Yuan Appreciation, labor flexibility and back to US manufacturing

A Wall Street Journal article (Oct 7, 2011) describes decisons a furniture manufacturer and high end earphone to move production back to the US. The reasons – a 30 % yuan appreciation from 2005 to 2011, US union flexibility and thus lower wages and fewer rules, higher US productivity and lower lead time demands from retailers.  The cost gap with China has thus dropped from 50 % down to 10%.    When can we expect the projected 800,000 manufacturing jobs to return to the US ? Will decreases in fuel prices slow the trend ? Will manufacturing return with more automation and, thus less labor impact, to maintain quality ?

 

About aviyer2010

Professor
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