![\"\"](\"https:\/\/sitesdev.net\/articles\/wp-content\/uploads\/2014\/04\/cardboard-316414_640.jpg\")
In order to understand why \u201cre-shoring\u201d makes sense, you\u2019ve first got to understand why off-shoring made sense. Off-shoring (along with \u201cdownsizing\u201d and \u201crightsizing\u201d- probably two of the most despised terms in business) began in earnest in the 1980\u2032s, due to reforms made by the Chinese government, beginning in 1978. Those reforms took time to take root, but once they did, it changed the game in big ways.<\/p>\n
The Rise of China<\/strong><\/p>\n By selectively embracing Capitalism, China sought to replace the USA as the \u201cWorkshop of the World\u201d in much the same way that the United States once took that title from England (at the start of the Industrial Revolution, England had more machines per capita than anyplace else on the planet, and it was this fact that led to their early industrial dominance).<\/p>\n China simply took a page from the history books and made use of their two biggest advantages; lots of people, and an artificially undervalued currency. The first advantage meant that China had the people power to invade nearly any market it wanted. They could throw enough bodies into the fight that they could dominate nearly any field they entered. While the United States was busy investing in high tech robotic assembly lines, China did it old school, with vast factories that could churn out an astonishing array of goods and services for pennies on the dollar. The second advantage (the government intentionally keeping the value of Chinese currency low as compared to the rest of the world), meant that for decades, China enjoyed an impressive 8:1 currency advantage over the United States.<\/p>\n It doesn\u2019t matter how good you are, you\u2019re going to be hard pressed to overcome an 8:1 advantage, and that\u2019s why companies started leaving.<\/p>\n Cheap Oil<\/strong><\/p>\n The other factor that sealed the doom of American manufacturing was the abundance of cheap oil. That drove down shipping costs, which led to a huge increase in cargo traffic from the far east. Remember that this began in the 1980\u2032s, so we were just coming down off the historically high prices of the 70\u2032s oil shocks, and for the next two decades, oil prices would remain remarkably low.<\/p>\n The one-two punch of incredibly (and artificially) cheap labor in China, and to a lesser extent, India and Mexico, combined with cheap oil which translated into cheap shipping just made it impossible for American manufacturing to compete.<\/p>\n