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Is the era of cheap Chinese products over?

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

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  • Berkana, on 04/09/2008, -3/+68In all honesty, we've needed a reality check for a long time, and this may be it. We've let artificially cheap foreign manufacturing destroy our own manufacturing capacity, and built up massive trade deficits. If we had been wise about this all along, this might not be as traumatic as it will be with our entire country addicted to cheap stuff from China.
    • unreg, on 04/09/2008, -4/+11It wasn't artificially cheap. It was cheap because the people were willing to work for pennies and the overhead costs were non-existent. Sure prices will increase somewhat, but that increase will be restrained by Chinas unwillingness to loose the trade. Remember that manufacturing costs is only a small percentage of the actual price you pay at the store.

      On the flip side, this is good in the long run. Chinas run-away economy is fainlly maturing and now they'll go thought the same things the UNited States and Japan have.
      • WhyBother, on 04/09/2008, -2/+4Trade has traditionally been kept artificially advantageous for China because the tightly control both they supply of money, and information about just how much currency is out there. It allows them to make sure the currency stays undervalued, so the exchange rates suggest it is always favorable to relocate manufacturing to China. In effect, just like bulk traders, they artificially cut the cost of manufacturing to get more customers through the door, then make up the difference in volume.

        If we're smart about this, we can take advantage of rising prices to finally move some manufacturing back into the states, where the (non-service) jobs created will do a lot more to bolster the economy than cheap goods did.
        • thebaron2, on 04/09/2008, -0/+1It's going to take awhile for the increases in wages and living standards to catch up in China to a comparable level in the US still. I wouldn't be holding your breath for manufacturing jobs to start pouring back into the US. Increases in raw material costs are being felt worldwide, so the major factor is the cost of labor, as far as manufacturing is concerned.

          I personally only buy metal displays (the kind you see in your grocery stores) from China, and even with a 20% increase it's still cheaper than in the US. The only downfall is the lead time required since everything has to be shipped by boat. Eventually the costs may even out, but by that point I'd expect India to start getting its act together. I agree with the article, though, that India's rise is still pretty far down the road.

          Ultimately, though, this is to be expected in an increasingly globalized economy.
        • thirteenthcor, on 04/10/2008, -0/+1why are raw material prices increasing?
      • orbit1979, on 04/09/2008, -0/+2"It was cheap because the people were WILLING (my emphasis) to work for pennies"

        Are you sure about that?
        • unreg, on 04/09/2008, -1/+1That's the prevailing wage, is it not? Aren't the people flocking in droves from farm to city in order to work?

    • sandbird, on 04/09/2008, -0/+5The company sent my job to a lower-paid worker overseas, and now neither of us can afford the company product.
    • amoore260, on 04/09/2008, -4/+1Question: Do you buy more from your local grocer than the local grocer buys from you.

      Guess that must be an evil trade deficit too.

    • thirteenthcor, on 04/10/2008, -0/+1It's nice to see you interested in world dynamics, as well as genetics and the search for God... a well rounded person ^_^... in things that matter.
  • ultralights, on 04/09/2008, -16/+5no comments and its down........ quality. must be made in china
    • BrandonB1218, on 04/09/2008, -0/+10You do know not everyone who visits the site posts a comment right? There is thousands more hits than there are diggs and comments. It's not the diggs that make it go down, it's all the traffic. Right?
      • ultralights, on 04/10/2008, -0/+1yes, i do know that, its called a joke..
  • TheWriteGuy, on 04/09/2008, -4/+12I was wondering if prices would eventually start going up on personal electronics and computers. So I've started buying computer components and gadgets that I need, rather than putting these purchases off.
    • popnwave, on 04/09/2008, -1/+8Too bad most electronics become obsolete in 6 months.
      • ja9ae, on 04/09/2008, -0/+5It's precisely this mindset that's getting us into trouble isn't it?
        • SpaceMonkeyZero, on 04/09/2008, -0/+6A $350 cell phone should NOT break after 21 months of use. Yet they seem to do all the time. They design crap to break.
        • Hillyard, on 04/09/2008, -0/+3It's called planned obsolescence when "they design crap to break"
        • iFrikkenR, on 04/09/2008, -0/+1Well they simply figure if you can afford a $350 cellphone, you can afford to replace/upgrade it every other year
    • unreg, on 04/09/2008, -0/+1I don't think the costs will go up as much as the rate of decrease will slow.
    • Metasquares, on 04/09/2008, -0/+2The problem with that is that these parts depreciate in value very quickly. Probably much faster than the prices would otherwise increase.
    • BESTenemy, on 04/09/2008, -0/+1Consumer goods are not an investment as they're often advertised. An investment is something that is able to maintain or increase trensferable value. Gadgets are not an investment. They're a consumer product. They loose value the moment they go out of the box. They loose value if they are used or if they simply sit on the shelf. New technology is getting cheaper. It'll get less cheap from this point on, but it'll still be cheaper.
  • Enron1985, on 04/09/2008, -2/+18This just means its time to look for the next cheap labour hot spot.
    • gadgetuk, on 04/09/2008, -0/+15That just might turn out to be the US - for a while anyway. For the rest of the world the dollar has got a lot cheaper recently so US exports are bound to increase. That'll shrink your trade deficit, increase employment, the dollar will recover and we'll just start the whole merry-go-round again.
      • jmhyer51, on 04/09/2008, -0/+2Positive thinking isn't welcome here.

