Is China becoming uncompetitive?

The talking heads in the financial press and on financial channels like to claim that the west's decoupling from China is down to political pressure from Washington. But how true is that?

Remember the political pressure started under Trump, who put tariffs on Chinese goods - and nothing happened. But suddenly in the last year or two, new factories tend to be located outside China. So what has changed? The following chart may have the answer:

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It's nothing to do with geopolitics at all. Chinese labour has been steadily getting more expensive as their workforce shrinks, and is now at the point where it doesn't make financial sense to set up new factories there.

Price is what's driving this.