cut their margins dramatically. thus, more shipped out, but making way less. They won't be able to do that in 2024, with factory shutdowns due to no margins and no more inventory. and that's why:

- Chinese stock market has dropped 11% this year, with 3 year cumulative loss of 6 trillion in 3 years https://www.cnn.com/2024/01/23/investing/china-stock-market-...

- Chinese economy is suffering from deflation

- China’s youth unemployment rate hit consecutive record highs in recent months. From April to June, the jobless rate for 16- to 24-year-olds reached 20.4%, 20.8% and 21.3% respectively

[2devnull]

Why focus on youth employment? Not that I disagree China economy is the toilet. But I do think they have a more nimble economy that can turn around quicker.

If your thesis is that world manufacturing is leaving China to return (primarily) to the US that seems unlikely. More likely it will move to places like Africa and South America, no? We would expect that to happen as China economy transitions and they become the dominant world super power.

[shiroiuma]

>More likely it will move to places like Africa and South America, no?

No. Africa and South America largely lack in basic infrastructure, political stability, and workforce education. You can't do advanced modern manufacturing in places like that. Brazil has some promise, and maybe Nigeria and Chile, but that's about it. Brazil still has major stability problems, not sure about the others.

[berserk1010]

> they have a more nimble economy that can turn around quicker

That's not evident in the persistent high youth unemployment rate. There is also something called middle income trap https://en.wikipedia.org/wiki/Middle_income_trap

> they become the dominant world super power.

There's no sign that that is guaranteed. No sign in culture power. No sign in economic power. No sign in demographics power. No sign in innovation power. No sign in technology power. No sign in military power.

[lmm]

> There's no sign that that is guaranteed. No sign in culture power. No sign in economic power. No sign in demographics power. No sign in innovation power. No sign in technology power. No sign in military power.

They're on course to become the biggest economy in the world. Popularity of their culture is surging (though from a very low baseline) - you hear a lot more about Chinese movies/novels/games, or even software, than even a couple of years ago. Innovation and technology are hard to measure, but on measures like scientific papers published or patents registered they're also surging. There's plenty to criticise about the Chinese government and Chinese culture, but there are definitely significant signs of success.

[signatoremo]

> They're on course to become the biggest economy in the world

They are not:

https://www.bloomberg.com/news/articles/2024-01-25/us-extend...

> Popularity of their culture is surging

Not as popular as Korean or Japanese, or arguably Indian.

> but there are definitely significant signs of success.

This is true. The very fact that China is considered a super power shows that they have made tremendous progress.

[breathen]

> Our analysis of multiple surveys indicates that as much as 91 percent of U.S. manufacturers have reshored some production in 2022

I'm not touching the rest, but this seems like an obvious fig leaf for largely failing to bring production home.

[vkou]

> "Our analysis of multiple surveys indicates that as much as 91 percent of U.S. manufacturers have reshored some production in 2022, up from just 7 percent 2012. " https://www.assemblymag.com/articles/98200-a-look-back-at-20...

With no numbers or rules for the numerator and the denominator, and no clear methodology, and no clear understanding of the biases and the agendas of the authors, these ratios are meaningless.

[pksebben]

So like, if you're going to present contrary evidence, quoting an article by a party with a vested interest that claims they "analyzed multiple surveys" and then fails to link to them or even name them is not exactly helpful.

I'm not arguing the point, mostly because I still don't have reliable evidence to argue about.