        Seriously, I do hope you're right.
    • Swivelstick, on 04/09/2008, -8/+1Now that is a true Enron statement; lets exploit whilst we can, screw everything and everyone else.
      • thebaron2, on 04/09/2008, -0/+1That's an economics statement. People, both consumers and manufacturers, will gravitate towards the best cost while maintaining a certain level of quality. That won't change until the consumers start refusing to buy foreign made products, which, despite all of the complaining and promises to boycott non-US goods, never seems to happen.

        The power is ultimately in all of our wallets.
    • davidlow, on 04/09/2008, -0/+3r t f a
      • kerby74, on 04/09/2008, -0/+1And since you are probably too lazy to read the f'ing article, let me summarize... There is no place left on Earth with a population large enough willing to work for the low wages required to keep product prices low... China was it. Viet Nam still has cheap labor but only the population of a single Chinese province.
        • jabelar, on 04/09/2008, -0/+1There is most of Latin America and Africa too. True that no one country has the same sized force, but Japan was once cheap labor, Korea, etc. Also, China is pretty diverse ... I have the feeling there are plenty of rural outlying people who can still be enticed into factories for near-slave labor.
        • jyac, on 04/09/2008, -0/+1you forgot india, the population in india is catching up china in a few years, thanks to the commie's birth control program. but that will take some time, the infrastructure in india is very poor, but they are trying to change that.
        • Enron1985, on 04/10/2008, -0/+0It is not unreasonable to predict that if China is no longer the cheap labor hotbed that it once was, that other countries will try and fill the gap. I did not infer that China could easily be replaced, but if rising costs are becoming a factor for China, you better believe that it will create opportunity for other players.
  • paker, on 04/09/2008, -2/+30I wonder if something like this could, someday, drive jobs back to America.
    • bosssmiley, on 04/09/2008, -2/+7Technically yes. But only when the mean income of most of the industrialised world is smeared into what a Greek fisherman would consider prosperity. Costs in the West will have to fall a *lot* to make reinvestment here worthwhile. Most foreign industrial investment is mainly a way of getting around trade tariffs.
      • klco, on 04/09/2008, -0/+2Well yes and no to your comment, on one hand yeah US manufacturing cost would have to fall, but the weakening dollar will do/has done a lot for that. Furthermore, even recapturing a small portion of the higher ticket or harder to transport items would help us.
    • bfdonnelly, on 04/09/2008, -0/+2Yes. Most people think that we're saving a lot with overseas manufacture, but when the cost of transportation, international business, and lag-time is taken into account, we're only saving 20-25% over the cost of doing it here in a plant that is already in operation. That is not to say that we are geared up to do a lot of manufacture here, so it's probably about 50% cheaper to buy from China than to set up manufacture here. However, once we gear up in about 5 years, we're looking at higher costs, but a more robust economy.
      • thebaron2, on 04/09/2008, -0/+320-25% is a LOT. Many businesses live and die by much smaller margins than that.

        Transportation, at least from China, is rather negligible. Water freight is relatively inexpensive, especially when you consider how many pounds of product you can fit on a barge as opposed to a freight truck. The biggest problem is the lead time when considering China, but that really isn't an issue if you can accurately forecast your demand.

