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Buck Up, America: China Is Getting Too Expensive

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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:41 PM
Original message
Buck Up, America: China Is Getting Too Expensive
In the Great Game of global wage and cost arbitrage, bits of some rather surprising industries are drifting back to U.S. shores, and the pace could quicken. Furniture makingusually labor intensive and low-skilledis just one shocker. On Tuesday Ford said it will build some auto parts in the U.S. that have traditionally been sourced in China. And there's more.

Currency hawks in Congress are this week promoting legislation to penalize China for manipulating the yuan. They might want to take note of this trend: The jobs they want to bring home may already be trickling back to the U.S.emphasis on the trickle.

Bruce Cochrane is emblematic of the incipient shift. He's opening a furniture factory in Lincolnton, N.C., a rare event in a region and industry that have been walloped by outsourcing. Employment in U.S. furniture factories fell by 60% over the last decade.

Mr. Cochrane says furniture made in China and sold in the U.S. previously had a price advantage of up to 50%. That's often down to 10% to 15% now, in part because wages in China are soaringup 15% or more a year in some locales. Shipping costs, he says, have doubled from a few years ago.

http://online.wsj.com/article/SB10001424052970204294504...
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DJ13 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:44 PM
Response to Original message
1. In the back of my mind I keep thinking this is just another
corporate shakedown scheme, one thats meant to force the Chinese government to pressure their industries to keep wages down.

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RegieRocker Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:48 PM
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2. There is still cheap labor in the world, nothing for you to fear.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:52 PM
Response to Reply #2
3. The price of oil will solve that. Shipping will get too expensive.
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FarCenter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:54 PM
Response to Reply #2
5. They will move more stuff to India, Philipines, and the rest of southeast asia
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RegieRocker Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:56 PM
Response to Reply #5
6. Still plenty of areas south of the border.
Check out Paraiso for Sale on NPR.
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tsuki Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:52 PM
Response to Original message
4. One of Son's best friends is getting married this week-end. I thought
that I would sew up something new, then decided to "treat" myself to a new store bought something, long and colorful.

I went to 4 stores, China, China, China and Vietnam. I have never seen clothes so poorly sewn, no darts, pucked facing, thin cotton (I could move the threads with my nail). And the prices, 88 for a top, 120 for a dress sewn as a box, cheap material.

I am to believe that a union worker cannot produce better for those prices?

I'm finishing my outfit tomorrow.

No Craptanista for me.
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xmas74 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 11:04 PM
Response to Reply #4
12. The "in" thing for some is to totally
give up on purchasing new and to instead remake clothes from thrift shops. The quality and material is better than anything on the racks in the stores.
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Creideiki Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 10:59 PM
Response to Original message
7. China's sitting on multiple bubbles, any one of which can pop and set off
the chain reaction leading to un-fun.

A housing bubble, a hidden financial bubble, an infrastructure/employment bubble...

And that's not even counting the food prices that will go even higher due to climate change-induced agricultural catastrophes.
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Kennah Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 11:04 PM
Response to Reply #7
11. One wonders if the rupture of said bubbles would actually IMPROVE the U.S. economy ...
... when we're forced to start making shit again?
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X_Digger Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 11:00 PM
Response to Original message
8. So is India.. but there are other cheap markets for labor..
Much of our previously India based offshore development is moving- to Argentina and the Dominican Republic.
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Dragonfli Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 11:03 PM
Response to Original message
9. That's why they want three new "free trade" deals silly, they need more slave labor /nt
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FarLeftFist Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 11:04 PM
Response to Original message
10. This is actually sad news.
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Initech Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-06-11 11:08 PM
Response to Original message
13. I call it "virus economics"
It started with the US. Then it moved out of the US to Japan.

Then Japan got too expensive. Now it's moved to China and India.

Now China and India's too expensive. Soon it's gonna move to Thailand and Laos.

Then when Thailand and Laos get too expensive, it'll move to Uganda and Nairobi.

Then when those get too expensive they'll move to Ecuador and Peru.

And so on and so forth. Virus economics - destroying the world one country at a time.
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mistertrickster Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-07-11 11:00 PM
Response to Original message
14. I lived in China in 1982. The official exchange rate was a ridiculously high
8 yuan to the dollar.

Now, almost 30 years later, the yuan is a ridiculously LOW 6.15 to the dollar.

It should be about 4 to the dollar, given the colossal trade deficit, but the Chinese keep buying American Treasuries to keep the dollar strong against the yuan.

They've been gaming the system for years, which is why Obama is putting the screws to them.
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JackDragna Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Oct-07-11 11:06 PM
Response to Original message
15. There's always Bangladesh!
RACE! RACE! RACE TO THE BOTTTOOOOM!
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