In the United States, manufacturing wages adjusted for productivity have risen less than 30 percent since 2004, to $22.32 an hour, according to the consulting firm. And the higher wages for American workers are offset by lower natural gas prices, as well as inexpensive cotton and local tax breaks and subsidies.
Today, for every $1 required to manufacture in the United States, Boston Consulting estimates that it costs 96 cents to manufacture in China. Yarn production costs in China are now 30 percent higher than in the United States, according to the International Textile Manufacturers Federation.
“Everybody believed that China would always be cheaper,” said Harold L. Sirkin, a senior partner at Boston Consulting. “But things are changing even faster than anyone imagined.”
Rising costs in China are causing a shift of some types of manufacturing to lower-cost countries like Bangladesh, India and Vietnam. In many cases, the exodus has been led by the Chinese themselves, who have aggressively moved to set up manufacturing bases elsewhere.
In recent years, the United States has started to get more attention from that exodus. From 2000 to 2014, Chinese companies invested $46 billion on new projects and acquisitions in the United States, much of it in the last five years, according to a report published in May by the Rhodium Group, a New York research firm.
The Carolinas are now home to at least 20 Chinese manufacturers, including Keer and Sun Fiber, which set up a polyester fiber plant in Richburg, S.C., last year. And in Lancaster County, negotiations are underway with two more textile companies, from Taiwan and the Chinese mainland.