So, China has started exporting jobs to the US.
Nanjing Automobiles, China’s oldest carmaker, is setting up a plant, global headquarters and R&D facility in Oklahoma USA, to revive one of Britain’s most revered brands, the MG.
In a mirror image of the export processing zones that first brought US factories to China in the 1980s, Nanjing’s relocation comes complete with generous state incentives, expected to include quarterly cash payments of up to 5% of the company’s payroll for 10 years under the state’s Quality Jobs Act.
Ok, it’s not quite a mirror image. According to media reports, the project will employ 510 people on an annual payroll in excess of US$30 million. At an average salary of almost US$60,000, Nanjing is certainly not hunting for cheap labor, which makes you wonder what they are doing.
If it’s about access, the company is barking up the wrong tree. With low barriers to auto-imports in the US, Nanjing would be better placed spending its money on Austrian engine makers, Italian designers and US distributors than a US production line. The consumers aren’t going to care that the cars are made in Yokesville, USA. Despite the rhetoric, American patriotism is long since gone when it comes to their cars.
There may not be much in it for Nanjing, but for Hu Jintao and his lot, the move is a PR coup. When George Dubya next rabbits on about losing jobs to China, Hu can strike back from a position of power. Not only is China now sending jobs back, it’s sending back better jobs, and bigger salaries.
But if the US gets its wish on RMB appreciation, as the “Made in America” label starts appearing on more and more Chinese products, Chinese workers may one day be complaining about losing cheap manufacturing jobs to the rising threat out East across the Pacific.