China really is to blame for millions of lost U.S. …

China really is to blame for millions of lost U.S. …

May 15, 2018

“China really is to blame for millions of lost U.S. manufacturing jobs, new study finds” By Jeffry Bartash, MarketWatch Millions of Americans who lost manufacturing jobs during the 2000s have long ”known” China was to blame, not robots. And many helped elect Donald Trump as president because of his insistence that China was at fault. Evidently many academics who’ve studied the issue are finally drawing the same conclusion. For years economists have viewed the increased role of automation in the computer age as the chief culprit for some 6 million lost jobs from 1999 to 2010 — one-third of all U.S. manufacturing employment. Firms adopted new technologies to boost production, the thinking goes, and put workers out of the job in the process. Plants could make more stuff with fewer people. In the past several years fresh thinking by economists such as David Autor of MIT has challenged that view. The latest research to poke holes in the theory of automation-is-to-blame is from Susan Houseman of the Upjohn Institute. Academic research tends to be dry and complicated, but Houseman’s findings boil down to this: The government for decades has vastly overestimated the growth of productivity in the American manufacturing sector. It’s been growing no faster, really, than the rest of the economy. What that means is, the adoption of technology is not the chief reason why millions of working-class Americans lost their jobs in a vast region stretching from the mouth of the Mississippi river to the shores of the Great Lakes. Nor was it inevitable. Autor and now Houseman contend the introduction of China into the global trading system is root cause of the job losses. Put another way, President Bill Clinton and political leaders who succeeded him accepted the risk that the U.S. would suffer short-term economic harm from opening the U.S. to Chinese exports in hopes of long-run gains of a more stable China. No longer needing to worry about U.S. tariffs, the Chinese took full advantage. Low Chinese wages and a cheap Chinese currency CNYUSD, -0.6037%   — at a time when the dollar DXY, +0.48%  was strong — gave China several huge advantages. Companies shuttered operations in the U.S., moved to China and eventually set up...

China Lists $50B of US Goods it Might Hit With 25 Percent…

China Lists $50B of US Goods it Might Hit With 25 Percent…

Apr 5, 2018

“China Lists $50B of US Goods it Might Hit With 25 Percent Tariff” By Joe McDonald, Associated Press Featured on Manufacturing.net China on Wednesday issued a $50 billion list of U.S. goods including soybeans and small aircraft for possible tariff hikes in an escalating and potentially damaging technology dispute with Washington. The country’s tax agency gave no date for the 25 percent increase to take effect and said that will depend on what President Donald Trump does about U.S. plans to raise duties on a similar amount of Chinese goods. Beijing’s list of 106 products included the biggest U.S. exports to China, reflecting its intense sensitivity to the dispute over American complaints that it pressures foreign companies to hand over technology. The clash reflects the tension between Trump’s promises to narrow a U.S. trade deficit with China that stood at $375.2 billion last year and the ruling Communist Party’s development ambitions. Regulators use access to China’s vast market as leverage to press foreign automakers and other companies to help create or improve industries and technology. A list the U.S. issued Tuesday of products subject to tariff hikes included aerospace, telecoms and machinery, striking at high-tech industries seen by China’s leaders as the key to its economic future. China said it would immediately challenge the U.S. move in the World Trade Organization. “It must be said, we have been forced into taking this action,” a deputy commerce minister, Wang Shouwen, said at a news conference. “Our action is restrained.” A deputy finance minister, Zhu Guangyao, appealed to Washington to “work in a constructive manner” and avoid hurting both countries. Zhu warned against expecting Beijing to back down. “Pressure from the outside will only urge and encourage the Chinese people to work even harder,” said Zhu at the news conference. Companies and economists have expressed concern improved global economic activity might sputter if other governments are prompted to raise their own import barriers. The dispute “may compel countries to pick sides,” said Weiliang Chang of Mizuho Bank in a report. “U.S. companies at this point would like to see robust communication between the US government and the Chinese government and serious negotiation on both sides, hopefully...

Why China won’t own next-generation manufacturing

Why China won’t own next-generation manufacturing

Aug 29, 2016

By Vivek Wadhwa, The Washington Post After three decades of dramatic growth, China’s manufacturing engine has largely stalled. With rising salaries, labor unrest, environmental devastation and intellectual property theft, China is no longer an attractive place for Western companies to move their manufacturing. Technology has also eliminated the labor cost advantage, so companies are looking for ways to bring their high-value manufacturing back to the United States and Europe. China is well aware that it has lost its advantage, and its leaders want to use the same technologies that have leveled the playing field to give the country a new strategic edge. In May 2015, China launched a 10-year plan, called Made in China 2025, to modernize its factories with advanced manufacturing technologies, such as robotics, 3-D printing and the Industrial Internet. And then, in July 2015, it launched another national plan, called Internet Plus, “to integrate mobile Internet, cloud computing, big data and the Internet of Things with modern manufacturing.” China has made this a national priority and is making massive investments. Just one province, Guangdong, committed to spending $150 billion to equip its factories with industrial robots and create two centers dedicated to advanced automation. But no matter how much money it spends, China simply can’t win with next-generation manufacturing. It built its dominance in manufacturing by offering massive subsidies, cheap labor and lax regulations. With technologies such as robotics and 3-D printing, it has no edge. After all, American robots work as hard as Chinese robots. And they also don’t complain or join labor unions. They all consume the same electricity and do exactly what they are told. It doesn’t make economic sense for American industry to ship raw materials and electronics components across the globe to have Chinese robots assemble them into finished goods that are then shipped back. That manufacturing could be done locally for almost the same cost. And with shipping eliminated, what once took weeks could be done in days and we could reduce pollution at the same time. Most Chinese robots are also not made in China. An analysis by Dieter Ernst of the East-West Center showed that 75 percent of all robots used in China are purchased from foreign firms (some with assembly...

