Friday, February 01, 2008

Could The Days Of Cheap Goods From China Be Ending?

China's Inflation Hits American Price Tags

How will this affect the US economy? Is China losing its cheap labor?
Could another country with cheap labor rise?

Soaring energy and raw material costs, a falling dollar and new business rules here are forcing Chinese factories to increase the prices of their exports, according to analysts and Western companies doing business here.

“China has been the world’s factory and the anchor of the global disconnect between rising material prices and lower consumer prices,” said Dong Tao, an economist for Credit Suisse. “But its heyday is over. We’re going to see higher prices.”

Many Chinese factory owners say a tough new labor law, which went into effect on Jan. 1, complicates the hiring and firing process and threatens to raise labor costs even more.

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