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Could the United State become “the world’s factory” again?

In recent years, the manufacturing industry in the United State tends to be powerful for resurgence with a further promotion of energy revolution and maturity of technologies that could change the industry deeply like 3D print, etc. Some reports even estimated that the cost difference between China and America is no longer more than 5%. However, people has doubt that whether the manufacturing industry in the United State would challenge “Made in China” in future or not. Nie Riming, a researcher from SIFL Institute, accepted the interview from The Paper in regard to the aforesaid question.

“Ever since the financial crisis, the salary of workers in American drops year by year. However, the labor force cost in China keeps increasing. So is the salary of workers in China in a decade.”It is said by Nie Riming that RMB has kept revaluating and standards of social insurance payment and expropriation of it have been higher and higher, which reduce the relative advantage of lower labor force cost in China continuously.

Yet Nie still thinks that the position of “world factory” of China won’t be shaken for a very long time. He said that among the three factors of manufacturing industry—technology, capital and labor force, only the labor force couldn’t flow freely, but the technology and capital could flow in global wide. Therefore, the unbalance of distribution of global manufacturing industry is actually caused by unbalanced labor force. “A country like China has provided hundreds of millions of new labor force to the world in dozens of years, which is unprecedented”. On the side of a middle-short term, the labor force cost of developed countries couldn’t compete with China, while the qualification of labor force in developing countries couldn’t compete with China either. What’s more, although the flexibility of Chinese labor force market is no longer like the one in old time, it is still more flexible than most developed countries. For example, the industrial workers from China prefer to work overtime and have more sense of discipline.

“The commodity is flexible, but not the population. One day the tendency of globalization exists, resources will be allocated in global wide. It is not any country could intervene” said Mr. Nie.

Meanwhile, it is doubtful that whether the American really wants to prosper its manufacturing industry or not. It is said by Mr. Nie that on one hand, unlike service industry, the manufacturing industry does not take the leading position to bring in more job opportunities; on the other hand, the leading manufacturing industry in China gets lower value from commodity value chain. It is unworthy for America to compete with China and other countries with emerging market to take these manufacturing industries, while the America has no reality demand for manufacturing industry based on labor force intensity.

“Chinese cities are promoting their urbanization and some emerging states such as India, Southeast Asia are quickening the progress, which are huge supplies of labor force. Is the salary of industrial workers in American advantageous competed with the aforesaid states? Is it necessary to take the job like this from these states? Is it necessary for a rich man to take a $1 bread from a poor man if he is not desperate?” said Mr. Nie. The thoughts of developing manufacturing industry in the United State, German, etc., are clear—focusing on developing advantageous and with rich profit advanced manufacturing industry and high-technology industry such as manufacturing industry 4.0, internet, 3D print, etc. They don’t have actual demand for conventional manufacturing industry, while the so called hope for the reshoring of manufacturing industry was nothing but a temporary helpful measure to reduce the unemployment rate in that year.


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