I have been saing this for last 8 months.....it was comming
“All of a sudden, if your math says, ‘I’ve got to pay the guy $7.50 an hour in Shanghai or I can hire a guy for $12 a hour in Canton, Ohio,’ why would I do it in Shanghai?” said Greenblatt. “I’ve got intellectual property issues over there, there’s no rule of law, there’s a lot of corruption. Plus if I make it here, I get the stuff six weeks faster: there’s no freight. So a lot of the reasons to push jobs overseas are starting to fall apart.”
Exports are helping a lot. Greenblatt’s company just shipped to China a $20,000 order made at his Baltimore, Md., factory with steel supplied by a mill in Illinois.
Other companies are doing the same math. A report in March by the Boston Consulting Group found seven industry groups, selling about $200 billion in Chinese-made imports, that will likely shift production back to the U.S. to duck rising costs in China. That could add between $20 billion to $55 billion to U.S. gross domestic product before the end of the decade, the authors estimated.
“Asia should be very worried if the European situation continues to unravel," said Rob Subbaraman, chief Asia economist, at Nomura Group. “It can handle moderate growth in Europe or the U.S. But if we start to move toward a deep recession there’s a tipping point where Asia gets hit very hard again.”
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