Member-only story
An Economist Compared Tesla’s U.S. and China Factories — and the Result Shocked Everyone
It’s not just “cheap labor.” A head-to-head look at real output, wages, and statistical blind spots reveals why “Made in China” keeps winning
Why is so much of the physical world still stamped “Made in China”?
A lot of people answer instantly: “Because labor is cheap.”
That may have been true 20 years ago. But today, China’s manufacturing output is often cited at around 30% of the global total, far ahead of the U.S. at roughly 16%. If you still think it’s only wages, you’re missing the real mechanism.
Recently, economist Weijian Shan did something straightforward: he used Tesla — one of the rare companies with near-parallel “gigafactory-style” production footprints in both China and the United States — to run a hard, physical-output productivity comparison.
The result surprised many people.
Tesla’s “Tale of Two Cities”
Tesla’s Shanghai factory and its Fremont, California factory are often described as “sibling” plants. They use similar technology and production logic, and they build the same core models (Model 3 and Model Y). That…
