Reshoring of US manufacturing bound to fail

Editor’s note: American Factory, the Oscar-winning documentary, has laid bare the conflict between Chinese manufacturers and American labor unions at a time when the US is ramping up its reshoring initiative. Two experts share their views on the conflict and the prospect of the US reshoring with China Daily’s Liu Jianna. Excerpts follow:

Strike a balance between fairness and efficiency

As an intermediary agent between employers and employees, US labor unions provides disadvantaged laborers with more representation and safeguards their interests. It helps mitigate unfair distribution of income and social resources and acts as a social safety valve and buffer zone for conflict.

China, as the manufacturing center of the world thanks to its relatively low labor and logistics costs, rapidly upgrading technologies and complete infrastructure and industrial chain, has strong appeal for enterprises.

And despite the US administration’s repeated appeal for manufacturers to return, companies like Tesla and Ford inevitably put profits and development first, instead of the government’s will and national strategy. It is indeed difficult for the US to reshore its manufacturing industry, especially as its tax reform’s marginal effects weaken.

The trade war with the US and the latter’s protectionist provisions have not and will not fundamentally change China’s position as the global manufacturing center. However, the COVID-19 outbreak is sure to undermine confidence and the US will obviously take this opportunity to promote its reshoring initiative. If the epidemic lasts for too long, more than half a year for instance, the relocation of manufacturing outside of China will certainly be intensified.

Even though American Factory has garnered approval from both countries, the reality shows the US is becoming more and more unfriendly toward Chinese investment. The restriction on Chinese capital in non-sensitive sectors like real estate has even aggravated, showing increased wariness of Chinese investment from the US.

Zhang Monan, lead researcher at the Department of American and European Studies at the China Center for International Economic Exchanges

Reshoring US manufacturing is dead end

It is impossible for the US to reshore its manufacturing industry, which has hollowed out since the 1970s partly thanks to the dollar hegemony. Even though certain enterprises in China have left as a result of the upgrading of China’s industrial chain — the most complete and independent in the world — they have not relocated to the US, but instead countries like Myanmar and Vietnam.

Once workers with lower education levels in industries like these are laid off, they could find it hard to get reemployed. This can be attributed to the US education system, which is largely focused on privatization.

As US traditional manufacturing declines, the labor union’s strength is also declining. But it still fights in the name of freedom, human rights and democracy, the principles the US is founded on.

Just as it remains unable to pass gun control after decades of legal battles, there is no chance for the US to reshore its manufacturing industry.

Wang Yiwei, professor of international relations at Renmin University of China