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Companies Are Fleeing China for Friendlier Shores

5 28 18
02.08.2022

As globalization was gaining steam in the 1990s, Western publics learned about a new concept: offshoring. Even then, it was often unpopular with the public, even as corporate executives gleefully embraced the prospect of cheaper—and less empowered—labor. And China, with its well-trained workforce and growing middle class keen to buy Western goods, was the ideal combination of manufacturer and market. What a difference a couple of decades make. Now companies are trying to move production to friendly countries where they don’t need to worry that they’ll be caught in the geopolitical line of fire. Friendshoring has arrived.

“President Bush is on an eight-day tour of Asia. He’s visiting American jobs,” David Letterman quipped in 2005 about the 43rd president of the United States. Lots of American jobs had indeed left the country—but that was just the beginning. Between 1993 and 2011, the number of U.S. workers employed in manufacturing dropped from nearly 16 million to just over 10 million, and the decline was similar in other Western countries.

Yes, some of the jobs disappeared due to automation, but countless others went to low-wage countries. In 1982, U.S. multinationals had 30 percent of their labor forces abroad; in 2014, the share had doubled to 60 percent. None of these foreign sites was more popular than China, where rapidly improving transportation infrastructure and a workforce with high levels of basic literacy and numeracy for a developing country made it a one-stop shop for manufacturing—the factory of the world.

As globalization was gaining steam in the 1990s, Western publics learned about a new concept: offshoring. Even then, it was often unpopular with the public, even as corporate executives gleefully embraced the prospect of cheaper—and less empowered—labor. And China, with its well-trained workforce and growing middle class keen to buy Western goods, was the ideal combination of manufacturer and market. What a difference a couple of decades make. Now companies are trying to move production to friendly countries where they don’t need to worry that they’ll be caught in the geopolitical line of fire. Friendshoring has arrived.

“President Bush is on an eight-day tour of Asia. He’s visiting American jobs,” David Letterman quipped in 2005 about the 43rd president of the United States. Lots of American jobs had indeed left the country—but that was just the beginning. Between 1993 and 2011, the number of U.S. workers employed in manufacturing dropped from nearly 16 million to just over 10 million, and the decline was similar in other Western countries.

Yes, some of the jobs disappeared due to automation, but countless others went to low-wage countries. In 1982, U.S. multinationals had 30 percent of their labor forces abroad; in 2014, the share had doubled to 60 percent. None of these foreign sites was more popular than China, where rapidly improving transportation infrastructure and a workforce with high levels of basic literacy and numeracy for a developing country made it a one-stop shop for manufacturing—the factory of the........

© Foreign Policy


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