        Of course all of this changes depending on what types of products you're talking about, but as a rule of thumb I believe the above is accurate.
      • geddon, on 04/09/2008, -0/+2So goes the Death of the Middle Class.
    • dupswapdrop, on 04/09/2008, -0/+3Jobs will come back when we stop using tax dollars to fund the shipping of products from china to the USA.
  • delmar14, on 04/09/2008, -4/+17The era of cheap Chinese labor may be coming to an end, but there are plenty of other underdeveloped countries out there to buy lead-tainted toys for the children of tomorrow.
    • Hangly, on 04/09/2008, -6/+5Make stuff in Cambodia. Seriously. In all of Asia they have the best human rights, safety, and labor rights record.
      Paying a living wage makes them a bit less competitive though, so they're not the cheapest.
      • Hangly, on 04/09/2008, -4/+2Why would anyone digg that down? It's true. This American Life did a whole show on it.
  • makkaveli19, on 04/09/2008, -2/+12*looks at everything in room* nope, not gonna happen.
    in a couple of years even pornstars will be outsourced to china.
  • Rotzooi, on 04/09/2008, -3/+20"CAN'T EDIT THAT COMMENT. IT DOESN'T EXIST. RELOAD THE PAGE AND TRY AGAIN."
    aaargrghhh
    • SpaceMonkeyZero, on 04/09/2008, -0/+3There was a problem completing your request. Please reload the page and try again.
    • ScienceDoc, on 04/09/2008, -0/+1Does anybody know what is up with all the Digg problems? It used to work great.
  • BrandonB1218, on 04/09/2008, -9/+1What's the big deal exactly? What if a price increase not only allows China to grow (is that a good thing? =|) but also gives Americans higher quality products? Just speculation, it's 5:28 and I haven't slept yet.
    • SpaceMonkeyZero, on 04/09/2008, -1/+6China and High Quality don't go together...
    • Gemfinder, on 04/09/2008, -0/+1Because if it's down to "pay Chinese companies their inflated prices and get poor-quality junk" and "pay American producers their inflated prices but get quality stuff and keep our dollars at home," I'd rather see the dollars stay at home. And talk directly to the producer.
      Nike is based in my state and if they brought their manufacturing facilities here to Oregon, they'd single-handedly slash the unemployment rate by at least half.
  • Ragarnok, on 04/09/2008, -9/+10Will the U.S. stop making piss poor products just to increase profit margin too??? (i.e. the 300$ Rock band instruments for Europe)
    • lajaw, on 04/09/2008, -1/+4What are you referring too? I see very few USA made poducts on the shelves.
    • ChildeRoland420, on 04/09/2008, -0/+4Aren't the Rock Band instruments made in China?
  • gossipninja, on 04/09/2008, -2/+5i am amazed it took this long, couple that with the avg us citizen having lost so much buying power it will really screw things up. And to think I just read a story about the end of the world (economic or social breakdown)
    • bfdonnelly, on 04/09/2008, -1/+1Yes. it's not going to be pretty. The Long Emergency may lead to a die-off. We're looking at a 50% reduction in agricultural capacity coupled with hyperinflation caused by rising transportation costs. Plus, you know, people freezing to death in the cold. We can sustainably support about 130 million people in the US at a 1920s standard of living.
  • kaffein, on 04/09/2008, -1/+14So instead of enjoying the low low everyday prices for shoddy goods, we will pay the high high everyday prices for shoddy goods.

    Hey I guess this will finally get people to stop buying Chinese products... but of course prices for everything will rise. :|
    • Waterrat, on 04/09/2008, -0/+1 That's right,so compaired to everything else,they will still look cheap.
  • summerpuente, on 04/09/2008, -7/+9You've got to be kidding me: "A store manager at a young women's clothing store in Boston tells me the prices of some camisoles are rising."

    SOME stores, and SOME factories aren't gonna change anything huge yet. That author is making some pretty big claims here, a few factories charging more... then leaping to 'The Last Days of Cheap Chinese'?

    I don't think so.
    • BrandonB1218, on 04/09/2008, -6/+2Why are you digging him down? Makes since doesn't it?
    • zetsurin, on 04/09/2008, -1/+7And furthermore, this only means the price to make a Nike runner will rise 30% from $1.00 to $1.30. Of course the sale price will also rise 30% to $130.
    • Aroundtheworls, on 04/09/2008, -0/+3I work in the industry and I can tell you that the article is spot-on. The rumblings haven't been felt yet but the writing is on the wall- by this Christmas the talk is going to be the rapidly rising costs of everything from flip-flops to DVD players. Costs are rising in China at such a rate that manufacturers have no choice but to pass along increases to customers even if it means possibly losing orders.

