Backshoring: Main drives and effects

During last decades, derived by low wages in foreign countries, a trend of offshoring production was adopted tremendously by many companies, especially in the US and Europe. However, a recent trend of backshoring production is rising increasingly through different sectors. In this paper, we analyze the annual wages in China, as a low waged country, and the US, as one of the major countries to backshore its production, in order to better understand the cost reduction that will come of backshoring production. The predicted results supports the current state of global economy, as well as the current trend to backshore businesses. The gap wage between countries which was considered once an advantage earlier is closing down leaving backshore as more feasible option.