Business backs out of China to reshore manufacturing at home

BEIJING - More companies from Europe and the United States outsourcing production to China are returning home as price gaps narrow. Labour costs have shot up by as much as 500% in China since 2000, with average annual urban income jumping to RMB 41,799 in 2011, up from RMB 24,721 in 2007, according to the National Bureau of Statistics.

The Boston Consulting Group predicts that ongoing economic trends could virtually close the price gap for most products sold in the US. Within five years, the total cost of production for many products will be only 10-15% less in Chinese coastal cities than in some parts of the US. Only a limited number of companies have returned their manufacturing operations back home, although local academics expect the trend to keep gaining momentum.