Gunboat Production returning to USA from China

It's happening in more and more industries every day.

A lot of it has to do with the fact that China is not as competitive as they once were. Interestingly, they are beginning to outsource a lot of manufacturing to third world countries.

Which industries exactly?

Toys, apparel, business accessories, writing instruments, technology, and many more that I deal with on a daily basis. In many cases, one doesn't even know that the Chinese have outsourced the manufacturing.

Labor rates in China are skyrocketing and they are finding it cheaper to play middle man (much like the Americans), add a mark up and act as intermediary.

Don't remember off hand, sorry. But there was a guy on TV 2 or 3 weeks ago saying that he's bringing several jobs back to Alabama, and someone else I read about last week. They were citing basically what Capt. J was saying plus that the the Chinese aren't giving it away anymore. Then you have the recalls and PR like Apple's dealing with right now about labor practices. That's expensive. It's just getting cheaper to bring the jobs back.

"Re-shoring" ... interesting!

Coincidentally I came across below comment in an email I received yesterday.

(Author Walter Molano of BCP Securities)

" ...At the same time, the U.S. is undergoing an industrial renaissance that has not been seen for half a century. The decline in real wages, huge increases in productivity, a well-capitalized corporate sector and an energy revolution is making the U.S. the hottest destination on the planet for manufacturers and investors. "Re-shoring" is the new buzz word in manufacturing. ..."

I would definitely love to see the industrial renaissance mentioned. May good times come our way !!!

Many people here are spot-on, I just deal with this exact matter almost daily: China's mostly not as cheap as it used to be anymore.

Those old enough might recall similar Japanese trajectory - they started off as cheap, too. Or more recently South Korea (remember when Samsung electronics was the cheapest, eh?)

Thankfully there's still thai/malaysia/etc.

But as those countries are smaller and less developed in terms of industrial environment, it often makes just as much sense to simply go local.
(As long as local taxes make any sense at all, at least. Here in Russia the total effective salary tax - "smartly" hidden in several layers - is over 45%)

Chinese are smart enough guys from the way they are handling economy, but you can't cheat basics. Last decade their country's model was "$100 salary guys make stuff, we export it and sell to $3000 salary guys". Now they are trying to "develop internal market", which makes sense, but it's hard to have both a mass of $100 salary guys and a mass of $3000 salary guys in one same country

P.S. And then there is obviously a price on "Local specifics". The same people who would deal happily in China for 300% raw cost difference wouldn't bother for 30%. Quite rightfully, because 30% is about what all the measures to counter said "specifics" end up costing. Maybe 20%, but for the remaining 10% most prefer their nerves (bear in mind, what is 10% difference in raw M&L cost would end up, like, 3% in final price).

I certainly seen them trying, but are there really any idi... businessmen falling for it? Not a rocket science to travel to malaysia yourself, without chinese "brand middlemen"

Good to see Gunboat building on the east coast. A lot of skilled people there.

Just an observation on building anything that's labour and skill intensive anywhere. If you just go somewhere for inexpensive labour without looking at spending the money to train those people properly and take in to account the added cost of knowledgeable trustworthy supervision, there will be problems.

Brian: Thank you for the link to the Tang project. Interesting read.