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According to a recent survey, nearly 40% of US companies are preparing to move their factories back from China to the United States. Whether this number is accurate or not, this trend will pose challenges for Chinese manufacturing. According to data from the Ministry of Commerce, foreign direct investment (FDI) has experienced a short-term positive growth of 0.05% year-on-year since May last year, and negative growth in other months, with FDI falling by 6.87% in June. The United States was once the world's largest exporter of industrial capital. However, with the orderly advancement of the US “re-industrialization†strategy, US capital and technology outflows will gradually reverse, and may be transformed from a net exporter of overseas direct investment to a net importer. Not only will it lead to the return of US capital, but its various advantages and huge market will also attract global capital and make China's attractiveness decline. In August 2010, the United States passed the Manufacturing Promotion Act, which will suspend or reduce tariffs on imported raw materials for manufacturing. According to a report by the National Association of Manufacturers, the bill could increase production by $4.6 billion and create nearly 90,000 jobs. The September 2010 “Creation of Employment and Ending of the United States†Act proposes to provide a 24-month payroll tax credit for companies that repatriate from overseas and terminate the transfer of factories and manufacturing companies to overseas locations. Subsidies, such as tax exemptions and tax cuts. In early 2012, Obama issued his third State of the Union address to determine the theme of his 2012 election campaign, and proposed four pillars of US manufacturing, local energy, labor technology training and US value to build a blueprint for sustainable development of the country. The United States even wants Established a trade law enforcement department to investigate trade behaviors in China and other countries, and vowed to take back the lost American manufacturing. The return of American manufacturing is huge, and where is China manufacturing going? This is a major challenge before China. The factor dividend has always been the first driver of China's rapid growth. Under various favorable conditions, the marginal rate of return on capital invested in China is usually higher than that in developed countries, and global productive capital continues to flow into China. However, with the disappearance of the favorable advantages of the population, the labor cost gap between some industries in China and the United States has rapidly narrowed. It is predicted that China's wages in US dollars will increase by 15% to 20% per year, exceeding the productivity growth rate. After considering the higher productivity of the United States, the labor cost between China's coastal areas and some low-cost states in the United States has been huge. The gap is likely to shrink to below 40% of current levels by 2015. If we consider shipping costs and various hidden costs and supply chain costs, China's overall cost advantage will become small. Of course, the labor force is not the only factor that changes China's competitiveness. China's factor prices are generally rising. Since 2010, China's electricity costs have soared by 15%. The rise in the price of imported thermal coal and the termination of preferential tax rates for high-energy-consuming enterprises have also pushed up the operating costs of these industries, which account for 74% of China's electricity consumption. In addition, China's industrial land is no longer cheap. In fact, the price of commercial land in China has already greatly exceeded that of the United States. The cost of industrial land in the coastal city of Ningbo is $11.15 per square foot, $14.49 in Nanjing, $17.29 in Shanghai, and $21 in Shenzhen. China's national average is $10.22 per square foot, compared to $1.86 to $7.43 per square foot for industrial land in Alabama, and $1.30 to $4.65 for Tennessee and North Carolina. Although the transfer to the west can reduce the cost of land use, the logistics cost of enterprises will increase significantly, and it may lose the convenience of coastal industrial clusters. The latest research report of the Boston Consulting Group pointed out that about 10 years ago, the United States began to outsource machinery, computers and other products that accounted for a considerable proportion of the US manufacturing industry. As the cost advantage of American manufacturing became more and more obvious, this situation is changing because China is fast. The salary increase, while the US labor productivity is four times that of China. The report predicts that 15% of US companies will return from China to the US in the next five years, and the manufacturing industry most likely to return to the US includes transportation, electronic equipment and equipment, furniture, plastics and rubber products, machinery, and metals. Products and computers. These categories of goods account for nearly 70% of US imports from China, accounting for about $2 trillion in annual consumption of US consumers. In addition to the gradual shrinking of the cost gap, more may come from innovation and technology challenges. In the past two years, although the fundamentals of the US economy have been difficult to improve, the government's R&D budget has not decreased. In 2011, it reached US$148 billion; corporate R&D investment far exceeded this figure. In Microsoft alone, R&D spending in 2011 reached $9.5 billion, 90% of which went to the extremely critical "cloud computing" field, and Intel's 2011 technology investment in the second year was also $6.5 billion. Among the top 30 global IT enterprise R&D investment, there are 12 in the United States, followed by Japan, and 10 in China. Only Huawei is listed in China. In 2011, US R&D investment accounted for about 33% of the global share, which is two and a half times that of China. High-end manufacturing is the core goal of the US “re-industrialization†strategy. The United States has officially launched a high-end manufacturing program and is actively pursuing research in the fields of nanotechnology, high-end batteries, energy materials, bio-manufacturing, next-generation microelectronics R&D, and high-end robots. Promote the development of high-end talents, high-end elements and high-end innovation clusters in the United States, and maintain leading R&D, technology leadership and manufacturing leadership in high-end manufacturing. Based on the above analysis, the return of industrial capital in the United States has become a major trend. For China's manufacturing, it is necessary to reinvigorate China's manufacturing as the core of China's long-term economic strategy. It must not lose its cost advantage gradually, but also because of the lag in innovation. Leading to the double loss of low-end manufacturing and high-end manufacturing advantages.