U.S. Manufacturing Competitiveness Rising, Set to Take No. 1…

U.S. Manufacturing Competitiveness Rising, Set to Take No. 1…

Jul 18, 2016

“U.S. Manufacturing Competitiveness Rising, Set to Take No. 1 Spot from China by 2020” By Michelle Drew Rodriquez, Manufacturing Leader, Center for Industry Insights at Deliotte In a study I recently coauthored and conducted in collaboration with the U.S. Council on Competitiveness, executives indicated the United States is expected to be the most competitive manufacturing nation, moving China into the number two position by 2020. The study – 2016 Global Manufacturing Competitiveness Index – by Deloitte Touche Tohmatsu Limited (Deloitte Global) and the Council on Competitiveness (Council) – follows earlier studies we released in 2010 and 2013. The findings are based on an in-depth analysis of survey responses from more than 500 chief executive officers and senior leaders at manufacturing companies around the world, ranking nations in terms of current and future manufacturing competitiveness as well as the global drivers at the heart of manufacturing competitiveness. A number of interesting findings arose this year. For instance, the 2016 study finds the United States is expected to be the most competitive manufacturing nation by 2020, and consistent with prior reports, talent is identified as the number one driver of manufacturing competitiveness. To take a look at the many aspects of the study, and slice and dice the data through interactive drill-downs of rankings and drivers, be sure tovisit the GMCI Interactive Website. The following summarizes key findings related to country level competitiveness and key drivers of manufacturing competitiveness: Rankings: The United States is projected to take number one spot by end of decadeimproving its ranking from 4th in 2010 to 2nd in this year’s study, and is expected to reach No.1 by 2020. As the U.S. invests heavily in talent and technology, it ranks highest as an advanced manufacturing economy. The “Mighty Five” (MITI-V) is starting to show face as manufacturing power group. Made up of the five-Asia Pacific nations of Malaysia, India, Thailand, Indonesia and Vietnam, the MITI-V or “Mighty Five” could represent a “New China” and enter the top 15 rankings of global manufacturing competitiveness over the next five years. The study also indicates BRIC crumbles as member nations’ individual ratings shuffle. Among the BRIC countries, only China is viewed as a top manufacturing nation in 2016. The other three – Brazil, Russia and India –...

How Does America “Reshore” Skills That Have Disappeared?

How Does America “Reshore” Skills That Have Disappeared?

Apr 1, 2016

By Todd Oppenheimer, Craftsmanship.net  Now that manufacturing wages in Asia are starting to rise, some U.S. industries are bringing their businesses back to our own shores. Yet many others remain skittish about the paucity of workers here who still know how to make things. Can this downward spiral be reversed? When I talked on the phone recently with Harry Moser about all the hysterical arguments this year’s presidential candidates are having about immigration, I could almost see the mischievous twinkle in his eye. Moser is the founder of The Reshoring Initiative, a Chicago-based organization dedicated to bringing manufacturing back to America. And in his view, the solution to the immigration problem is pretty simple. During your first meetings with overseas contractors, you’re likely to be shown some impressive prototypes, manufactured by a relatively skilled production team. By the time the second and third rounds of deliveries are made, the quality of the materials has declined. “The work isn’t being done by the A team anymore,” says Harry Moser of the Reshoring Initiative. “The plant now has its C team on the job.” “If I were running for president,” he told me, “here’s what I’d tell everybody I would do on day one. I would call the president of Mexico and say, ‘Why don’t you and I target certain industries in Asia, and have the U.S. and Mexico cooperate as a team to bring those manufacturing operations back to North America.’ ” Moser explained that some of that work would be best suited to the labor force in Mexico, and some is best done in the U.S. His point is that, with a little planning, our two countries could create a whole new manufacturing infrastructure on this side of the world, and a host of new jobs. This would cut our trade deficit with Mexico, boost our neighbor’s economy, and raise its workers’ wages. That, in turn, would reduce the pressure on immigration and eliminate the need for a wall—no matter who pays for it. There’s only one small problem: Neither Mexico nor the U.S. has a workforce with the full complement of skills needed to fill those jobs. Many factory workers in China aren’t...