How the World Ran Out of Everything

Many American companies manufacture their products in China.

When a young engineering graduate in Mississippi started a business and scored a contract to manufacture luminous, floating Sesame Street figures, he needed a place to build them in an affordable way. Though he had received an internship in California and an offer for a well-paying job, Silicon Valley did not appeal to him. He wanted to stay home in the American South and provide local people with jobs.

China provided an appealing place for Western companies to manufacture their goods. It offered advantages as an increasingly important manufacturing hub. The United States had ceased developing or nurturing manufacturing and often lacked adequate capacity. In contrast, China is rich in raw materials. It spent decades cultivating its production capacity in multiple industries, including chemicals, plastics, rubber, and metal.

Chinese factories could manufacture just about any product and its parts, and had access to necessary, sometimes rare, materials. For example, the Mississippi start-up company could communicate online ...