Hard to honestly say if China is low wage. On one hand, their wages have risen as the work force has shrunk now for a few years and tasks are being outsourced to other countries. On the other hand, their currency is pegged meaning that the earning power of the workers should be much higher so that they can afford the things they are making and transition to a consumer driven economy.

> Then why hasn't it yet?

Because the current companies are behind the curve. Most of finance still runs on Excel. A lot of other things, too. AI doesn't add much to that. But the new wave of Tech-first companies now have the upper hand since the massive headcount is no longer such an advantage.

This is why Big Tech is doing layoffs. They are scared. But the traditional companies would need to redo the whole business and that is unlikely to happen. Not with the MBAs and Boomers running the board. So they are doing the old stupid things they know, like cutting costs by offshoring everything they can and abusing visas. They end up losing knowledgeable people who could've turned the ship around, the remaining employees become apathetic/lazy, and brand loyalty sinks to the bottom. See how S&P 500 - top 10 is flat or dumping.

> We might discover that AI capacity is easier to grow in these markets too.

If only because someone else has to build all the nuclear reactors that supply the data centers with electricity. /s

Consider the kinds of jobs that are popular with outsourcing right now.

Jobs like customer/tech support aren't uniquely suited to outsourcing. (Quite the opposite; People rightfully complain about outsourced support being awful. Training outsourced workers on the fine details of your products/services & your own organisation, nevermind empowering them to do things is much harder)

They're jobs that companies can neglect. Terrible customer support will hurt your business, but it's not business-critical in the way that outsourced development breaking your ability to put out new features and fixes is.

AI is a perfect substitute for terrible outsourced support. LLMs aren't capable of handling genuinely complex problems that need to be handled with precision, nor can they be empowered to make configuration changes. (Consider: Prompt-injection leading to SIM hijacking and other such messes.)

But the LLM can tell meemaw to reset her dang router. If that's all you consider support to be (which is almost certainly the case if you outsource it), then you stand nothing to lose from using AI.

I see it the other way around. An internal person with real domain knowledge can use AI far more effectively than an outsourced team. Domain knowledge is what matters now, and companies don’t want to pay for outsiders to learn it on their dime. AI let's the internal team be small enough that it's a better idea to keep things in house.

In a vacuum, sure. But when you take two resources of similar ability and amplify their output, it makes those resources closer in cost per output, and in turn amplifies the risk factors for choosing the cheaper by cost resource. So locality, availability, communication, culture, etc, become more important.

> could take back manufacturing dominance from countries with low wages (like China)?

The idea that China is a low wages country should just die. It was the case 10y ago, not anymore.

Some part of China have higher average salaries than some Eastern European countries.

The chance of a robotic industry in the US moving massively jobs from China only due to a pseudo A.I revolution replacing low paid wages (without other external factors, e.g tarifs or sanctions) is close to 0.

Now if we do speak about India and the low skill IT jobs there. The story is completely different.

China dominance in manufacturing, at least in tech, it's not based on cheap labor, but rather in skills, tooling and supply chain advantages.

Tim Cook explains it better that I could ever do:

https://www.youtube.com/watch?v=2wacXUrONUY

Manufacturing isn’t one uniform block of the economy that is either won or lost. US manufacturers focus on high quality, high precision, and high price orders. China excels at factories that will take small orders and get something shipped.

The reason US manufacturers aren’t interested in taking small volume low cost orders is that they have more than enough high margin high quality orders to deal with. Even the small-ish machine shop out in the country near the farm fields by some of my family’s house has pivoted into precision work for a big corporation because it pays better than doing small jobs

Probably not because America lacks the blue collar skills necessary to build and service the kind of manufacturing infrastructure needed to do what you're describing.

Hard disagree. You can't just one day wake up and double your energy infrastructure.. China is way ahead.

China has more robots per capita than the US

And the idea that China has low wages is outdated. Companies like Apple don't use China for its low wages, countries like Vietnam have lower wages. China's strength lies in its manufacturing expertise