Barboza_As+China_s+Wages+Rise,+Export+Prices+Could+Follow_NYT+6.7.10

Barboza_As+China_s+Wages+Rise,+Export+Prices+Could+Follow_NYT+6.7.10

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As China's Wages Rise, Export Prices Could Follow New York Times, The (NY) - Tuesday, June 8, 2010 Author: DAVID BARBOZA Chen Xiaoduan contributed research. Abstract: Wages in China are predicted to rise as some large companies and local governments raise pay for workers; China recently announced 20 percent increase in monthly wages; salaries in factory region of Southern China are still relatively low at around 75 cents per hour, but economists predict that if China appreciates currency later in year manufacturing costs will rise; analysts say that such changes will eventually translate to higher consumer prices but also create better trade balance in China; photos (M) SHANGHAI -- The cost of doing business in China is going up. Coastal factories are increasing hourly payments to workers. Local governments are raising minimum wage standards. And if China allows its currency, the renminbi, to appreciate against the United States dollar later this year, as many economists are predicting, the relative cost of manufacturing in China will almost certainly rise. The salaries of factory workers in China are still low compared to those in the United States and Europe: the hourly wage in southern China is only about 75 cents an hour. But economists say wage increases here will eventually ripple through the global economy, driving up the prices of goods as diverse as T-shirts, sneakers, computer servers and smartphones. "For a long time, China has been the anchor of global disinflation," said Dong Tao, an economist at Credit Suisse, referring to how the two-decade-long shift to manufacturing in China helped many global companies lower costs and prices. "But this may be the beginning of the end of an era." The shift was illustrated Sunday, when Foxconn Technology, one of the world's largest contract electronics manufacturers and the maker of well-known products that include
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This note was uploaded on 05/04/2011 for the course PUBLIC POL 103 taught by Professor Reich during the Spring '11 term at Berkeley.

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Barboza_As+China_s+Wages+Rise,+Export+Prices+Could+Follow_NYT+6.7.10

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