In the UK there is talk of bringing manufacturing back home, for economic reasons. 1. Although much lower than the UK, Chinese wages are increasing by 15% a year, cumulatively, so doubling every 5 years. 2. The current favourable situation is somewhat offset by import taxes and shipping costs. 3. The use of robotics in the UK means fewer workers. 4. Plus being in full control of product production offers saving in high level salaries. So the gap is closing rapidly and the same is true in the rest of Europe and the US. This will have 3 important spin-offs, the first 2 are obvious. 1. More local jobs and lower unemployment. 2. Lowering the trade imbalance. The third is less obvious, but much more important in the long term. When we out-source production, we give away a lot of trade secrets, we already know that knock-off Apple equipment is available in the far east from Apple's own manufacturers and the same is true of many other products. This can only get worse until the Chinese have every bit of information they need to go it alone and compete directly with western companies. This is exactly how Japan became so strong, they copied western technology and instead spent their money on developing production improvements and priced the inventors out of their own markets. The savings they made in merely copying a product, they put into product improvement and reliability. The same could happen in China, so maybe the changing economic situation could help stop that.
