U.S. Reshoring vs. China’s “Made in China 2025” Initiative – Better Start Looking Over Your Shoulder

One of the keys to Reshoring manufacturing is automation. In fact, automation is so important to labor cost reduction that without it, it is very difficult to make a case for bringing manufacturing back to America. Automation of American manufacturing, especially the use of robotics, 3D printing and 5-axis milling, is what we refer to as “advanced manufacturing.”

In America, we are making great strides in advanced manufacturing which result in lower labor costs and higher productivity. We are winning the race right now…BUT… China is not sitting idly by and watching us pull ahead. After all, nearly 80% of China's economy is tied to manufacturing, so to maintain its competitive position, China must keep up with manufacturing productivity improvements.

In May, China unveiled “Made in China 2025” campaign, a 10-year national plan to enhance China's competitiveness in the manufacturing sector through automation and overall improvement in technology. The blueprint of the “Made in China 2025” plan was approved by China's Central Cabinet, headed by Premier Li Keqiang. And from past experience, we know what happens when the Chinese government decides to do something…it gets done!

The popularity of Reshoring (a recent study by Boston Consulting indicates that 54% of American companies over $1 billion in revenues are Reshoring now or planning to) is supported by our federal Revitalize American Manufacturing Act of 2014. This Act creates a network of American manufacturing innovation centers, where advanced techniques and technologies are created

Meanwhile, China's 2025 plan will focus on improving manufacturing innovation, integrating technology and industry, strengthening the industrial base, fostering Chinese brands, enforcing green manufacturing and promoting breakthroughs in 10 key sectors. The vision: “China will basically realize industrialization nearly equal to the manufacturing abilities of Germany and Japan.”

The Ministry of Industry and Telecommunication Technology (MIIT), which led the creation of the “Made in China 2025” plan, said the strategy is intended to give China an edge in innovation, green development and quality goods.

Just when we thought America was pulling ahead again in manufacturing, the Chinese reignited the race. We'd better start looking over our shoulder again.

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