By Steve Toloken, Plastics News Staff
Guangzhou, China -- As major multinational firms increasingly move work out of China to get away from that country's rapidly rising costs, some voices are predicting a mini-renaissance for manufacturers in mature markets like the United States.
While there are signs US manufacturing is benefiting, executives from some multinationals and the plastics supply chain suggest a more nuanced picture is emerging of which places, if any, could become the next go-to manufacturing hot spots.
One bottom line is that labour-intensive industries are leaving China as factory wages rise 15 percent a year and its currency strengthens. At the same time, firms making higher-technology goods like computer servers feel much less pressure and see many advantages to China.
An April study from Boston Consulting Group in the US found that China's rising costs could, by the end of the decade, bring back 10-30 percent of the goods that the US now imports from China in seven categories, including plastics and rubber products.
The study predicts that the trend toward reshoring - plus the increased competitiveness of US manufacturing in general compared with other major developed economies - will together be responsible for creating 2 million to 3 million jobs in manufacturing and support industries in the United States.
That's less than the 6 million jobs lost in manufacturing between 2001 and 2009, when exports from China tripled, but some see China's rising costs as a good chance for US firms.
"It's a huge opportunity to recoup our manufacturing prowess, if we do it right," said Jon Huntsman Jr., former U.S. ambassador to China and presidential candidate, in an April keynote speech at the NPE2012 plastics trade show in Orlando, Fla.
He also sits on the board of his family's chemical and plastics company, Huntsman Corp., and on the board of Ford Motor Co.
"Everyone talks about finding the next China. We can safely say there really is no next China," Bill Foudy, the Hong Kong-based head of strategy and brand sourcing, global operations, for Adidas Sourcing Ltd said, "in terms of all that's offered: a large workforce, relatively efficient factories in terms of large output … cost competitiveness, supply chain, material supply, infrastructure and government support."
The full version of this article appears on our sister publication, Plastics News