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Old 04-17-2008, 07:14 PM   #1 (permalink)
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Is china's economy on a collision course?

Just today i was watching some news channel and of course the big news in china is the human rights issue. But when you think about it, China's economy is based largely on the products they produce for countries such as the us, england, france etc.. The reason we buy from china is of course is because the cheap labor allows companies to have products made a lot cheaper than if they produced it themselves. Now assume condition in china improve, What comes next? workers demand a larger salary for their work. Which in turn factories pass along to the business in america or wherever purchasing the merchandise. For any who dont know, to import goods to america, generally companies are taxed around 17% + They must pay increased shipping charges + the time the product leave the assembly line to the time its on the store shelves is much longer than if it were produces here.

Now considering all of the above, what happens when the Chinese people demand higher pay and it cost us just as much (when you factor in taxes/shipping etc) to produce it in china as it does to produce a product here? Who is going to purchase from china when this happens? How will china sustain itself economically speaking?
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