We have seen the future, and it’s . . . going back to work again?

If there has been one constant in the global economy over these last few turbulent years, it’s been the roaring export sector of Communist China. Nearly every economist in the United States has seen jobs flow across the Pacific (strangely enough, the far greater damage to other East Asian exporters is not as well noted), and projected more of the same.

Well, nothing mocks “the future” quite like, well, the future (Boston Capital Group, emphasis added):

Within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world, according to a new analysis by The Boston Consulting Group (BCG).

With Chinese wages rising at about 17 percent per year and the value of the yuan continuing to increase, the gap between U.S. and Chinese wages is narrowing rapidly. Meanwhile, flexible work rules and a host of government incentives are making many states—including Mississippi, South Carolina, and Alabama—increasingly competitive as low-cost bases for supplying the U.S. market.

Oops.

Now, please note “the value of the yuan continuing to increase”. The ChiComs are actually letting their currency rise in value by buying fewer U.S. Treasury notes than they have in the past. If they decide they’d rather not lose jobs to the Old South, they’ll have to crank up the bond buying again – which would end up pushing back against the long expected lender strike against American debt and actually give us some breathing room on our budgets. It could also spark hyperinflation on the mainland, though.

I must confess: I thought India would be the most likely candidate for an economy outbidding ChiCom-land. This may be yet another example of Bismark’s truism on God and the United States.

Cross-posted to Bearing Drift