US Manufacturing Reflux &Nbsp; Chinese Enterprises Face Threats

The first quarter report of the US Department of Commerce shows that US manufacturing industry has seen a decline in foreign investment and an upward trend in tax profits. The US "re industrialization" strategy is in force, and the US real economy is showing signs of revitalization.

The global capital manufacturing industry in the United States is said to have a clear trend in recent years. American reflux Boeing, for example, began to cut other jobs and recruit people in the US. So did Ge. Even Master Lock, a manufacturing company, gradually reduced its production capacity in China and moved jobs back to the United States.

The first quarter report of the US Department of Commerce shows that US manufacturing industry has seen a decline in foreign investment and an upward trend in tax profits. The US "re industrialization" strategy is in force, and the US real economy is showing signs of revitalization. Although there is no clear mention of the trend of manufacturing backflow in the report, it implies that the comparative advantage of the United States is picking up. Recently, a factory in Georgia has exported chopsticks to China, which has stimulated people's understanding of this topic: whether it is high-end or low-end, China will encounter the challenge of the competitiveness of the manufacturing industry in the United States?

However, some scholars do not pay attention to it. The main reasons are two points. One is the labor force of China and the United States. Cost gap Very large, according to exchange rate conversion, the cost of labor in the United States is about 6 times that of China. This is a huge "gap". It is not easy for the manufacturing industry to return to the United States to "jump" this gap. Another point is that China's market is very broad and its consumption capacity is growing at a high speed. It is the most efficient way to make the production base as close to the market as possible.

We believe that the trend of US manufacturing decline is unmistakable. Although its reflux intensity has not yet reached a level worthy of attention, I believe this trend will continue to strengthen. First of all, many people see a 6 fold difference in labor wages, but they do not consider that if the actual cost of labor in China rises at an average annual rate of about 15%, which is a reference to the growth rate of minimum wage and belongs to China's income doubling plan, this is a very high speed.

Secondly, China's inflation has risen by more than 6%, while the United States is about 3.5%. inflation The cost gap formed by US multinationals must also be considered. If inflation remains at 2.5%, assuming that the price of labor in China is 15% higher than that of Americans, then the "cheap" cost of China will disappear completely before 2020. If the transport cost of high trans continents is included, the power of reflux will be more sufficient. The manufacturing industry in the United States is mainly exported to the United States. The high transport cost brought by high oil prices is a considerable expense.

These are all "visible" explanations, and there is a "capital labor" transformation problem which few people have considered. This is a hidden explanation. Taking Master Lock as an example, its production line in China is not the fastest production line. Because China's labor force is very cheap, it can combine the low capital density and low technology level with China's cheap labor force to achieve the best economic arrangement, which is equivalent to the combination of capital and labor in the Harold Doma model: low capital and high labor volume. Now China's inflation is serious and labor prices are soaring, and the arrangement of higher labor volume will be challenged. Master Lock chose to return to the United States, because the production line of the MILWAUKEE production base in the US is the most advanced, and its efficiency may be more than 10 times higher than that of China. This is enough to make up for the gap of 6 times the labor force price of the US labor force, which is 6 times higher than that of China. According to the Harold do MA model, more capital is used to make up the labor volume, thus forming a new economic reasonable arrangement under the promotion of technical efficiency. In fact, this is very frightening. This means that the United States has adjusted the global layout of US manufacturing jobs with the efficiency of new technologies and production lines, which may have little impact on the position of the US in Europe. After all, the level of capital and technology input in Europe is not far from that of the mainland, but this is very destructive to a country like China, because the US manufacturing investment in China is based on the combination of "low capital and low technology plus labor volume". This combination is very fragile in the current situation, and it is also prone to major changes.