Manufacturing Reshoring Explained: An Interpretative Framework of Ten Years of Research

Abstract

SUMMARY Rising costs in formerly low-cost countries and the need for jobs in developed countries has recently brought reshoring – bringing back manufacturing – to the fore. It would reverse the significant offshoring of EU production to low-cost countries, which occurred from the 1980s through to the 2000s. China was the main destination, though its mass attraction to enterprises now appears to have largely run its course and there does not appear to be any other "new China" on the horizon. "Total landed cost" is a key measure for the manufacturing-sourcing strategy. It includes labour cost, which has recently been rising rapidly in China in real terms. Transport costs are also significantly higher, making shipping from Asia disadvantageous. Other elements are the higher inventory levels needed, and issues with product quality and intellectual property rights.