I don’t see the price of imported Chinese goods going up at all…in fact, cashmere sweaters (imported from China) cost less now that they did 4 years ago. Likewise for electronic goods-the price seems to keep going down. So: are the Chinese prepared to keep ther prices low? Will this prevent any revival of US-based manufacturing?
Good question.
First, for various reasons, the depreciation against the Yuan/ rénmínbì is rather less than against other currencies. Over the last 5 years, the $US has depreciated around 30% against the Euro but only around 10% against the Yuan. Maybe this is partly a reflection of an undervalued Yuan, but let’s not go there at present.
Second, China is experiencing rapid industrialisation. This means great productivity increases as well as mere capital accumulation. It’s not so much that China’s keeping prices low, more that costs are plummeting.
Third, a big proportion of the prices of imported goods doesn’t depend on the price of imports. The price of an imported good on the shelf at your shop depends on what economists (at least of my type) call margins. These are costly things that facilitate sales of goods - like transport, warehousing, insurance, financial services and retailing. To give you a number I’m familiar with, in the Australian Textiles, Clothing and Footwear industry, fully 50% of the price that consumers pay is margins. For small manufactured items in the US, the margin component could well be a fair bit higher. For 50% margins, a 10% increase in the landed, duty paid import price translates into a 5% increase in purchasers’ prices (other things equal).
Fourth, domestic and imported variants of fairly similar goods don’t seem to be perfect substitutes. If it took a fair bit of price difference to win over US customers, its probably going to take a fair bit to lose them.
So, where does that leave US manufacturing? It’s a lessening of import pressure, to be sure, but it’s still very tough times.
You correct. I also suspect that the Chinese are administering the coup de grace to US manufacturing-you cannot buy American made clothing any more here. i guess that’s it-we will be dependent upon China for everyhting. 
Is already has. My company raised USD prices several months ago because of the falling dollar.
Maybe stuff from China doesn’t cost more, but a whole lot of other stuff sure does!
It’s part of the reason Oil is more expensive for us.
Manufacturing has been leaving the United States for the past 30 years. Unemployment, however, has remained steady. One must ask, is manufacturing somehow a more legitimate industry than others?
Also, American Apparel manufactures their clothes in the US.
What is the reason and for who? Oil is getting more expensive simply because worldwide demand is increasing while drilling and refining capacity is not.
Meanwhile, Europeans are taking advantage of our devalued dollar. They fly to our cities to do their Christmas shopping. The money they save pays for their tickets.
Wonderful. My country has become a Cheap Shopping Destination, and visiting Europe is far out of reach of almost everyone here.
Hey man, you can’t claim that Americans have never taken advantage of the same circumstances in other countries.
You practically invented the game.
Two or three generations ago, maybe. That doesn’t help me now.
Would that 'twere so. But it seems that our stringent security measures may be keeping them away:
Sounds like it’s starting:
Wholesale prices, retail sales jump
3.2% in one month? (!) Am I reading that right?
Yup. The article never did mention whether that was the yearly rate or not, did it?
From Forbes:
Just FYI, 3.2 X 12 = 38.4.
I remember 73-74 as a poor college student. Inflationwise, it was not a good time.