
The U.S. Will Surpass China as the No. 1 Country for Manufacturing by 2020 - jayjay71
http://fortune.com/2016/03/31/united-states-manufacturing-china/
======
throwaway2016a
I haven't been myself but my wife is a process engineer and had to go to China
to install and train people on a new machine so this is only second hand...

But one of the reasons China is so good at manufacturing is because everything
is in one place (or at least clusters)... need 10,000 of an Integrated
Circuit? The company that makes it is literally down the street. Need some raw
materials? That's down the other street.

I can't think of a place in the US that is like that. If we need parts we have
to wait for them to ship. (often from China)

It's not just a labor problem. It is my understanding to be competitive in
manufacturing you need to be vertically integrated. And I think that is harder
to do in the US.

Although I hope it is true. I live in the US but I don't believe in inherit
United States exceptionalism but I do feel like shipping goods by container
ship is bad for the environment and bad for consumers. I'd much rather see
things made locally.

~~~
hacknat
> Although I hope it is true.

I don't know if being a manufacturing powerhouse is actually all that exciting
anymore. There aren't really that many jobs in manufacturing anymore. Some of
Toyota's modern car plants employ a meager 1500 people which is about and
order of magnitude decrease from what car plants used to employ.

This las election was frustrating for this very reason everybody assumes
getting manufacturing back is going to be great. It's not. Sorry, it just
won't be.

Manufacturing is moving back to the US because distributed supply chains are
becoming worth the cost increase in labor.

~~~
coliveira
Producing our own food is not exciting either, but would you like to live in a
place that produces no food and has to import 100% of what is needed to
survive? This is the same thing here. Manufacturing is not a sexy activity
anymore, but it is necessary, as long as we still live in a physical (non-
virtual) world.

~~~
fennecfoxen
> a place that produces no food and has to import 100% of what is needed to
> survive

like, say, New York City? Sure!

 _No, the rooftop garden on the Park Slope Whole Foods does not count._

~~~
malka
Ny is not in a position where the people whom feed it could use it as a
leverage in diplomatic relationships

~~~
throwanem
'Who feed it', not 'whom'. The latter is the objective case of the pronoun,
parallel to e.g. "them"; just as we wouldn't say "them feed it", we wouldn't
say "whom feed it", either.

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jayjay71
A link to the full study pdf (1) and a link to a more interactive version of
the data (2)

(1)
[https://www2.deloitte.com/content/dam/Deloitte/us/Documents/...](https://www2.deloitte.com/content/dam/Deloitte/us/Documents/manufacturing/us-
gmci.pdf)

(2)
[https://www2.deloitte.com/global/en/pages/manufacturing/arti...](https://www2.deloitte.com/global/en/pages/manufacturing/articles/global-
manufacturing-competitiveness-index.html)

~~~
throwaway2016a
Thank you for those links. One thing that jumps out from the links is it looks
like the US has an absurdly high corporate tax rate but if you click through
you see it is only high because there are few data points and China and India
bring down the average.

Very interesting.

------
smaddali
While manufacturing may comeback to US, the employment in Manufacturing sector
may not increase as much due to automation.

~~~
maxxxxx
We really need economic indicators that reflect conditions for most people,
not just the top few. Indicators that are often used in the news like rising
GDP, house prices and manufacturing output are pretty useless if only a few
get benefits from them.

~~~
maxerickson
We should also start treating rising housing prices as a policy failure.

~~~
wil421
What about inflation? Why would anyone buy land if it was guaranteed to
depreciate.

I'd be better off renting from someone else losing money.

~~~
maxerickson
Lots of people buy vehicles that depreciate like mad because they believe the
total value of the purchase exceeds the total cost.

I'm not necessarily saying that prices should have significant downward
trajectory. Of course desirable locations will command a premium over time and
so on. But as a society we probably shouldn't be excited that housing
sometimes goes up substantially, even as the stock deteriorates.

~~~
ams6110
Vehicles are a consumable, not an investment. Land is generally not, because
most uses increase its value.

