MonitorWhiff of wishful thinking about stories of onshoring

Dog breath is a big problem for pet owners.

The canine habit of eating every wayside foulness can create a pungent exhalation deeply distressing to the sort of dog owners who allow their pet in the house, or even let it sleep on their bed.

Alert to a gap in the market, an inventive American company has come up with a solution: Orapup - a meat-flavoured oral hygiene implement designed especially to freshen that doggy breath.

Like most businesses selling low-cost plastic items, the company's executives considered manufacturing in China. But moulding problems, shipping costs and extended delivery times prompted them to think again. According to media reports, they decided it was worth paying an extra 5 to 10 per cent in manufacturing costs to make Orapups in the US.

Apparently they are not alone. In his January state-of-the-union address, US President Barack Obama described how companies, including Apple, Caterpillar and Intel, have chosen to site new manufacturing operations in the US rather than in Asia.

"After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three," the president declared, exhorting Congress to help ensure that "the next revolution in manufacturing is made right here in America".

The emergence of this "onshoring" trend has long been predicted. The idea is that fast-rising wages in China, an appreciating yuan and shipping costs pushed up by high fuel prices, will combine with a sinking US dollar, falling American labour costs and cheap US energy thanks to shale gas to erode China's manufacturing cost advantage relative to the United States. In response, companies will go back to making stuff in America again.