The China Price: More Evidence of its Demise

An AP story confirms what the Businomics Blog reported one day earlier: the end of "the China Price."  (Hat tip to the China Law Blog.)

... American toy makers, who rely heavily on Chinese factories, expect prices to increase 5 to 10 percent for the 2008 holiday season, largely because of rising manufacturing costs.

Costs in China are climbing nationwide, but the greatest pain is being felt in the south, where about 14,000 Hong Kong-run factories could close in the next few months, said Polly Ko of the Economic and Trade Office in Guangdong, which neighbors Hong Kong.

Let me reiterate: this is not the end of Chinese manufacturing, or Chinese exports to the U.S.  But the low-hanging fruit has been picked.  The middle-hanging fruit will be a little more expensive to harvest.

Comments

[Clint]

Bill,
It’s my opinion that the low-cost production countries such as China have helped keep the headline inflation number artificially low while we have been loose with our money supply. In fact, Alan Greenspan said Wal-Mart has a net positive impact on American families because it helps keep inflation down.
When you break down the CPI index you see that some costs have gone down, mainly products produced overseas, while others have gone up, mainly domestic goods and services.
I’m interested to hear your thoughts on inflation and our standard of living in regards to China becoming a relatively more expensive place to produce items in.

Enjoy reading the blog.

[R. Cox]

This problem with China will become more apparent to all soon. Personally, I believe this will lead to more China internal unrest and therefore more of our imports coming from other sources than China. This was all set up and intended. We set them up as a economic powerhouse to their own people using trade, and then we pull the rug out from under them thereby causing the unrest and eventual destruction of their menacing competition, elimination of many of their mouths that would have normally been needing feeding, and of course their militarilly minded elite will return to show their true character, only to be eradicated in total sooner than later. Economic warfare of the wisest kind.

Consider: "Back Talk Engram" and his writings on his economic blog.