Manufacturing in China is not cost-effective

Posted in: Blog on May 28, 2012

Sunday May 27th, 2012

By Debbie Hall – Martinsville Bulletin

Manufacturing in China is not cost-effectiveWith as many as 3 million jobs expected to return to the United States and Mexico during the next eight years — primarily in the American South — China has lost its manufacturing edge, according to an economic development expert.

“Our biggest competitor is dead, and for a community like this, that’s good news,” Mike Randle, president and publisher of Southern Business & Development magazine, said Thursday during a visit to Martinsville.

The reason is strictly economics, he said.

“Manufacturing in China for U.S. consumption is not cost-effective. Basically, China has priced itself out of the market,” Randle said.

He said that when companies first started moving their operations and business to China, workers there earned an average of 58 cents per hour.

Wages have increased to $3 and $6 per hour, depending on the location, he estimated. While not cost prohibitive for products that will be consumed in the Asian market, shipping costs for products that are consumed in the United States add to a company’s bottom line.

Read More…