Posts Tagged ‘Offshoring’

The vicissitudes of American manufacturing has been a long running topic on this blog. But whether one focuses on firms that have always kept their production in North America or those that have reshored manufacturing, there is the question of whether China or other Asian countries are going down without a fight. A recent article in The Economist suggests that manufacturing in Asia in general and in China in particular is going to be around for a long, long while (A tightening grip, Mar 14).

First, one has to recognize that the growth in Asian manufacturing over the last 20-plus yeas has been spectacular. Check out this graphic.


As the article notes, these numbers get a little more extreme if one looks at “intermediate inputs,” doohickeys like displays and circuit boards that go into finished products that may be assembled elsewhere. (more…)

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The Wall Street Journal has an interesting article about the Caterpillar, which is considering relocating some heavy-equipment overseas production to a new U.S. plant. (“Caterpillar Joins ‘Onshoring’ Trend“)

The article describes the discussion at Caterpillar as an example of a growing trend among manufacturers to move their operations back home.

After a decade of rapid globalization, economists say companies are seeing disadvantages of offshore production, including shipping costs, complicated logistics, and quality issues. Political unrest and theft of intellectual property pose additional risks. “If you want to keep your supply chain tight it’s hard to do that with a 16-hour plane ride from Shanghai to Ohio,” said Cliff Waldman, an economist with the Manufacturers Alliance/MAPI, a public policy and economics research group in Arlington, Va.

So is the world not flat anymore?


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