From ArabianMoney.net: A recent report from Credit Suisse has warned that wage inflation in China is going to put pressure on the profit margins of major Western brands dependent on Chinese manufacturing over the next 12 months.Over the past decade Chinese manufacturing salaries have risen from $1,000 to $3,900, according to The Daily Telegraph yesterday. But a series of strikes at key factories have sent wage inflation soaring to 25-30 per cent this year.
The low cost of manufacturing in China has been the secret of low inflation in the West in the 2000s. That deflationary force is gone. This is inflation at a very basic level. Eventually manufacturers will have to pass this higher cost on with higher prices or inflation.
Now we hear the selling of gold by Chinese banks is being liberalized. The Chinese are not immune to inflation either and will want to buy protection in the form of gold, the one currency that cannot be printed...read on
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