      This kick of inflation won't do the suffering US economy much good.
  • shig, on 04/09/2008, -0/+6Is it because the products are being 'Made in America'? That would be a blessing.
  • crowbarred, on 04/09/2008, -6/+1Now that New Zealand has scored a Free Trade Agreement with the Chinese ...... we will be hoping bloody for even cheaper kamakuzi products!
    • zetsurin, on 04/09/2008, -1/+4Idiot, Kamikaze is a JAPANESE word! You know, like a completely different country to China. And wow, China gets a lot of milk now.
  • smacksaw, on 04/09/2008, -1/+10There's a lot of interesting reasons as to why we would purposely devalue the US dollar, but I'll use the example in the article, the inflation of the renminbi. We ask China to quit devaluing it and pegging it to the dollar. They say no. They hold our bonds. We tank the dollar, killing two birds with one stone. Now the renminbi is rising. Hmm...and their US debt they hold is now worth even less.

    All of that end up protecting manufacturing at-home and making us a more competitive exporter. Now we just need to quit borrowing from China and actually make some good out of this weak dollar. Like making and selling stuff.

    The end of cheap Chinese products? How about the end of cheap Chinese credit while we're at it?
    • Hangly, on 04/09/2008, -1/+4We asked them to unpeg the renminbi and they said YES. About two years ago. That's why the renminbi is rising.
      Also, FYI, devaluing their dollar reserves won't exactly break them financially. China is well-diversified.
      • klco, on 04/09/2008, -0/+1No, but given the amount of debt the US has it will sure as hell help us on that front... assuming that we don't trigger a full out selloff of dollars...
    • BESTenemy, on 04/09/2008, -0/+1Another reason our central bank and the government are purposely devaluing the dollar is to deal with the debt. Inflation makes it easier to repay dollar denominated debt... unfortunately very limited amount of ours can be classified as such. As much as I would like to believe in everything going according to some evil plan, I think even the architects of the looming economic crisis aren't quite anticipating everything that's in store.

      By the way, China just established a direct trade link with New Zeland, accroding to an article 2 days ago. What this one is failing to mention is that the event was a trigger for elimination of $200 billion of mutual dollar reserves by those countries. This article tries to give a detached explanation to effects of something that was barely publicized.

      Another thing to anticipate is another half a base point FED cut announcement in about a week. They're keeping track of runaway inflation, trying to equilize pressure by increasing domestic inflation.

      Things aren't looking good.
  • JoeRockEHF, on 04/09/2008, -3/+27Here's a concept...let's start making our own stuff.
    • Aroundtheworls, on 04/09/2008, -1/+4Problem is no one is willing to buy it if it costs 30-50% more than the imported stuff. It's like with 'green' product. Everyone says it's a good idea but when it comes to buying time the cheaper item winds up in the shopping basket.
    • scamper22, on 04/09/2008, -1/+4yeah, I'm no economist, but no one really knows the unintended consequences.
      We may gain some manufacturing jobs. What about those retail jobs that may be affected by less volume? Or less advertising jobs?

      Our whole western way of life is based upon cheap yellow/brown people. I'm anxious to see what life is like without them
      We depend on them to keep our good cheap.
      We depend on them coming to our countries, which drives up demand and house prices (ever ponder what happens when our population starts declining like germany or Italy or Japan...house prices?)
      We depend on them to do all the work from janitors to fast food...
      We depend on them to keep our populations stable so we can sustain our pension system.

      hmm...of course I'm no economist, but the next 30 years are going to be interesting.

