Digital Manufacturing Has A China Dilemma

Digital manufacturing has a China dilemma. Is price pressure from China encouraging reluctant managers to take the big step toward digitization? Or are companies worried that they won’t be able to compete even if they invest in new technologies?

On March 14, 2019 the Bureau of Labor Statistics reported that the price of imports from China had dropped by 0.7% compared to a year earlier. The previous day, the BLS had reported that the price of private capital equipment coming out of US factories had risen by 2.7% over the past year. The price of finished consumer goods, less food and energy, coming out of US factories had risen by 2.8%.

These statistics were not a fluke. For the past decade or more, the price of imported goods from China have been more or less flat, while the price of goods coming out of US factories has risen year after year (chart below). In other words, the gap between the China price and the US price has widened.

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