~~~
maxerickson
Yes, but I'm talking about housing rather than land.

Most housing suffers from use and age.

(Note where I conceded the point about some land having value due to location
or such)

------
z2
Couldn't one country's CEO be unreasonably bullish or bearish on their
country's capabilities relative to others? Do they really know how far along
foreign manufacturing schemes are evolving? Nobody is sitting on their hands
here; "Made in China 2025" and Germany's "Industrie 4.0" are pretty strong
desires to push into advanced production using IoT, smarter automation, and
all that jazz. Anecdotally, in a factory visit near Shenzhen, the manager
claimed that moving to an automated production line has been pretty easy. Some
areas are kept manual only because the worker is cheaper, for now.

Outcomes from competition are hard to predict. It's interesting that Deloitte
predicts Germany "holds strong and steady at the number three position" in
2020 when their own survey has them jumping between 2nd and 8th within a
couple of years.

------
bandrami
I'm pretty sure our manufacturing output exceeded China's for most of the
oughts, also. The myth that "we don't make things here anymore" is, well, a
myth. We just don't employ people to make things anymore.

~~~
losteric
It's a well founded myth based on an extremely high percentage of consumer
goods produced overseas.

I can't find hard data on this, but anecdotally it's very hard to find things
made in the US unless it's a high end store. Chinese manufacturing filled the
burst in consumer demand for budget-level products...

~~~
bandrami
True, but that's a relatively small part of the economy to begin with. We make
most of the heavy plant in the world, so we're essentially building the
factories China uses to make the plastic crap we buy.

~~~
mistermann
How might one know the truth about this, what could I read?

------
rahimnathwani
I read the article and skimmed the full study and was left scratching my head:

\- What exactly do they mean by 'Competitiveness'?

\- Why so much focus on labour costs, when manufacturing cost is increasingly
driven by large capital investments (especially in China, where low interest
rates and government encouragement have expanded capital investments for
years)

\- Why all the talk about R&D expenditure. Is that really a driver of
manufacturing competitiveness (whatever that means) or manufacturing output?

\- How do they expect (on page 46) China's consumption to rise to 46% of GDP
by 2025, if GDP will rise at 6.5% per year during the period? Such a shift
would require consumption to go up by ~10% per year.

~~~
ThomPete
The focus on labour cost is, I believe, because China have been suppressing
it's own currency to stay competitive. But it's just a guess as I am only
reading through the article and the study as we speak.

~~~
netheril96
> because China have been suppressing it's own currency to stay competitive.

Had been.

China's currency is facing pressure to depreciate nowadays, and the Chinese
government is having a hard choice between propping the value of CNY and
preserving its reserves of dollars.

------
ageofwant
Jobs that are vulnerable to automation are generally not worth keeping. That's
no comfort to those loosing them though.

Science fiction from the 60's painted a world where people would lounge around
in their airships hopping between beaches, and mountains and parties while
robots took care of everything and the lord scientists and engineers that
gifted the wold with such plenty smiled benevolently down on the citizens of
the Age of Plenty. Yea that did not happen, nobody thought about who would own
those automatons, and lo, it was not us.

~~~
bandrami
Did it not happen? Even poor people today have objectively much better living
standards than rich people 100 years ago.

~~~
reallydontask
Please explain what you mean by: poor people today, rich people 100 years ago,
living standards.

hard to argue with your statement, one way or another, if those aren't clearly
defined.

~~~
bandrami
Since I'm not interested in arguing about it I'm not particularly motivated to
define it clearly. But good examples are life expectancy, physical pain
relief, availability of the entire sum of human knowledge through a small
glass and metal rectangle that fits in your pocket, likelihood of living in a
democratic country, likelihood of avoiding a violent death, etc.

~~~
kesselvon
But housing and education prices continue to outpace wage growth, with medical
care becoming increasingly expensive. Things are objectively better, but the
non-wealthy see their societies stagnate and wealth being extracted and
concentrated far away from their communities.

