Josh Green, the CEO of Panjiva, came up with a thoughtful article entitled Spread The Word: There Isn’t A ‘Next China’.

Manufacturing products in China is going to get more expensive over time. For many importers who survive with a 5% or a 10% net margin, it means their business has to evolve of die.

There have been three ingredients to China’s success: pro-trade government policy, solid infrastructure, and a huge, underemployed labor pool.

It is this last ingredient — China’s huge labor pool — that has kept manufacturing costs so low for so long.

While the speed of change is breathtaking, the fact that things are changing is not a surprise to most sourcing executives, who have seen the writing on the wall for years.

Many buyers are looking at their options in other countries: Vietnam, India, Indonesia, etc. But it won’t be that simple:

The bad news: there is no “Next China,” because there is no country in the world that has [the above-mentioned] three key ingredients.

This is so true. I see the opening of China to export manufacturing as a historical exception. The World’s most populous country was entirely closed, then opened up pretty fast and did all the right moves to attract foreign buyers. Don’t expect that to happen again in your lifetime…

So, what should buyers do? Green’s response is to plan for it internally, and to make operations & supply chain more efficient.

Actually there might be a “Next China”, if transport costs keep rising: it will be the US and Europe! It seems like a “reshoring movement” is emerging:

A small but growing band of U.S. manufacturers — including giants such as General Electric (GE), NCR (NCR) and Caterpillar (CAT)— are turning the seemingly inexorable offshoring movement on its head, bringing some production to the U.S. from far-flung locations such as China.

Chinese wages and shipping costs have risen sharply in the past few years while U.S. salaries have stayed flat, or in some cases, fallen in the recession. Meanwhile, U.S. manufacturers have been frustrated by the sometimes poor quality of goods made by foreign contractors, theft of their intellectual property and long product-delivery cycles that make them less responsive to customer demand.