2015: Escape from Shanghai. The manufacturing returns to the United States after the Chinese parenthesis

Ask an Indian what shape the Earth is and, quoting Thomas L. Friedman's best seller, he will probably tell you that the world is flat. Ask the same question to a Chinese and you might be told that it is round instead. Proof of this is the fact that, by dint of pushing their productions towards the East, American companies are seeing them reappear behind them, more or less in the exact point from which they started.
The confirmation of what could be a trend for the next few years and not the occasional rethinking of some company burned by the hidden costs of globalization comes from a recent research conducted by the Boston Consulting Group (Bcg) according to which within a few years a series of factors will contribute to the return to the United States (and Mexico) of some of the productions that had previously been moved to China. Someone like Caterpillar (digging machines) and Ncr (ATMs) have already started. However, the process seems destined to stop on the American continent. Nothing at the moment suggests a significant return of production in Europe, where labor costs are too high, the margins for productivity growth are too low and the working-age population is shrinking too rapidly, says the consultancy in summary .
The first factor destined to swing the pendulum of low-cost production towards the West is represented by the trend of wages in China. According to BCG forecasts, in 2015 the fully loaded cost of a Chinese worker, therefore including not only taxes and contributions but also everything the company spends to put him in a position to work, will be 17% of an American (4,4 .26,1 dollars per hour against 9), against 2010% in 2015. If it seems little, it is good to take into consideration the available alternatives. If BCG's predictions turn out to be correct, in 3,6 a Mexican worker will cost 14 dollars an hour, or 80% of an American and XNUMX cents less than his colleague (or at this point perhaps it is appropriate to say competitor) , Chinese. And Beijing's productivity is not growing at rates that would allow wage increases to be sterilized. It is not even necessary to imagine a scenario - not improbable, however - of rising transport costs driven by the global recovery, to see the advantages of offshoring to Mexico compared to that to China. To which others will have to be added, explains Stefano Siragusa, partner & managing director of BCG as well as co-author of the study, such as "simpler logistics, the possibility of bypassing increasingly clogged American ports, the advantages of working in the same time zone with people with a less alien culture and native language than Chinese and more familiar with English. Not to mention the greater respect for intellectual property that exists in Mexico compared to China”.
A picture to which will be added the progressive weakening of the dollar against the Yuan and some of the after-effects of the crisis on the American economy, such as the incentives for companies not to leave the country or return to it and the workers' less room for maneuver in the union negotiations. According to BCG, in the United States the beneficiaries of China's lower competitiveness will above all be a state like Mississippi (but also South Carolina and Alabama) where, thanks to lower wages than in the rest of the Union, the differential with salaries in the Chinese region of Yangtze Delta (once taking into account the lower Chinese productivity) will be small: 23,44 dollars per hour against 16,21. The return to the West of certain processes (automotive, machine tools and in general productions with an engineering and mechanical content) to the West, as mentioned, should not concern Europe. Not only for the well-known salary and flexibility reasons, but for a question of demographics. In 2050 in Italy, Germany and France the percentages of the population over 65 will be as follows: 33,3%, 32,5% and 26,9% (more than today's Japan, an "elderly" nation by definition) with inevitable impact on productivity. In the USA in 2050 the percentage should not exceed 21,6%. Even in terms of offshoring to countries less distant than China, Europe seems to be in a weaker position than the United States. According to Siragusa, in the south of the EU there is not an equivalent of a Mexico, but a series of politically less stable countries and with lower education rates that do not lend themselves as well to offshoring. If not for those companies willing to move a little of their management in addition to production. At costs that, however, are often not negligible.