    • Gemfinder, on 04/09/2008, -0/+1I regret that I have but one Digg to give you.
      Fact is, if it's coming down to paying for homefront or paying for imported junk, that's pirated from homefront goods in many cases, people are going to keep it in the house. Not to mention a drop in the unemployment rate.
  • kjd84, on 04/09/2008, -0/+7Hopefully it will mean that Manufacturing in US and AU is more viable which would help both economies!!
    • 1randomguyO8, on 04/09/2008, -2/+1We already got a skills shortage her in Australia and why would want you want to work in a factory making 10,000 lighters a week when you could outsource that to China pay them nothing then sell it 20 times its value and profit working in a cushy office job? Globalisation for the win.
  • protodon, on 04/09/2008, -3/+15I would gladly pay a few bucks more for an American made product over a Chinese made one. The problem is finding any American made products, especially ones that have moving parts.
    • csw1342, on 04/09/2008, -1/+2Or that will last more than 150,000 miles.
      • SpaceMonkeyZero, on 04/09/2008, -1/+3American pickup trucks tend to last a very long time. Cars not so much.
    • Aroundtheworls, on 04/09/2008, -1/+4How much more would you pay if the item was *exactly* the same as what's imported, just for the 'Made in America' label? The unfortunate truth is that the cost increase to buy domestic in many cases is huge and consumers are just not willing to pay. If they were then there would be more product in stores for you to buy. Believe me, people have tried it and the stuff collects dust as the cheaper imported items sell.
  • Jsitar, on 04/09/2008, -1/+3It will be even more of outsourcing in countries with cheap labor in the future.
  • daxsymbiont, on 04/09/2008, -4/+6most of the talk about chinese products is incorrect since it's usually based on bigotry against 'teh evil chinese' and politically heated against china.

    for example, amazingly high quality Japanese laptops are made ..in China.

    Few care to bother where most Japanese companies make their 'amazing' quality laptops.
  • jajive, on 04/09/2008, -2/+8STOP BUYING FROM CHINA... !!

    Watch the television series on Discovery about the LA shipping port......thousands and thousands of shipping containers arrive from China every day packed with goods...and the US ships back thousands and thousands of shipping containers with AIR .....
    • mdcarso, on 04/09/2008, -0/+11We're selling off our air? Oh *****!
    • 1randomguyO8, on 04/09/2008, -0/+1Yeah I saw a doco about that aswell(not sure if it was the same one). But they would send them back with scrap paper reprocess them and send them back to the states lol Dont doesnt make sense but profit = profit.
  • josabz2, on 04/09/2008, -2/+4its not just products, northern American companies get/outsource services from the east, Asia in particular.
    so be it products or services, uncle Sam is just the consumer buying stuff since day 1.
    thats why they need to invade something, else they wont be no consumer no more.
  • mahler, on 04/09/2008, -0/+8That may not be a realy bad thing: http://www.storyofstuff.com
  • josabz2, on 04/09/2008, -2/+2this thread wont be accessed from china
    • Hangly, on 04/09/2008, -2/+5I'm accessing it just fine thanks.
    • josabz2, on 04/09/2008, -0/+2good! where's the torch?
    • Aroundtheworls, on 04/09/2008, -0/+3Works ok from Guanzhou. Wikipedia is still banned, though dammit.
  • lajaw, on 04/09/2008, -2/+5"increasingly aware of their rights to a legal wage, health insurance" - since when does a communist dictatorship afford their subjects any rights? People keep forgetting that China is Communist. I thought we hated communists. I do. Do you?
    • josabz2, on 04/09/2008, -1/+2government: communist
      economy: capitalist
    • Hangly, on 04/09/2008, -2/+5Chinese workers in general have more labor rights than you do. For one, it is damn near impossible to get fired, and even if you do the law says you get two months severance.
      And yes, people take it seriously. An American manager at my company (who is ignorant of Chinese law) fired a woman recently on a whim. Now there's a lawsuit and all kinds of ***** going on.

      Chinese workers also pay about a third of the taxes you do, assuming you're American.

