Walk onto the shop floor at Prince Industries in Shanghai, China and it looks like most other manufacturing plants in this country. It's busy running two shifts, cranking out components that will be shipped to major manufacturers like Caterpillar, Siemens, and Honeywell.

But change is in the air.

The cost of manufacturing in China is going up and rising quickly.

"It's something that we anticipated when we went to China, we just didn't know how quick it would happen," said Mark Miller, CEO of Prince Industries.

(Read More: China January to March FDI at $29.9 Billion, Up 1.44% Year-on Year)

China and US Costs Even by '15

China is no longer a slam dunk for manufacturers looking for the lowest cost for operations.

In fact, a new study by the consulting firm AlixPartners estimates by 2015 the cost of outsourcing manufacturing to China will be equal to the cost of manufacturing in the U.S.

"The Chinese manufacturing cost advantage has eroded dramatically in the last few years," said Steve Maurer, AlixPartners managing director. "If you go back to 2005, it was pretty common for landed cost from China to be 25 to 30 percent less than the cost of manufacturing in the United States. Based on our analysis, two-thirds of that gap has closed."

(Read More: Not Concerned About Hard Landing in China: IMF)

Maurer said higher labor wages, the rising value of China's currency, and the cost of shipping goods from China to points around the world have made manufacturing in China more expensive.

"If trends continue, the China cost is going to be on par with U.S. cost in the next four to five years," said Maurer.

More from CNBC:
-- Would You Buy a Man-Made Diamond?
-- How Much Financial Advice Do We Need?
-- How to Spot a Fake: Rare Books

Higher Wages, Rising Currency

Since Prince Industries opened its plant in Shanghai a decade ago, wages have increased an average of 12 percent annually, while China's currency, the RMB, has appreciated 25 percent vs. the U.S. dollar.

(Read More: Bigger Is Better: SUVs and CUVs Rule The Road in China)

The rising value of the RMB was expected and has made it more costly to ship goods built in China around the world.

Meanwhile, hourly wages have been going up steadily due to China raising minimum wages, while competition for labor has forced manufacturers to pay more to attract skilled workers and keep them.

Pulling Out of China or Moving Further Inland?

As the cost of manufacturing in China has risen, so have reports of companies pulling their plants out of the country to find cheaper locations.

Some have re-shored facilities to the U.S., where cost differences are offset by higher productivity of American workers.

(Read More: Has China's Economy Hit a 'Dead End'?)

But few expect a mass exodus of manufacturers in China.

"I don't think companies are going to pull out of China," said Hal Sirkin with the Boston Consulting Group. "Because of Chinese domestic demand which is growing at 8 or 10 percent a year, even if they decide to pull out their export plants they will then convert those plants, basically re-tool them into Chinese consumption because there is a great market in China given all that growth."

Sirkin said manufacturers squeezed by higher costs in more expensive cities on the coast of China like Shanghai will increasingly look to move plants to inner or western China where labor costs are lower.

"Some companies have found success in inner China and others have decided it is not worth it for them because they cannot get the productivity that they need," said Sirkin.

Made in China and the US

Even with manufacturing costs rising in China, Prince Industries has benefited from expanding its operations outside Chicago to include a plant in China. Since making the move into China, the firm's annual revenue has doubled to $40 million.

(Read More: Can China Turn 'Economy on Steroids' to Real Growth?)

Much of that growth is spurred by the Prince Industries plant in Shanghai supplying customers who are manufacturing in China.

Given the changing market, would CEO Miller still expand to China?

"I think for us it made sense, it doesn't make sense obviously for every U.S. manufacturer," he said. "Once we announced that we were going to China, we had to convince our U.S. workforce that we weren't going to move all of our manufacturing to China and just become a shell over here. Fortunately for us it worked out."

—By CNBC's Phil LeBeau; Follow him on Twitter @LeBeauCarNews

Questions? Comments?

Loading Slideshow...
  • 10. Georgia

    <strong>Net job change:</strong> -87,700 <strong>Jobs lost:</strong> 101,200 <strong>Jobs gained:</strong> 13,500 Georgia has lost a significant number of jobs, primarily in industries "including computers and electronic parts, textiles and apparel, and furniture," according to the EPI. One of the hardest hit districts in the country was the state's 9th congressional district, which is located in the northern part of the state and includes the city of Gainesville. Georgia has historically been known for its textile industry and remains one of the top cotton-producing states in the country. <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 9. Massachusetts

    <strong>Net job change:</strong> -88,600 <strong>Jobs lost:</strong> 99,300 <strong>Jobs gained:</strong> 10,700 Two of the nation's 20 hardest-hit congressional districts are located in Massachusetts. The first of these is the 5th congressional district, which includes the cities of Lowell, one of the country's earliest textile centers, and Lawrence, home of a number of textile and electronics manufacturers. The state's neighboring 3rd congressional district also lost an exceptional number of jobs. This district includes Worcester, another historically significant textile city, which has since increased its technology industry. <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 8. Ohio

