That the plunging U.S. dollar, rising labor costs and atmospheric fuel and energy costs have combined to erode China's cost advantage isn't news. (See here and here).

But the cover of the most recent Business Week asks "Can the U.S. Bring Jobs Back from China?" and its answers are startling, if not surprising to manufacturers with a modicum of memory.

This would seem to be a good time for an American manufacturing renaissance. The economics of global trade are starting to tilt back in favor of the U.S. to a degree unseen in a generation. Since 2002 the dollar has plunged by 30% against major world currencies and is falling against the yuan. Wages in China are rising 10% to 15% a year. And spiking oil prices are driving up shipping rates. The cost of sending a 40-foot container from Shanghai to San Diego has soared by 150%, to $5,500, since 2000. If oil hits $200 a barrel, that could reach $10,000, projects Toronto financial-services firm CIBC World Markets.

But while the tilting of fortunes is real, author Pete Engardio does a great job of tempering any enthusiasm with a pragmatic understanding that seizing work back - on a grand scale, at least - is gonna be hard.

... the map of global commerce can't be redrawn overnight. American factories and supplier networks in many industries have withered in the era of globalization, so it will take lots of time and capital before the U.S. can become a big player again. The bulk of goods made in China-clothing, toys, small appliances, and the like-probably won't be coming back, because they require abundant cheap labor. If anything, their manufacture will go to other low-wage nations in Asia or Latin America. And in industries from machinery to motorbikes, China's productivity gains nearly offset rising wages and fuel prices.

Of course, there are numerous opportunities for SMBs to regain some work or for the U.S. to build infrastructure around nascent industries and products. And Engardio provides some compelling examples:

Examples of production shifts abound. Chinese steel exports to America are down 20% in the past year, notes CIBC, while U.S. steel output has jumped 10% despite the slowdown in construction. Big electronics manufacturers are expanding assembly of high-end telecommunications, computer, and medical equipment in Mexico and some parts of the U.S. for greater proximity to corporate buyers. Tesla Motors, which has just begun production of its $109,000, electric-powered sports car, transferred assembly of battery packs from Thailand to a plant next to its San Carlos (Calif.) headquarters. Thailand's low factory wages were more than offset by the costs of shipping thousand-pound battery packs across the Pacific. "We were seeing tens of millions of dollars of value sitting on the water for months," says Darryl Siry, Tesla's vice-president for marketing. "It was one of those things that became obvious all of a sudden, and you said, Why are we doing this?'"

But the realities suggest that the meaningful, industry-wide shifts are years away, and it'll take more than associations and Web sites to meet the challenges.

What would be required, for instance, for the U.S. to re-emerge as a player in batteries? It is an industry, after all, on the cusp of radical technological change that could spur development of future eco-friendly vehicles, cell phones, and home appliances. Boston-Power's (Christina) Lampe-Onnerud has suggestions, but America may not be ready for them. Washington could lend up to $50 million in seed capital to promising startups, for example, and state governments could build industrial parks with low-cost facilities and services that rival those found in China. "If we got state and federal support," she says, "we would team up with others in a heartbeat and grow an industry."

In the meantime, real opportunities exist for SMBs to take advantage. Use the converging issues - the falling dollar, rising Chinese labor costs, the uncertainty of shutdowns during the Olympics, VAT rebate adjustments, and skyrocketing fuel & shipping costs - as good reasons to engage old customers and new prospects on the benefits of manufacturing locally in a mature economic market. Many buyers are feeling the squeeze and are willing to listen.

Waiting for your governments to react - ahem - might not be the best strategy at the moment.