This is very complicated because we (and the world) allowed it to get to this point. Yes, China is the problem and, at the same time, it isn't.

China is automating (and can automate further) just as much as we can.

I have manufactured in China. And the work I did was not done in sweat shops full of people doing mindless work. No, we are talking about reasonably skilled workers running very nice high-tech CNC machines to produced machined metal parts, injection molded plastics as well as electronic assemblies. In some cases the end product cost just as much as it could cost in the US if we could do the same job. Of course, in other cases it cost significantly less. In all cases quality was beyond good.

They can do the same things we do and adopt the same manufacturing technologies we adopt. The world is pretty flat in that respect.

What's the difference then?

Well, labor cost is one piece of the puzzle. And, depending on discipline, not necessarily the largest element in the equation.

The problem is multi-faceted: taxes, regulations, environmental restrictions, OSHA, unions, pensions, lawsuits, etc.

And the other factor is that they have a government and business leaders who's sole focus in in winning. They want to win this in the world stage. And they are executing a strategy as flawlessly as they possibly can. In the mean time we are making and continue to make all the wrong decisions. It's like watching a bad chess game: One bad move after the other.

Take industries such as the light aircraft industry. It has been all but killed-off by lawsuits, regulations and other issues. You'd be crazy trying to spin-up a light aircraft operation in the US, even if you have great ideas.

When I was manufacturing there were components (lots of them) that you simply could not buy in the US (meaning, US-made) at any price. We just don't make the stuff any more. This spans from chips to even certain types of glass. We have managed to kill-off whole layers of the supply chain.

And that's the other factor: The supply chain. China has been outstanding at developing manufacturing regions where the entire supply chain exists within a concentrated geographic area. This, from a product development and manufacturing standpoint is the equivalent of the software "killer app". We can't compete because our supply chain is horribly fragmented in so many places that it saps competitiveness out of the system.

When statistics get thrown around about the manufacturing sector growing you have to dig deeper and be very, very critical of the data. Are manufacturers growing in terms of dollar amounts while, at the same time, being forced to outsource more of their supply chain and subassemblies to places like China? I don't know. I'm not in that game any more and I am glad. But I can tell you with absolute certainty that, at a certain point in the life of my manufacturing business it became exceedingly obvious that the ONLY way to compete was to start to insert more and more Chinese-made components and subassemblies into our products. No choice. We are far too far down the slippery slope.

This is something that happened over many decades. As such it will take decades to fix --if that's even possible. Sorry to be too negative but I've been in the trenches and have had skin in the game for far too long. I am not a casual observer but rather someone who invested very sizable amounts of my own money to be in the game and have the scars to prove it.

Let's not forget that Steve Jobs told Obama that a lot of high-tech jobs are never coming back.
http://open.salon.com/blog/steve_klingaman/2012/01/25/lets_n...

And, he was absolutely on the money on that one. I suspect that if you could ask for clarification he would bring up such things are taxes, laws, lawsuits, unions, regulation, environmental laws, supply chain structure and other factors.

It would require a very solid and decisive cultural, financial and political shift to bump us over into a different path that could lead to a serious and solid recovery at all levels.

And that's the problem. While we are preoccupied with bullshit here in the US some around the world are making the right decisions on a daily basis. They are investing in a future that we will not be ready to face without massive challenges. That's the truth.

We can choose to look the other way and pretend this can be fixed by raising taxes on a few people who make a little more money, gain votes and move on, or we can take this shit seriously and transform our country into a business powerhouse at all levels.

I vote for option #2.