Cheap Chines Goods - End of an Era?

Why American consumers are about to start paying more for clothes, electronics, toys, and just about everything else.

For years, China fed the consumption hunger of Americans through its cheap exoprts. But it seems that $2 t-shirts era will soon end as china is witnessing an increase in cost of production across industries. Deceds ago when large Chinese population wanted jobs desperately, bulk manufacturing for cheap wages looked viable. As a result, labor & environmental laws were violated, people worked for 7 days a week, working environments were just pathetic & there were no respect for intellectual property rights. But economic evolution cycle goes on, wages increased. Also the effect of 1970's one-child-law led to a dwindling demographics in China. Those born then, now-workforce, demand better labor laws, medical insurance & a good working environment. These rising middle class in India & China will ensure that the cost of raw materials continue to increase throughout the world. Inflation grows more rapidly & chinese remibi appreciates against US. All this indicates one thing - era of cheap Chinese goods is coming to an end!

Now US is looking for alternatives - Vietnam, India, Indonesia, Mexico, or Malaysia?

Vietnam - American importers are now looking at Vietnam, for its lower wages. But Vietnam, how hard it tries, has only 85 million people—the size of one Chinese province. Moreover, prices are rising faster in Vietnam than anywhere else in Asia. Also the rising incidence of strikes and labor disputes, and Vietnam looks increasingly like a short-term alternative.

India - India has not yet managed to get its act together to take advantage of China's rising export prices. Importers say India is good at certain things—embroidery, for instance—but not at the volume production. India's road and port infrastructure, while improving, is nowhere near as efficient as China's.

So US importers are looking back to countries they once rejected in favor of China— Indonesia, Mexico, and Malaysia. But none can offers the one-stop shop appeal as China can, where factories make everything under the sun. For the time being, US consumers will still be buying a lot of "Made in China" products—and paying ever more for them - until......!