We are About to Experience Higher Prices from China
A lot of Americans are feeling the pinch at the gas pumps, in the grocery stores and in other retail outlets.
Fact is, we’ve been spoiled with cheap goods. But it looks the ride we’ve had with goods produced inexpensively in China is beginning to come to an end. The Voice of America reports that prices are going up in China, too:
“The world’s factory is giving notice: it can no longer provide the planet with cheap goods. Chinese manufacturers say higher production costs, tighter credit and a strengthening yuan are squeezing margins. Some industry experts and economists predict thousands of small factories could shut down this year and leave thousands of workers jobless - creating new problems for China.”
A recent article in Forbes by Michael Marks points out how we can look forward to ricing costs — and we should be careful what we wish for. For years now politicians have been decrying the ‘articifically low” pricing in China that led to the loss of manufacturing jobs.
“Many of these articles and speeches were aimed at getting our politicians and policymakers to force China and other developing countries to bring their costs into line with those in the U.S. so that we can create jobs at home. While the employment initiative is an admirable undertaking, the debate completely ignores the impact on the pricing of goods in American stores, and the impact that will have on inflation rates and standard of living in this country. (The debate also ignores the substantially positive impact on the economies of developing countries, but that’s for another day.)
Now we are about to find out why we should be careful what we wish for. Brace yourselves for a myriad of articles and speeches complaining about rising costs of products like steel, consumer electronics, and kitchenware, due to rising inflation and appreciating currencies in the developing countries.”
So look out for higher prices, in your personal life and also for raw materials and business supplies.