      It's not exactly paradise, but it ain't no hellhole either. Unless you're Tibetan.
      • 1randomguyO8, on 04/09/2008, -1/+2Yeah, that how it is in a country as far to the right as the US even in Australia it is very hard to get fired(assuming to have a full-time perm. position).
      • lajaw, on 04/09/2008, -5/+3you don't have a right to a job. That is pure socialist B.S. Where in the Constitution of the USA does it say you have a "right" to a job? What of the owners of the business you work for? Why don't they have the right to terminate your employment at any time? We in this country have socialism intertwined in all of our laws since the 1860's. And it's getting worse.
        • thebaron2, on 04/09/2008, -1/+4I'm pretty sure that China doesn't abide by the United States Constitution.
          • lajaw, on 04/09/2008, -4/+2I was replying to "Hangly" who seems to think that we in the USA have a right to a job and can't be fired.
          • Hangly, on 04/09/2008, -0/+3I never said anything of the kind.
          • lajaw, on 04/09/2008, -0/+1@Hangby You said that they had "more " rights than us. You think that we should have a right to a job. You're a socialist aren't you?
          • Hangly, on 04/10/2008, -0/+1I'm a libertarian.
          • lajaw, on 04/10/2008, -0/+1Hangby, you sure love the communists Chinese though, don't you. Why don't you become one of their citizens. I'm sure they would love to have you there. Libertarian? The way you talk about the Chinese, you sure sound like you have some very Left leaning ideals.
    • huckabee, on 04/09/2008, -1/+2Communism isn't necessarily equal to dictatorship. I know it'll be a waste of my time to try to explain that to you, though, seeing as you been drinking the "pro USA, anti everybody else" Kool-Aid for too long.
      • lajaw, on 04/09/2008, -0/+1Show me one incidence of a communist regime that is not a de facto dictatorship. In theory, communism is like your neo-con/democrat ideals, but in fact they are dictatorships either by one or a group.
  • Hangly, on 04/09/2008, -5/+4The Chinese will probably do exactly what the Japanese did in the 80's when the Yen was expensive. Buy everything. That's when Sony bought Columbia pictures, etc etc and so forth.
    I get paid in renminbi, so I'm pretty happy. Y'all should come on over, there are jobs here.
    • supermanred, on 04/09/2008, -0/+2There's jobs here too and the signs are in English.
    • silviumc, on 04/09/2008, -1/+1No I won't come to China. It's communist. I've lived enough in a communist country, so no, thanks. Not being free suck ass, you know.
  • zetsurin, on 04/09/2008, -1/+6Free America!!
  • supermanred, on 04/09/2008, -2/+2Good. Let China make some money and at the same time that spatula holding your hamburger you took a long time to barbeque to perfection doesn't fall apart on the way to the plate.
  • technobeast, on 04/09/2008, -0/+0May be applicable for US, but it sounds hard to Europe, esp. Central and Eastern....
  • dalexandruz, on 04/09/2008, -3/+2In America you have the government taxing the hell out of corporations, companies, small business and on top of that you have the hungry unions asking for too much. In the past, at ford, one union member cost more than one produced car.
    • SpaceMonkeyZero, on 04/09/2008, -0/+1In the past?

      UAW workers start at about 3 times the cost of their average car.
      • huckabee, on 04/09/2008, -0/+2But they make more than one car every year, don't they?
  • BobScratchit, on 04/09/2008, -1/+0Paying more than we have in the past for goods and services? I've never heard of that before. Lies, all lies.
  • Hillbert, on 04/09/2008, -0/+1Even with the increases, it is still cheap to outsource to China. Maybe in due time US companies will have to rethink if the profit margin is enough to stay in business with China so faithfully like we have. Doubt prices are high enough yet, one can hope though, for the future.
    • SpaceMonkeyZero, on 04/09/2008, -0/+2iPods would only cost $30 more if they were made in the U.S. instead of China. Apple is greedy, even though people would buy them for $30 more. Labor is a small portion of cost. Of course with oil getting more expensive, shipping across an ocean will start to make it almost impossible to NOT bring manufacturing back to the U.S.
      • mjw2025, on 04/09/2008, -1/+0If labor was a small portion of the cost why do you think products being manufactured overseas?
        • SpaceMonkeyZero, on 04/11/2008, -0/+1Because apple wants that extra $30 per unit per million sold...
  • AsylumAleikum, on 04/09/2008, -1/+3Yawn. If the price of China-made junk goes up, we will buy elsewhere, or stop buying.
    • ravage86, on 04/09/2008, -4/+1And when China realizes they've been trading goods for paper? They'll demand we give them the gold its supposed to represent, and we don't have it. China, quite literally, owns us.
      • saisumimen, on 04/09/2008, -0/+1The gold standard was abolished by Nixon.
        • ravage86, on 04/09/2008, -2/+1That just means the citizens can't exchange money for gold. Our currency has to mean something to foreign governments or trade is impossible.
          • SpaceMonkeyZero, on 04/11/2008, -0/+2NO country of any economic power uses a gold standard. Get over it.
  • 11b1p, on 04/09/2008, -0/+8The sad fact is we don't NEED most of the products china sells. What we buy from them are disposable appliances. do you really NEED a salad shooter?
    • Waterrat, on 04/09/2008, -0/+3 So true,and I neither need or want a salid shooter.
      • SpaceMonkeyZero, on 04/11/2008, -0/+3You say that now... But just wait til a gang of Romaine Lettuce kicks down your door at 9PM...
  • portwojc, on 04/09/2008, -0/+1How about instead the world just says the free ride for China on setting the value of their currency is over.
  • elfster, on 04/09/2008, -0/+6It isn't going to happen, but has already been happening for years. Many well known clothing companies have been importing cheap, poorly made garments and shoes. And, charging the high end price they got for the quality well made garments that use to be made in the USA, Spain, Italy, and England.

