As costs climb in China, manufacturers look elsewhere

Kansas City StarAugust 26, 2008 

If Americans watching the Beijing Games were stunned by China's changing economy, wait until they see price tags on Chinese-made goods this Christmas and beyond.

What's bad news for consumers may be good news, experts say, for humanity: China is losing its distinction as the world champion of cheap manufacturing.

With pressures building against sweatshops and pollution in China, however, "Indonesia and Vietnam are just waiting to take their turns," said Chris Kuehl of the Kansas City business consultant Armada Corporate Intelligence.

Consider the portable, 1,500-watt SteamMax Cleaner sold by a local outfit, Top Innovations, though made in China.

A tangled Bird's Nest of factors — from labor reforms to shipping costs to the slashing of subsidies for exporters — has driven up the cost of making the $159 SteamMax and Top’s other household products by nearly 30 percent in two years.

"Until this year we’ve been able to absorb a lot of the increases" and kept pricing competitive, said company executive Benny Lee. "But you can’t absorb 30 percent."

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