In the WSJ, China, the Future of Manufacturing, Energy Costs

By August 3, 2009Economy, Energy

An article by Timothy Aeppel in today’s Wall Street Journal,China’s Gains in Manufacturing Stir Friction Across the Pacific,” a big-picture story about the relative importance globally of the U.S. and Chinese manufacturing sectors. The NAM’s perspective.

John Engler, president of the National Association of Manufacturers, says he doesn’t expect China to surpass the U.S. before 2020. “It may or may not continue to grow so rapidly,” he says. “The importance of the China challenge to the U.S. depends on how we respond to it,” such as implementing tax and investment policies that encourage domestic producers to expand.

And energy. Aeppel concludes his piece with a report from a manufacturer who cites a very important development as Congress discusses raising the price of energy through a cap-and-trade scheme:

[The] concern remains that U.S. manufacturers now being hit by the economic downturn will never recover. J.B. Brown, president of Bremen Castings Inc., a family-owned foundry in Bremen, Ind., says the downturn has halted what had been a hopeful trend that emerged last year of work returning to the U.S. from China.

“I see a lot of people starting to look at going overseas again,” he says, in part because costs are rising in the U.S. even in the depth of this recession. He notes, for instance, that Bremen’s electricity rates jumped 17% this year — and the company has been warned they could increase even more next year. Foundries like Bremen use large amounts of electricity to heat metal.

 

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