On CNN today one of the research commentators was mentioning that what costs 34 dollars to make here in the U.S. costs $2 to make in China. He said the reason for this was China's currency manipulation and other reasons. However, I was thinking that even allowing for currency manipulation even if it changed the process to $5 to make it in China or even $10 to make it in China which might bring a currency parity, people would still buy things made in China over things made in the U.S. because it still would cost less than 1/3 of what it would cost to make it in the U.S.
In addition, there are places where labor is even less than China, like Viet Nam, Cambodia, Myanmar (Burma) and many other countries around the world. So, likely even companies in China that want things made cheaper for consumption in China are going to subcontract with those companies in other lower labor cost markets.
Before I heard this I was thinking that maybe having things made in China was maybe $15 dollars compared to $34 dollars here. But realistically under these circumstances the U.S. must find a whole new model to survive in world economic commerce. And the same is true of Europe.
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