    Clark shoes: Same high end price tag but the leather quality and stitching pales in comparison to what the name Clark use to stand for before they starting making them in China.

    Calvin Klein garments and texiles are nothing like what they use to be too. Same high end price that one would eagerly pay the price for since it stood for quality. Now you get poorly made junk that falls apart in the washer the first time you launder it.

    And, these are but a sampling of the goods we're paying a high price tag for that are made in China. And, these goods no longer stand for quality because of the poor craftmanship.

    • SpaceMonkeyZero, on 04/11/2008, -0/+2My wife has 2 pair of Diesel sneakers that she paid way too much for (lol women and shoes!). The first pair she bought many many many years ago are still in great shape despite the wear and tear she's put on them. The pair she bought 2 years ago? Fell apart a few months ago with even less use. One was made in Italy (IIRC), and the other in China. Guess which. Adjusted for inflation the prices were exactly the same.
  • p51d007, on 04/09/2008, -1/+3Good! If they go up in price, and the quality doesn't go up as well, perhaps some of these manufacturing jobs will come back to the USA.
  • dupswapdrop, on 04/09/2008, -0/+4Who's next on the great exploit the worlds poor people for a few dollars more for our under worked over paid CEO's? And we wonder why the rest of the world hates us so.
  • pathouston22, on 04/09/2008, -2/+0What about Africa? Plenty of starving folks there who would gladly work for 5 cents a hour.

    They get 5 cents a hour, I get cheap shoes. Sounds like a fair trade!
    • monkeyrun, on 04/09/2008, -0/+2The only problem is the part of the country where people are willing to work for 5 cents an hour doesn't even have clean water yet.
    • dupswapdrop, on 04/09/2008, -0/+2Yes but if you want them to work you need to feed them, and that's going to cost more than five cents an hour.
  • monkeyrun, on 04/09/2008, -0/+2The thing is, this time the inflation is global.

    So China will still be the cheapest, but less cheap than before.
  • liuite, on 04/09/2008, -1/+2cheap chinese labor has subsidized the lifestyle in the west...but there are plenty of workers around the world yet to be exploited. I predict as the cost of transportation rises, US will be looking at buying more goods from Mexico via Nafta superhighway
    • elfster, on 04/09/2008, -0/+1The US consumers will be more willing to import from Mexico too, since it is our neighbor. And, manufacturing jobs in Mexico= improve standard of living for Mexicans as a whole. Increase Mexico's standard of living through jobs and they'll stop coming across the border illegally

      Never thought the time would come that I'd be thrilled to read Hencho en Mexico. But, I am for Mexico has better quality assurance standards in place versus China.

      When it reads made in China these days, you're taking your life and health into your hands.

      Lead contaminated toys

      Toys with components of GHB in them, the date rape drug

      Deadly animal/pet food.

      Recall of ceramic dishes due to high lead content. etc, etc, etc, etc
  • DestroyFascism, on 04/09/2008, -0/+4Most "cheap stuff" from china costs the same if made locally when you factor in time for returning defective items and the fuel they use as well as lifespan. Work it out~ 1 heater for a small room then $50. Now $25....
    $50 dollar one lasts 20 years. $25 dollar one lasts 5 and only if it actually works. Defective products are usually one on five so add fuel and time $PH on top of that.
    Does the $25 China made heater still sound good? Only if you have a major stake in shares!
  • DFrag, on 04/09/2008, -0/+3It has to do with the dollar being devalued.
    Mission Accomplished!
  • amoore260, on 04/09/2008, -0/+3


    Foreign trade angst
    By Walter Williams



    http://www.JewishWorldReview.com | Patrick Buchanan's recent syndicated column titled "New Deal for U.S. Manufacturers" stokes the fires of misunderstanding and panic. Mr. Buchanan, my longtime friend, is right about a lot of things, but he's wrong about trade.


