China’s ‘American Factory’ Boss Says Supply Chain Reshoring is Happening

April 20, 2020 Updated: April 20, 2020

News Analysis

Chinese tycoon Cao Dewang, who purchased the U.S. glass plant chronicled in the award-winning documentary “American Factory,” warned China that Western reshoring of supply chains is happening amid the pandemic caused by the CCP (Chinese Communist Party) virus, a novel coronavirus.

Cao Dewang, also known as Cho Tak Wong, committed $600 million to buy a closed GM glassmaking plant in Ohio with the promise to bring back 800 U.S. manufacturing jobs. Despite constant UAW (United Auto Workers) organizing efforts, his Fuyao Glass America invested over $1 billion to create 2,400 U.S. jobs by adding production facilities in Greenville, South Carolina and Detroit, Michigan.

Fuyao was one of the first Chinese manufacturers to “reshore” manufacturing outsourced to China, back to America. Cao emphasized that his investments were strictly motivated by cost advantages associated with “cheap U.S. land, reasonable energy prices and lower tax burdens.”

With glassmaking as one of the most energy-intensive basic industries, consuming 13,140 BTU per dollar of product, Fuyao benefited from the U.S. fracking boom.

The South China Morning Post reported that 74-year-old Cao told The Beijing News that China must begin preparing for change after the CCP virus pandemic, because “the global industrial chain will reduce its dependence on China.”

He warned that with the CCP virus revealing risks from over-reliance on China for manufacturing, coupled with the continuing Sino-U.S. trade war, momentum is building for “shifting production home or to third-party countries.”

Cao believes it will be very difficult for European and American firms to move production back home after losing workers with the necessary production skills. He also agrees that the young entrepreneurs in the United States, Japan, and South Korea are more interested in the Internet and finance industries, than in manufacturing.

But growing worldwide condemnation against the Chinese Communist Party leadership for denying the origin of the CCP virus outbreak, then hiding the scale of the epidemic for months, caused the worst pandemic in over a century.

The Macdonald-Laurier Institute (MLI) organized over 100 Chinese establishment scholars that stated in an open letter that COVID-19 is the CCP’s  self-inflicted “Chernobyl moment.” The manifesto calls on all independent intellectuals to end the uncritical support for the “ridiculous Red Culture” of the CCP.

The MLI letter voices solidarity for the rebellious cry by Chinese professor Xu Zhangrun, now under house arrest in Beijing, to “rage against this injustice; let your lives burn with a flame of decency; break through the stultifying darkness and welcome the dawn.”

Political scientist Andrew Michta wrote in The American Interest this week that the role “China has played in exacerbating the fallout from the coronavirus crisis ought to force Americans to fundamentally reconsider the relationship.” With radical centralization of market networks “exposed as a grave, near-delusional miscalculation,” Mitcha called for a “hard decoupling” with China by extending social distancing to economic distancing.

Japan became the first nation to enter the path of economic distancing from China by announcing $2.2 billion in reshoring incentives as a key piece of its stimulus package to respond to financial disruption caused by the CCP virus.

The U.S. Congress led by Sen. Marco Rubio (R-Fla.) and Sen. Elizabeth Warren (D-Mass.) have introduced bipartisan legislation aimed at ending China’s domination of the global pharmaceutical supply chain and other critical goods. Rubio told the New York Times, “I think that’s now right before us.”