China is starting to lose its low cost wage advantage. And it is not due to the revaluation of the yuan but rather, increasing inflation within the country. Here are three report that detail the situation:
American Machinist – Survey says China is losing its manufacturing edge
east2point6billion.com – Will China lose its cost advantage to Vietnam, Cambodia and Sri Lanka?
MarketWatch/Caixin Online – China’s factories face big, labor-driven changes
The latter report is notable because Caixin Online is from inside China and has a reasonable record on predicting key trends within the country.Some see the US as beneficiary as cheap labor areas in the South and Southwest open up for “low cost business”.
But that prognosis fails to take into account such developing countries as India, VietNam, Bangladesh and some parts of the Middle East. Jobs in the North America and Europe will be at a premium as long as a handsome ROI can be found by outsourcing.