NYT: Newest Export out of China: Inflation Fears

[DeepModem Mom]

Newest Export Out of China: Inflation Fears

By KEITH BRADSHER

Published: April 16, 2004


....Price increases in raw materials and other business costs in China, a government spokesman said, will probably spill over soon to consumer prices in China and abroad.

"There is a time lag, but it can't be too long, and there is pressure for price rises," said Zheng Jingping, the spokesman for the National Bureau of Statistics, at a news conference in Beijing on Thursday. "If this goes on for a long time, it will cause problems."

Exports from China to the United States last year represented just 1.2 percent of the value of all goods and services produced within the United States. But China has been the lowest-cost provider in many areas. As its prices rise, many other low-income and middle-income countries exporting to the United States, from Eastern Europe to Mexico and Central and South America, will find it easier to raise prices as well.

China's efforts to keep the economy from overheating and igniting inflation have been unfruitful so far. Using a term that Mr. Zheng and other Chinese officials have conspicuously avoided, the state-run New China News Agency on Thursday quoted Morgan Stanley's China economist, Andy Xie, describing the Chinese economy as "a bubble."...


http://www.nytimes.com/2004/04/16/business/worldbusiness/16YUAN.html?hp

[whistle]

1. Let's not forget, China has artificially kept their currency undervalued...

...by some 40%. If they choose to they could let it float in the currency free market and virtually every Wal-Mart in America would suddenly have to raise prices by 40% or more. If they do that this summer, how would that reflect on the Bush economy I wonder?:freak:

[kalian]

2. I was just going to say....

bye-bye Wal-Mart... :evilgrin:

Imagine, Americans are living on the financial edge. Wal-Mart is
the great big "generic store" (throw back to the 70s) where everyone
goes to shop in order to stretch their dollar... Now, Wal-Mart
gets slammed by rising product prices originating from China. Hmmm...
Anybody else see the incoming tidal wave...?