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How To Bring British Jobs Back From China (And Still Make Money)

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Tony Caldeira (centre) and the cast of The Town Taking On China
Tony Caldeira (centre) and the cast of The Town Taking On China

How do you bring manufacturing jobs back to the UK from China?

It's a question that has plagued governments, and businesses, for more than a generation.

By any standards China's economy, boosted by a massive labour force, cheap living standards, a centralised government and massive natural resources, has grown extraordinarly quickly. And while things have slowed down a little of late, and concerns about human rights in some of its factories have made many uneasy, the Chinese economic roar can still be heard in marked contrast to our own stop-start whimper.

But against all the odds, is there now a way to bring British jobs back?

Tony Caldeira might just have shown that there is. He is the owner of a large and growing Kirkby, Merseyside-based cushion and furnishings maker which, in just over 10 years, has grown into a leading supplier for UK retail - and he too once saw the loss of jobs to China as an inevitable fact of life.

"Just before China came 'on side', to push their globalisation agenda and sell products around the world, we realised the Chinese companies were able to sell the products more cheaply to us than we could make them," he told the Huffington Post UK.

"At that time - around 2003, 2004, I didn't have any choice but to close the UK factory and take the business to China."

But now he's bringing those jobs back. At least, he's starting to try, in a story illustrated by a recent BBC 2 programme, The Town That's Taking On China, now available on iPlayer. The two-part series depicts his difficult, but apparently rewarding attempt to staff a factory with UK workers and have them compete on terms with their Chinese colleagues.

So why now? Because as Caldeira points out, deciding to make something in the UK or China was never about anything more than a simple fact: it was cheaper.

And now circumstances in the global economy mean that making products overseas might not be as cheap as you'd think.

"The products at the top of the range that were made in China can now be made in the UK at the same price," he said.

"China is losing its competitive edge. Rapidly."

He claims that a combination of macro-economic factors, including China's maturing labour force, means the UK is getting back on terms.

"After what's happened in the last six to 12 months - because of rising Chinese prices, because of the rise in the value of the renminbi [the Chinese currency], increases in shipping rates and differentials in duty rates between finished goods and raw materials, and the basic fabrics, all of a sudden our UK business is starting to compete again."

In particular Chinese wages have soared. The same worker Caldeira could pay £50 per month in 2004 now earns £250, he says - and food prices have risen alongside wages.

In addition, and as shown in the BBC programme, competition for work among employers - not employees - can be fierce in some areas.

From the UK's point of view, Caldiera said, "retailers are looking at sourcing products that are closer to home" - partly because they are less willing to buy bulk stock in advance.

"A combination of all of those factors helped us make a big decision."

As shown in the BBC show, Caldeira recently hired 20 workers to jobs in Merseyside. But for all his optimism, it wasn't exactly easy. For one thing the skilled manufacturing jobs for which Caldeira was hiring - and paying minimum wage - have virtually disppeared in the UK.

Furthermore, once the workers come on board keeping them was also difficult. Much of the BBC show describes Caldeira's difficulties in retaining staff. And it's not, as you might think, because British workers are lazy, but because there are just easier jobs elsewhere that pay more money.

And despite the programme's inspiring call for "troops in the battle against China’s global dominance", for many in the UK working in a factory just isn't much fun.

"What we're going to have to do in the long term is reevaluate the whole position," Caldeira said. "We're going to have to train people up to manufacturing skills - and that brings about the debate about how we do that, whether in schools and colleges or in-house, and how our British manufacturers find the skills that have been lost to a generation."

There is also a political element - however slight, in this view. Caldeira recently stood as Conservative candidate for the mayor of Liverpool, and while he lost (in fact he came seventh) there seems to be something almost idealogical - as well as economical - about his plan to bring jobs back.

"What the film shows is there are good workers out there who are really keen to build a career for themselves but there are also some people who frankly don't want to work as hard as they perhaps should," he said.

In any case, bringing jobs back is an intriguing idea - and the film illustrates it well. Including its limitations.

"China still has some huge manufacturing advantages," Caldeira said. "The chances of bringing the whole operation back to the UK is quite remote."

One way or another we live in a globalised economy, the film concludes - and that means we will all have to work with, and not against, our Chinese colleagues. For now, at least.

"If the Chinese exchange rate and costs continue to rise..." Caldeira mused. "Who knows what might happen in the future?"