Local Manufacturing May Come Back as the Forces of Globalization Wane

Korea had benefitted from globalization, but with a secular change occurring, it may be more hurting the Korean economy than helping it.

A nation should be as self-sufficient as possible for the benefit of the general public and industrial base is a big part of that.

The below article is about the U.S., yet have implications for the Asian countries as well.

One may have to look at these individual perspectives and events unfolding by connecting the dots in the larger context.

From Market Watch:

Consider the simplified version of how the main engine of global economic growth worked until 2008: U.S. and other Western consumers bought cheap goods made in China, which used the cash to buy U.S. government debt, thereby financing more and more U.S. borrowings and consumption of goods from Asia and elsewhere.

U.S. consumers in turn benefited from cheaper goods but that came at a cost: manufacturing jobs went to Asia. Meanwhile, all the debt-relying industries, namely housing, financial services, and consumer-discretionary goods, ballooned in the U.S. and in a number of other industrialized countries.

The engine has stopped. After the huge drop in U.S. demand following the financial crisis and the ongoing economic slump, it will take years for employment, consumers and the economy to recover.

But while all the debt-relying industries might have reached a top, U.S. manufacturing is finally emerging “after years of carving out a bottom,” says Rosenberg.

“It’s now often cheaper to produce at home than it is to produce abroad,” says Rosenberg.

http://www.marketwatch.com/story/welcome-to-the-new-wild-local-frontier-2010-09-21?link=kiosk