The "Manufacturing Reshoring" Strategy in the United States and its Implications to China

Hui Pan () and Di Zhu ()
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Hui Pan: Shanghai Lixin University of Accounting and Finance, China
Di Zhu: Saint Mary’s University of Minnesota, USA

Eurasian Journal of Economics and Finance, 2019, vol. 7, issue 3, 1-14

Abstract: The manufacturing reshoring is the strategic decision of the United States, based on the assessment of the development trend about the domestic and international market. Its fundamental goal is to promote the upgrading of the manufacturing industry and maintain America’s leadership during the new round of global technological revolution. In order to achieve the manufacturing reshoring goal, the U.S. government has formulated a series of policies and regulations, including technological progress policy, investment and financing policy, talent training policy, energy policy, market development policy and investment environment policy. Based on the data from the U.S. think tank, this paper systematically reviewed the latest developments in the total volume, technical composition, industrial structure, origins and whereabouts of the U.S. manufacturing reshoring, and concluded that U.S. manufacturing reshoring has a far-reaching negative impact on China’s manufacturing industry. The main findings are that China’s “industrial hollowing out”, weakened technology spillover effect of foreign direct investment (FDI), a reduction in competitiveness of Chinese manufacturing exports, and China’s heavy technology dependence on the U.S. are the results of U.S. manufacturing reshoring strategy. This paper thus proposed some countermeasures. First the Chinese government should actively lead manufacturing industry to conduct researches for technology advancement as well as industrial upgrade. Second, it should continue with the market reform, lower labor cost, improve business environment, and enhance the attractiveness of manufacturing industry. Third, with the help of “Belt and Road Initiative” strategy, it is recommended to spread the international market for China’s manufacturing and lessen its technological dependence on the U.S.

Keywords: Manufacturing Reshoring; FDI; United States; Recent Policies; Implications; China (search for similar items in EconPapers)
Date: 2019
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