Confucius said: “The expectations of life depend upon diligence; the mechanic that would perfect his work must first sharpen his tools.”

This quote complements our cover story this month, which highlights a recent study by Grant Thornton entitled “Is China in Your Future?” A few years ago, the response from many U.S. manufacturers would have easily been “Of course!” But the heady days are over, and in some ways it’s probably not a bad thing. If there’s been one upside to the current economic crisis it’s that people (and companies) have become more careful, deliberate, and thoughtful in their spending.

To be sure, the allure of China’s low-cost labor is hard to deny. But now that the ‘Gold Rush’ has started to subside and the fallout of the global economic crisis has started to set in, the hard-core business intelligence and anecdotal evidence has begun to paint a different picture of China. Not necessarily an unfavorable one, but a more realistic one.

Do U.S. manufacturers need to think about China’s labor costs? Yes, because in some ways it’s not the bargain that it was several years ago. And they also need to consider other items, such as intellectual property protection, quality control, managerial talent, and a host of other risks and intangibles.

In fact, when it comes to proprietary processes, or the “secret sauce” as Wally Gruenes, co-author of the study, puts it, “If it can be lost, it will be.” That’s a pretty harsh assessment of the business environment in China, yet it’s also an accurate and honest one. Does that mean companies should avoid China altogether? No, it means they need to develop workable strategies, like performing the more technical pieces of the manufacturing process in the U.S. or Europe and using China for the other parts of the process.

Not only are U.S. manufacturers being prompted to rethink their China strategy, even historically low-risk NAFTA trade has offered up some surprises lately, according to contributing writer Andrea MacDonald, who points out that the “Buy American” provision in the American Recovery and Reinvestment Act (ARRA) is causing considerable friction between the U.S. and its NAFTA partners (see “NAFTA: A Delicate Balance,” page 30). And if that’s not all, trade facilitation seems to be a misnomer these days. Prior to 2001, U.S. Customs and Border Protection’s ACE (Automated Commercial Environment) program, which was designed to facilitate trade and enhance border security, required shippers to provide 15 data elements; today the program requires 100 data points, and some must be provided prior to the goods being loaded at a foreign port, MacDonald writes.

Meanwhile, along the Gulf Coast, ports are doing their own ‘rethinking’ now that the potential promises of the Panama Canal expansion are coming into view, reports contributing writer Dan McCue. In his interview with Gary LaGrange, CEO of the Port of New Orleans, the central theme was embracing the virtues of diversity as a key operational strategy. In 2008, the port experienced its worse year since 1985. The effects of Hurricane Katrina were still being felt. Shipments of almost every bulk product were down by double digits and competing ports in the region were moving ahead. But business has begun to turn around, and in July the port experienced a 57 percent rise in containerized traffic.

Some may attribute this to the power of positive thinking. I’d like to call it just plain thinking.