In one of my businesses, I deal with China on an almost daily basis. I'm referring, of course, to the Ball of Whacks which is manufactured in China (but "Designed in California!" as Apple would put it).
I just spent the past week negotiating the BOW prices for 2008. They're higher than I thought they'd be. There are a variety of factors:
- Higher plastic costs
- Higher labor costs (due in part from the Chinese government)
- Higher magnet costs (commodity prices continue to soar)
- Weakness of the dollar
I plan to keep the retail price the same as it has been since 2006, but the cost increase does squeeze our margins.
I share this information with you, because many of our everyday products are imported from China. At some point, businesses will have to pass along these costs to the consumer (especially when their margins are narrow). I wonder what this bodes on the inflation front.
Speaking of Chinese imports, shown above is a cartogram that displays World Container Shipping. Each country is sized according the number of containers that are shipped either in or out of that country.
I wonder what impact rising Chinese prices will have on the world economy. What do you think?