China has decided to take advantage of cheap USA labor and build its ThinkPads in USA. Wait. That can't be right. Let me try again. Since assembly is mechanized intensive, and labor is not a factor in international trade, Lenovo's Chinese management has realized that since management costs are now similar, ThinkPads can now be made in USA.
Apple is following suit, and they will be making some models in USA. Now we may find in time it is tax give-aways that is causing this reshoring, but I doubt that. Apple wouldn't play that game. What is motivating this is after 25 years of development, Chinese management is no less expensive than USA management in this narrow category.
Although some Chinese labor is nominally lower paid than USA labor, in this category the difference is negligible.
Labor rates have never been a factor in international trade. The reason you believe labor rates to matter is that you have not studied it, you just believed what you were told. You were told labor rate were too high in USA so the labor movement in USA could more easily be crushed.
With more management than opportunity, the cost of management is dropping fast in USA. This is very good news, because we cannot have a recovery without falling costs. And a healthy economy always experiences gradually falling prices.
So reshoring here looks good.
Feel free to forward this by email to three of your friends.
Apple is following suit, and they will be making some models in USA. Now we may find in time it is tax give-aways that is causing this reshoring, but I doubt that. Apple wouldn't play that game. What is motivating this is after 25 years of development, Chinese management is no less expensive than USA management in this narrow category.
Although some Chinese labor is nominally lower paid than USA labor, in this category the difference is negligible.
Labor rates have never been a factor in international trade. The reason you believe labor rates to matter is that you have not studied it, you just believed what you were told. You were told labor rate were too high in USA so the labor movement in USA could more easily be crushed.
With more management than opportunity, the cost of management is dropping fast in USA. This is very good news, because we cannot have a recovery without falling costs. And a healthy economy always experiences gradually falling prices.
So reshoring here looks good.
Feel free to forward this by email to three of your friends.
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