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A rare story: China outsources manufacturing to US

Posted by: on May 8, 2008 | No Comments

LA Times, via BoingBoing. A (rare) story about a Chinese businessman who has invested $10m in a South Carolina  printing-plate factory:

His main aim is to tap the large American market, but when his finance staff penciled out the costs, he was stunned to learn how they compared with those in China.

Liu spent about $500,000 for seven acres in Spartanburg — less than one-fourth what it would cost to buy the same amount of land in Dongguan, a city in southeast China where he runs three plants. U.S. electricity rates are about 75% lower, and in South Carolina, Liu doesn’t have to put up with frequent blackouts.

About the only major thing that’s more expensive in Spartanburg is labor. Liu is looking to offer $12 to $13 an hour there, versus about $2 an hour in Dongguan, not including room and board. But Liu expects to offset some of the higher labor costs with a payroll tax credit of $1,500 per employee from South Carolina.

I wouldn’t take this as a larger trend, but it does point to some of the (short-term) advantages the US still has in the manufacturing realm, particularly a reliable public infrastructure.

Chinese firms bargain hunting in U.S. – Los Angeles Times

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