How much longer will China’s export machine - built on selling low cost manufactured products to the rest of the world - continue to grow at double digit rates? In an important article in today’s Sunday Times, Michael Sheridan argues that

“The fabled “China price” of cheap consumer goods has kept global inflation low, undercut workers in every industrialised nation and brought millions of Chinese peasants into a raw capitalist economy. That phase of globalisation may now be coming to an end, economists say. The export machine that powered China’s spectacular growth is slowing as the cost of manufacturing in China and shipping goods to Britain goes up daily.”

Rampant wage inflation, the huge rise in global shipping costs and an appreciating currency - all of these are having an impact on China’s cost competitiveness. The OECD for example is forecasting that the annual growth of Chinese exports will halve in 2008 and 2009.

Here is the rest of the article

My Chinese economy chartroom poster set is now available.

The fifteen charts in Volume 1 of Chinese Economy Chartroom cover the following data series:

China consumer price inflation & economic growth
Reducing absolute poverty - real per capital incomes
China’s investment boom
China consumer price inflation and economic growth
Current account and foreign currency reserves
The challenge of population shift
Cars & mobile phones - the Chinese consumer boom
Shanghai Stock exchange - index
A booming money supply
UK trade balance in goods and services with China
Yuan-Dollar exchange rate and China/US trade
Portrait of a booming economy - indices of output
The shift in textile employment - China & the UK
Cargo handled at Chinese ports
Take off for telecommunications in China

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