Companies Brace for End of Cheap Made-in-China Era

An array of low-cost goods in stores of the West is possible because of ample Chinese workers willing to work for a few dollars a day. But the days of low-cost bounty could be ending, as more Chinese are willing to unionize and go on strike for better wages and benefits. Higher shipping costs and pressure from the West for China to increase the value of its currency add to an uncertain business climate. The West expects that appreciation of the yuan would make American and European products less costly for Chinese consumers and ease trade imbalances. Higher prices overall could reduce production of cheap and disposable products, decrease available jobs and increase unrest. “Many companies are striving to stay profitable by shifting factories to cheaper areas farther inland or to other developing countries, and a few are even resuming production in the West,” explains Elaine Kurtenbach, writing for the Associated Press. With uncertainty at many levels, manufacturers take a fresh look at factory locations and product lines. – YaleGlobal