News / Economy

US Experts See Growing Desire to Curb Outsourcing to China

US Experts See Growing Desire to Curb Outsourcing to Chinai
X
April 28, 2014 10:58 PM
For years, China's companies have been selling far more goods in the United States than American firms sell in China. This trade deficit hit $318 billion in 2013 but as VOA's Bernard Shusman reports from New York, there are some indications the situation is changing.
Bernard Shusman
For years, Chinese companies have sold far more goods in the United States than American firms sell in China. This trade deficit hit $318 billion in 2013.

A key reason is that many U.S. companies have transferred their manufacturing to China, a process called offshore outsourcing, resulting in the loss of American jobs. But the tide could be turning.

“As China has built its industrial manufacturing base, it’s become very attractive, so not only is it less expensive to manufacture there, but all of your suppliers are there, the whole infrastructure is there," said Rosemary Coates of Blue Silk Consulting, who has helped companies outsource. "But we’re seeing some reversal in that now. In the last year or two, there’s been a lot of attention paid to re-shoring. “

Re-shoring is bringing manufacturing and services back to the United States. Coates says the shopper plays a major role in where products are manufactured.

“The price of shoes may go up, in fact, if they are produced in the U.S. from U.S. products, but we expect to get most of the pricing back to within 10 to 15 percent of the international price," Coates said. "So you have to make a decision as a consumer whether you want to pay the extra 10 to 15 percent to buy a product that is made here.”

Major American corporations like Apple, General Electric and Dell manufacture in China, but sell in the United States.  With U.S. unemployment at 6.7 percent, manufacturing and jobs are a political issue in Washington. But experts say there are also good business reasons to bring manufacturing back to the U.S. mainland.     

“One of them is higher productivity of U.S. labor aided by advancements in computer technology," said Natalia Levina of New York University. "Other reasons might be the need to keep inventory levels low [which] means that manufacturing has to be close to consumption."
    
However, cheap labor in China and other countries is expected to continue to constrain re-shoring to the U.S. in the near term.   

“It isn’t a matter of just chopping off production and bringing it back to the U.S.," said Coates. "It’s really a thoughtful process of design, of automation, of innovation, and localization of the product and then being able to produce that for the local market.”

As imports from China continue to be unloaded on America's docks, analysts say it will take business ingenuity to develop new products, new markets and new American jobs.

You May Like

Video Miami Cubans Divided on New US Policy

While older, more conservative Cuban Americans have promoted anti-Castro political movement for years, younger generations say economically, it is time for change More

2014 Sees Dramatic Uptick in Boko Haram Abductions

Militants suspected in latest mass kidnapping of over 100 people in Gumsuri, Nigeria on Sunday More

Video Cuba Deal Is Major Victory for Pope

Role of Francis hailed throughout US, Latin America - though some Cuban-American Catholics have mixed feelings More

This forum has been closed.
Comment Sorting
Comments
     
by: Not Again from: Canada
April 29, 2014 10:05 AM
And therein lies the stupidity of the current model of GLOBALIZATION, because it does not restrict trade deficits. Over time, the deficit will just continue to grow, because of the economic advantage of ever increased greater production scales. In addition, this unrestricted Globalization, is in fact poisoning and killing the people of China. China has become the World's's factory concurrently it has become the World's most polluted country, which will result in the premature deaths of hundreths of millions, the next generation of China, will pay a heavy price for this terrible situation; while at the other end, great social unrest will cause massive probles from un/under employment, civil unrest, displacement, and potentially the collapse of nations.


by: max from: london
April 29, 2014 5:38 AM
"10% to 15% increase" not even in your wildest dreams. The price will shoot up by a minimum of 80% to 95% if produced in the US. Just imagine paying $2000 for an iPhone. Id rather keep production in China or India, thank you very much. Technology will be limited to a privileged few if we re-shore.

In Response

by: Brilliant from: USA
April 30, 2014 7:24 PM
Soooo...then let's keep sending production and jobs to China and India...so that they can be unloaded back in the U.S. I can't wait to see how all the unemployed/underemployed will find due to pay for their iPhones. Oh...I guess it probably won't matter much -- because as we increase the industrial and technical know-how of China and India -- it will be a moot point when THEIR companies become the brands flooding the market. Why do you think Walmart is doing their Made in the USA push? THEIR customers have no jobs...and as such...their customers have NO MONEY to spend in their stores.

In 20...30...40 years people are going to look back and think -- what a bunch of idiots we were...

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.