Manufacturing and China: Volume 5

World Map: The South China Sea

Offshoring/Onshoring and the South China Sea

The history of Offshoring/Onshoring of jobs from/to America over the past two decades is now taking a turn toward a larger global perspective in which the On/Offshoring economic issue has now become but a piece of the history.

The increasingly volatile political climate of China has seen a rise in Reshoring efforts by manufacturing companies who seek to  return production to the United States and more stable environments.

Since the 1970’s and 1980’s China has been involved in confrontation with other nations in the area such as Vietnam over rights to fishing and exploration. That dispute between China and the other Asian nations whose shores border on the China sea lanes has exploded as China asserts its claim to virtually all of the waters off the eastern coast of China.

Many events have occurred since then and China has continued to build up two coral reefs in the South China Sea called Fiery Cross and Mischief Reef with military runways, radar, missile batteries, military jets and numerous ships.

In 2013 the Philippine government filed a law suit with an international tribunal in The Hague under the Law of the Sea Treaty. The verdict was only recently handed down in July of 2016 resulting in the Tribunal backing the claim of the Philippine government and nullifying Chinese claims.

In response, the Chinese government claimed the ruling is null and void, and continues its expansion efforts in the South China Sea.

Photo Credit: Victor Robert Lee, Digital Globe and Airbus Defense & Space


With the goal of assuring the sea lanes in the South China Sea remain open, The United States Navy in concert with the navies of several other Asian countries (including Australia), have begun exercises in the area.  The US Naval presence alone is formidable and along with the other navies the situation has become grave.   The number of weapons and increasing tension in the South China Sea bear watching and observation.

We are presenting this short article because some of you are likely decision makers in manufacturing and engineering companies with holdings in China.

We hope this information will provide impetus for further research and strategic planning for your company’s interests if they are currently abroad.

We will bring more news of China in our upcoming newsletter.  Please leave any comments below and let us know what you think!