Is Made in China Pricing Itself Out of the Market? – Mark Kleinman

Few experiences capture the essence of China’s rise as an industrial powerhouse as vividly as a journey into one of the vast factory towns of the Pearl River Delta. The chemical fumes and roar of machinery are a reminder that like almost nowhere else in the world, southern China has become the focal point on the compass of global manufacturing. From Telegraph:

In recent years, many Chinese towns have become specialist production lines for dirt-cheap Western consumer goods. In Foshan, for example, the factories churn out electrical products and toys, while Wenzhou has a virtual monopoly on the production of cigarette lighters. But while the exports vary, all of these places near mainland China’s border with Hong Kong have also been exporting something less tangible to the world’s consumer markets: deflation…

True, Chinese exports are still rising, fuelling its massive trade surplus. Many multinationals are continuing to outsource incremental production demand to China. Last month, a survey by Deloitte found that more than two-thirds of manufacturers planned to establish or increase production in China. [Full Text]

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