Chinese-Made Gadgets Going to Get More Expensive
From Alexandra Harney's piece at Slate:
The era of cheap Chinese consumer goods may finally be ending, thanks to irrepressible inflation. Now when the Chinese present their lists, some American importers are conceding higher prices, meaning that American shoppers, for the first time in years, are starting to pick up the tab for rising costs in China. Some Chinese factories are now asking their American customers for price increases of as much as 20 percent to 30 percent.Everything we buy has a real cost from the environment, local economies, and the people who produce our products. Things should cost more than they do in the West. This is a good correction. (Not that I won't kvetch, too.)
The Last Days of Cheap Chinese [Slate]
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For goodness sake how many times a day am I going to have to sign in now? Something is wrong here.
Everything imported is going up. I was at the wine shop today and the owner showed me price sheets with significant increases for products from all over the world. Apparently companies exporting to the USA have absorbed as much of the Dollar's decline as they're able to.
If these demands for price increases continue the West may well stop "carrying a torch" for cheap Chinese imports as well as the Olympics!
Caledonian Jim
http://www.caledonian-comment.com
It is not the increased costs in China but the dollar's devaluation.
The prices of Chinese imports for europeans are still going down ....
My contact has mentioned the considerable increase in the price of oil as an important factor.
Maybe we can turn Mexico into the next productive version of China, building up their factories and infrastructure so at least the economy is kept on the American continent and also might help the immigration problem as a side effect? To the best of my knowledge Mexico doesn't use slave labor like China does, which is a bonus morally.
@5. That's been happening ever since NAFTA. Remember Perot's 'giant sucking sound' of jobs leaving? In recent years Mexican plants have been losing jobs to China.
The cause for this is all those things...and it's all over Asia not just China.
Devaluation of the dollar, rising oil prices hence higher water shipping costs, rise in cost / shortage of raw materials like copper, new labor costs and shortages.
Moving everything to Mexico, interesting idea. But there are particular traditions of craftsmanship in some Asian made items that Mexico just doesn't have and isn't going to get -- unless all skilled Asian factory workers move there.
@7. The point of mass production is that skill is replaced by technology and process. In a properly designed production environment, any person can be trained to fill any job. Factories are moved around all the time with minimal disruption of quality.
Craftsmanship is a separate issue, and some products will continue to be made where local labor has appropriate necessary skills.
Folks :
A price increase in the cost of creating goods in China is not even close to a one-to-one match for prices in the US. iPods are an extreme example. Of the $140+ retail price of an iPod, only $4 goes toward production costs in China. Doubling the cost will only add another $4 on the cost of an iPod.
While this will be less true of simple toys and the like, it is unlikely that a 30% increase in Chinese production costs will have any noticeable effect on TV's, coffee table books, stereos or the other items most often sourced from China.
From Budapest,
PE
I've seen this personally. A Chinese supplier just mentioned to me yesterday that they're seeing their currency appreciate at the rate of about 1%/month vs. the dollar. Quotes don't stay valid long, and every time I order something it's a little more expensive.
I think it'll be a good thing for the Chinese people, though. They've got a HUGE potential domestic market - far larger than the US - but their purchasing power has been kept low by the same manipulation of the Yuan that has kept Chinese imports attractive to the US. Now that that's changing, I'd expect to see the Chinese selling more to their own people, which should also lead to more innovation and a higher standard of living - but yeah, cheap Chinese electronics are on the way out.
But we've still got Vietnam, India, most of Africa, and many other developing regions to exploit still, right?
The end of cheap Chinese electronics doesn't bother me particularly. I'm just curious how long it will take to bring essentially the entire world up to a standard of living such that very cheap labor exists nowhere.
anybody seen Ha HA HA America?
http://www.atomfilms.com/film/haha_america.jsp
gtron
beginning of the end.
I think the post should be retitled from
Chinese-Made Gadgets Going to Get More Expensive
to
Imported Gadgets Are Going to Get More Expensive in America Due to Devaluating US Dollar and Rising Oil prices
Well, this is not just something that we are going to see with gadgetry. I work in the bike industry and according to the price trends in Taiwan the prices of bicycles will also be going up between 15 and 30% by this time next year.