Outsourcing: South Carolina is someone's China

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u.s. and chinese flagsThe circle of outsourcing appears to be coming complete. Ashes to ashes dust to dust, high wages to high real estate values! Several Chinese firms are outsourcing to the U.S. to save money on...wait for it...manufacturing jobs!

Liu Keli, a Chinese businessman from the Shanxi province in China is investing 10 million dollars in South Carolina to open a plate printing factory. The factory will employ approximately 120 American workers who will be paid $12-13 per hour. Liu's reasoning for opening in South Carolina is simple, it is cheaper for his company to operate in the U.S. than it is to operate in China.

One of the areas in which Liu will save the most is in real estate here in the states. The plate making company saved 75% on the cost of land by building in South Carolina. Additionally utility prices in the U.S. are much cheaper than in China and also more reliable in South Carolina than in China. Even though labor costs are higher in the U.S. Liu is taking advantage of a tax credit from South Carolina to make up for some of the increase in labor expenses.

This whole arrangement is interesting to me because it seems to represent the way trade and global business can work out. When there aren't regulations to stop a business from opening a location anywhere on the globe, smart companies will find the areas which make the most business sense to operate in. I'm not a complete optimist when it comes to globalization but stories like these do a lot to re-enforce my opinion that the market can sort out complex issues on its own!
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