    <strong>Net job change:</strong> -103,500 <strong>Jobs lost:</strong> 124,100 <strong>Jobs gained:</strong> 13,500 Ohio is one of the U.S.'s biggest manufacturing states. It is home to major companies such as Procter & Gamble and AK Steel Corporation. However, the state's manufacturing sector is declining at a faster rate than the nation's. The automobile sector has had the highest unemployment growth since 2007, although companies in other sectors have contributed to sending jobs overseas as well. <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 7. Pennsylvania

    <strong>Net job change:</strong> -106,900 <strong>Jobs lost:</strong> 127,200 <strong>Jobs gained:</strong> 20,200 According to the <a href="" target="_hplink">National Association of Manufacturers</a>, "Manufacturers in Pennsylvania account for 12.5 percent of the total output in the state" and employ "10 percent of the workforce." Politicians have been outspoken about China's effect on the state's economy. Senator Bob Casey recently stated that "Unfair Chinese trade practices harm Pennsylvania businesses ... and reduce their ability to create jobs." <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 6. North Carolina

    <strong>Net job change:</strong> -107,800 <strong>Jobs lost:</strong> 122,400 <strong>Jobs gained:</strong> 14,600 North Carolina is home to three of the top 20 hardest hit districts in the U.S. Textiles and furniture are among the two industries that have lost the most jobs to China, according to the EPI report. North Carolina Congressman Howard Coble is co-sponsoring House Bill 639, the Currency Reform for Fair Trade Act, to address this issue. "This bill will at least force China to compete on a level playing field with U.S. manufacturers," Coble is quoted as saying in the <a href="" target="_hplink"><em>Winston-Salem Journal</em></a>. <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 5. Florida

    <strong>Net job change:</strong> -114,400 <strong>Jobs lost:</strong> 134,500 <strong>Jobs gained:</strong> 20,100 Florida is not normally considered to be a major manufacturing state, yet it does excel in some areas, such as medical device manufacturing. The state has lost almost 115,000 jobs to China from 2001 to 2010. Governor Rick Scott has been a <a href="" target="_hplink">supporter</a> of business relations with China, but other local politicians have not been as hospitable. In 2007, Mayor John Mazziotti of Palm Bay <a href="" target="_hplink">proposed a ban</a> on items made in China, stating that the city was "losing jobs left and right to them." <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 4. Illinois

    <strong>Net job change:</strong> -118,200 <strong>Jobs lost:</strong> 139,400 <strong>Jobs gained:</strong> 21,200 Illinois is another traditional manufacturing power that has lost a significant number of jobs to China. Robert Scott, director of manufacturing and trade policy research for EPI, told Illinois <a href="" target="_hplink">WJBC radio station</a> that "In Illinois you also have a large number of firms involved in industries like auto parts production and fabricated metal products, and those are industries that were hurt by the growth of imports from China." China also exports lots of electronics and specialty steel -- industries that were once major sectors in Illinois. <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 3. New York

    <strong>Net job change:</strong> -161,400 <strong>Jobs lost:</strong> 183,300 <strong>Jobs gained:</strong> 21,900 "New York has lost 140,000 predominantly middle-wage manufacturing jobs in recent years as a result of China's unfair labor practices," said James Parrott, deputy director and chief economist at the New York-based Fiscal Policy Institute in the <a href="" target="_hplink"><em>Times Union</em></a>. New York Senator Chuck Schumer has <a href="" target="_hplink">made efforts</a> to encourage China to further appreciate its currency. <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 2. Texas

    <strong>Net job change:</strong> -232,800 <strong>Jobs lost:</strong> 269,300 <strong>Jobs gained:</strong> 36,400 Texas has suffered greatly from the trade deficit with China due, largely, to the prominence of the computer and electronic parts industry in the state. Four of the top 20 congressional districts that lost the most jobs in the country are located in the state. Many Chinese companies have close ties with Texas. Two companies, Huawei and ZTE, have set up their U.S. headquarters in the state. Oil company CNOOC has also bought an exceptionally large amount of mineral rights in the state in order to extract shale oil. <a href="" target="_hplink">Read more at 24/7 Wall St.</a>

  • 1. California

    <strong>Net job change:</strong> -454,600 <strong>Jobs lost:</strong> 519,000 <strong>Jobs gained:</strong> 64,300 California has lost almost half a million jobs to China, according to EPI. Like Texas, many of these were lost in the computer and electronic parts industry. Additionally, eight of the nation's 20 hardest hit districts are in the state. Governor Jerry Brown has proposed ways to win back jobs from China outside of the computer sector, such as green technology. In his race for governorship, Brown said that he would create thousands of clean-energy jobs, "reclaiming from China leadership of the cleantech economy." <a href="" target="_hplink">Read more at 24/7 Wall St.</a>