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China Exports Inflation to US

Posted Feb 1, 08 1:35 PM CST in US,  Business,  World 

(Newser) – After years of pumping out cheap consumer goods, China is driving up American price tags, the New York Times reports. As costs rise domestically, prices down the supply chain rise at the same time that recession threatens in the US. “China has been the world’s factory,” said one economist. “But its heyday is over. We’re going to see higher prices.”

Chinese export prices rose just 2.4% last year, but that helped raise US inflation 4.1%. Other countries have complained for years about China’s yawning trade surplus, so this year Beijing cut incentives for exporters. Tougher labor laws could also raise prices. In import-dominated sectors like toys, clothing, and footwear, US consumers could see price jumps of up to 10%.
Source: New York Times

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Workers assemble toy cars at the production line of Dongguan Da Lang Wealthwise Plastic Factory in Dongguan, China Tuesday Sept. 4, 2007. (AP Photo/Eugene Hoshiko)   (Associated Press)
A worker checks dancing toy guitars assembled on the production line of Dongguan Da Lang Wealthwise Plastic Factory in Dongguan, China, Tuesday Sept. 4, 2007. (AP Photo/Eugene Hoshiko)   (Associated Press)
Workers assemble toy cars on the production line at Dongguan Da Lang Wealthwise Plastic Factory in Dongguan, China Tuesday Sept. 4, 2007. (AP Photo/Eugene Hoshiko)   (Associated Press)
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