“Right now, China is the world’s factory, not because of low labor, but because they have the raw material...”
Wrong.
Raw materials is a major weakness and competitive disadvantage of manufacturing in China. They are exceptionally dependent on imports of raw materials, including oil - their energy costs are also relatively high because of that.
“India, Vietnam, etc...just cannot compete.” They obviously can, and are. India has more people, lower wages, faster demographic and economic growth, and a higher skill level. They are the second largest producer of Ph.D.s in the world after the USA, and have a much higher level of English language capability and cultural understanding of the US society and market.
Apple supplier Foxconn is shifting their main production from communist China to India, and Netgear announced this week that they are following.
Last one out, turn out the lights.
There is a saying now current in China. This may be the worst year in a decade, but it will be the best year of the next decade.
Japan’s “lost decade” after its bubble burst, stretched into two decades. By financial measures of debt and currency mis-valuation, China is significantly further out of balance than Japan was. We can manage an orderly withdrawal of the supply chain from China over several years, but a major debt and/or currency crisis there will likely be a big hit to the global economy. Another reason for businesses to get out while they can.
Thank you for a well written, informative post. I learned some stuff. ;)