    First, he laments, "Europeans, Japanese, Canadians and Chinese sell us so much more than they buy from us, because they have rigged the rules of world trade." But so what? I buy more from my grocer than he buys from me. It wouldn't make a difference if I lived 2 feet south of the U.S.-Canadian border and my grocer lived 2 feet north of it.


    Like many, Buchanan worries about our foreign trade deficit, pointing out that it's reaching an annual rate of $816 billion, and that means "dependency on foreigners." Actually, the foreign dependency is a two-way street. I'll explain it, starting with the alleged trade deficit I run with my grocer.


    When I purchase $100 worth of groceries, my goods account (groceries) rises by $100, but my capital account (money) falls by $100. That means there's really a balance in my trade account. By the same token, my grocer's goods account (groceries) falls by $100 but his capital account (money) rises by $100, also a balance in his trade account.


    Mr. Buchanan writes, "Imports surged to $188 billion for the month [of July], as our dependency on foreigners for the vital necessities of our national life ever deepens." That means we imported $188 billion worth of goods. Do foreigners keep all those dollars they earned under a mattress? They are not that stupid. They use those dollars to import capital goods such as U.S. stocks, bonds and U.S. Treasury notes.


    They might use some of it to build factories in the U.S. such as Honda, Novartis and Samsung. The dollar amount of those purchases is going to equalize the value of what we import. We sport a huge surplus in our capital account with foreigners. As such, they are dependent on us for a safe and profitable place to invest their earnings. That dependency contributes to our economic growth.


    Then there's Buchanan's worry about U.S. manufacturing job loss. U.S. farming has a similar history. Farm employment peaked between 1840 and 1870. In 1900, 40 percent of American workers were employed in farming; today, it's less than two percent. Technological advances made that possible. U.S. manufacturing employment reached its peak in 1950 and has been in decline ever since.


    This has more to do with technological innovation than outsourcing. It's a worldwide phenomenon. Since 2000, China has lost 4.5 million manufacturing jobs compared to the loss of 3.1 million in the U.S. Nine of the top 10 manufacturing countries, who produce 75 percent of the world's manufacturing output (the U.S., Japan, Germany, China, Britain, France, Italy, Korea, Canada, and Mexico), have lost manufacturing jobs, Italy being the exception. Because of technological progress, manufacturing output has risen while manufacturing employment has fallen.


    I'm one of those whom Pat calls "robotic free-traders." That might be another label for those of us who support peaceable, voluntary exchange, and I plead guilty. Buchanan, like so many others, points to the government subsidies and tariff protections given to businesses in other countries, a practice from which we can't plead complete innocence. Protectionists call for "free trade but fair trade." They call for a "level playing field."


    In effect, they're saying that if other governments rip off their citizens with business subsidies and import duties, forcing them to pay higher prices, our government should retaliate by using the same tools to rip off its citizens.


    The next time I see Pat, I might ask him what he would do if we both were at sea in a rowboat and I shot a hole in my end of the boat. Would he retaliate by shooting a hole in his end?
    • caponumen, on 04/09/2008, -0/+1Free trade at any cost is a fools game.
  • stix213, on 04/09/2008, -0/+4This really can only be a good thing.

    Will slow the tide of US jobs shipped over seas
    Will improve the plight of the poor Chinese workers
    Will allow smaller stores to better compete with stores like Wal-mart
    • ScienceDoc, on 04/09/2008, -1/+2The only problem is, it may be a little too late.
      • stix213, on 04/10/2008, -0/+1Well, that is what people said during the great depression...
  • TargetDog, on 04/09/2008, -0/+5It's time to dump your Wal-Mart stock.
  • caponumen, on 04/09/2008, -0/+2Damn, Slate is on the ball yet again!
    Yep, it's back to the "dirt mall" days of high priced junk.
  • jyac, on 04/09/2008, -1/+0you get what u paid for, you can buy a $5 pair sneakers or a $150 one, all made in china. there is no way the factories will move back to the states. if the labor in china is getting to high, there always cheaper labor in some where else like south america, africa, india...
  • s32843, on 04/09/2008, -1/+1It's funny, really. In 1980s, many american politicians and scholars went to china and told chinese that free trade would be great for china. at that time many chinese strongly opposed it and us gov strongly pressed chinese gov to do it.
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