As various economic factors are raising the price of manufacturing in China, global companies are starting to source goods elsewhere. From the Times:
Freight costs have pushed some American firms into “reverse globalisation”, moving their manufacturing operations in steel, furniture, electronics and textiles back to America and Mexico.
The harsh arithmetic of shipping is only part of the explanation. But it illustrates the pitfalls for any business model dependent on going halfway around the world in search of the cheapest labour. Even sweatshops, it turns out, have their bottom line.
The energy shock hit Chinese firms hard. Oil at more than $100 a barrel not only pushed up the cost of shipping, but fed through into raw-materials costs for plastics and led to higher electricity rates.