~~~
jfoutz
Education at least, the best chemist, economist, physicist or whatever fresh
out of school probably wouldn't do to well against even a poor graduate today.

Relativity, quantum mechanics, crystal growth, there is just so much they
didn't know. In any field, really.

------
didibus
We could just all stop buying made in China. Seriously, all these things are
laws of economics. You can't bypass them, as they are natural laws. Economics
is the study of human motivation. Motivation is what dictates what we do and
don't, it rules our actions.

If you wanted to have an impact, be conscious about your actions, pay that
extra cost and buy local if you care so much, and don't buy at all if there's
no local options.

------
herbst
I live in europe. I'd assume 80% of the things i own are mostly made in china.
Maybe 19% are made within the EU and 1% everywhere else. I cant recall a
single product i own that was producted or even manufactured in the U.S.
therfore i have a hard time believing that title.

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jaekwon
We're not even using the right metric system, so our export abilities are
crippled, right? I remember trying to find parts for my 3d printer in the US.

~~~
analog31
Try McMaster-Carr. Virtually everything is available in US and metric units.
There is less variety of things like metric fasteners, because designs have
improved to use fewer weird parts.

Since almost everything is designed in CAD and manufactured by CNC these days,
the real distinction between US and metric units has practically vanished. A
dimension is a floating point number.

------
norswap
But is it good news?

------
LargeCompanies
Making America Great Again...

~~~
threeseed
No Trump will cement the US's inevitable trend towards mediocrity.

Manufacturing are not the jobs of the future. They are too easy to automate
and will far too easily flow to cheaper countries with lots of young, skilled
people e.g. China, India.

What should be happening is a massive skills and education investment in the
US combined with some sort of basic income.

------
throwaway2017ab
What a joke ! Why is this even on hackernews ? Does anyone even know the
economics of manufacturing and why China is on top of this ?

------
johncole
Worst graphic ever.

------
cynosurelabs
I totally agree with that!

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squozzer
Upon what data and assumptions is this prediction based? How will this help
Joe Six-pack?

~~~
paulyg
It won't help Joe Six-pack. And your questions make me think you did not read
the article. The manufacturing output will increase due to automation & other
improved techniques.

My fave quote from the article:

> So while it's understandable the state of manufacturing is of concern to
> presidential candidates, those who say they can bring back lost jobs in the
> sector either don't know what they are talking about, or are being
> disingenuous.

~~~
pm90
> So while it's understandable the state of manufacturing is of concern to
> presidential candidates, those who say they can bring back lost jobs in the
> sector either don't know what they are talking about, or are being
> disingenuous.

Or both, in case of the current president-elect.

~~~
mistermann
How can you be disingenuous if you don't know what you're talking about?

~~~
aaronblohowiak
I think the sky is red but I tell you today it is teal -- I am lying about
something I misunderstand

~~~
mistermann
Does "lying" not imply one knows the truth?

~~~
jasonlotito
No. It implies one is attempting to pass of a false statement as true. If you
know your statement is false, you are lying. Just because you don't know the
truth doesn't mean you can't lie.

------
yc-kraln
Who cares? China has more middle-class citizens than the US has citizens.
Manufacturing does not move the needle on people's quality of life.

------
KON_Air
Anglo-Saxons think they can retreat to their shell and prosper again. Great
news. Because it never ends badly.

~~~
edblarney
Since when did Anglo-Saxons ever live in a shell?

Since when (post-Renaissance) did Anglo-Saxons not prosper?

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newswriter99
This was posted back in March, right?

Is it a "year-end round-up" of stories or something?

Because if so, this story is kind of dry. Aside from the tiny hyperlink to the
Deloitte study, there's NO data in this at all.

What's the deal?

