Foreign Policy.
A furor broke out last week after it was reported that the uniforms of U.S. Olympians would be
manufactured in China. "They should take all the uniforms, put them in a big
pile, and burn them," said an apoplectic Sen. Harry Reid. The story tapped into the anger -- and fear -- that
Americans feel about the
loss of manufacturing to China.
Seduced by government subsidies, cheap labor, lax regulations, and a rigged
currency, U.S. industry has rushed to China in recent decades, with millions of
American jobs lost. It is these fears, rather than the Olympic uniforms
themselves, that triggered last week's congressional
uproar.
But Ralph Lauren berets aside, the larger trends show that the
tide has turned, and it is China's turn to worry. Many CEOs, including Dow
Chemicals' Andrew
Liveris, have declared their intentions to bring manufacturing back to the United
States. What is going to accelerate the trend isn't, as people believe, the
rising cost of Chinese labor or a rising yuan. The real threat to China comes
from technology. Technical advances will soon lead to the same hollowing out of
China's manufacturing industry that they have to U.S industry over the past two
decades.
Several technologies advancing and converging will cause
this.
Link.
