The Growth of Chinese Power: A Need to Reshore American Manufacturing

The People’s Republic of China over the course of 40 years has developed from one of the world’s poorest countries, to one of the world’s richest. The early years of the PRC was marked with significant poverty caused by government policies like the Great Leap Forward and the Cultural Revolution. However, in the late 1970s with Deng Xiaoping’s Open Door policy, China began its rapid transformation and economic growth. China’s economic development was greatly enhanced with the establishment of Special Economic Zones and industrial clusters. These zones coupled with China’s low-cost wages, made it ideal for international companies to invest and set up low-cost manufacturing production in China driven by global market competition and communication technologies. The results of China’s transformation made China into the world’s second largest economic power in terms of gross domestic product, and the world’s largest when adjusted to purchasing power parity. China also earned the moniker as the “World’s Factory” with China now accounting for the largest share of global manufacturing output. However, as China’s population urbanizes and wages become more expensive, several international companies have looked elsewhere for low-wage manufacturing threatening China’s manufacturing sector which employs over 128 million people. With the prospect of a potential slowdown in economic growth, the Chinese Communist Party initiated the Made-In-China 2025 program modernizing and advancing China’s manufacturing base with technologies in Industry 4.0. The MIC25 initiative is accelerated with China’s state-owned enterprises which often make their decisions based on government policy. The goal of MIC25 is for China to transition from a process innovating country into a product innovating one, becoming a leader in global technologies. The investment into human capital through education and especially foreign expertise is the primary driver of China’s prospects to lead the world in technological innovations related to Industry 4.0. MIC25 also has the prospect of legitimizing the CCP trough economic growth and development. Based on historical trends related to countries dominating the globe economically, industrially, and technologically seen in past industrial revolutions, China’s attempts to dominate the world in the fourth industrial revolution poses a great threat to the United States. China’s growing economic and technological advancements, and its dominant share of global manufacturing threaten the US’ position as the world’s foremost superpower. The US in turn should take accelerated steps to reshore American manufacturing to secure and maintain the US’ economic and technological lead and rebuild the American manufacturing base.