Made In China Is No Longer Cheap.

In the past, low priced goods were pported from Southeast China to California port, and then sold to Americans eager to buy cheap goods, but this trend is weakening, because the high cost of food, fuel and other raw materials has pushed up domestic prices and increased the prices of their export commodities (the appreciation of the renminbi against the US dollar has made Chinese goods exported to the US "expensive").

As a result, the profit margins of US retailers, such as WAL-MART, which purchase large quantities of "made in China" products, have declined, and they are beginning to search for the next low-cost area worldwide.

"It has always been China's help to lower inflation, and I think this is going to end."

Houseman, an economics professor at MIT, said he had been studying the impact of inflation reflected by WAL-MART.

The wages of Chinese workers are increasing rapidly.

According to research by Morgan and Stanley, inflation in some 50 countries is growing at an annual average of two digits. These countries account for 42% of the world's population.

These factors help explain why the US import price rose to its biggest gain since 1990 in the 3 months ended May.

In May, the cost of imports from China increased by 4.6% over the same period last year, the largest annual growth rate since December 2003.

As a result, $1 can be bought less than last year.

The labor department data show that the purchasing power of US $104.48 is equivalent to US $100 last year.

In 2006~2007, the above purchasing power range was US $2.85.

The link between the United States and China may be the most obvious in large retail chains in the US.

WAL-MART, Taghit and other large stores have significantly increased imports of Chinese goods over the past 10 years, which is one of their most powerful weapons in the price war.

Cohen, vice chairman of the Federal Reserve, said in June 26th that current imports accounted for about 18% of the total U.S. demand, compared with 10% at the end of last century.

This change is entirely due to price impact. According to the analysis of the US Department of commerce data by Sanford Bernstein, the US retailer paid $59.15 per dozen men's shirts in 1997, compared with $42.14 in 2007.

China has become a big exporter, which is the main reason for the decline in US retailers' costs.

But recent data show that commodity prices have risen in stores that have long been advertised at low prices.

Analysts at J.P. Morgan have conducted monthly price surveys on chain stores such as WAL-MART and Taghit.

The results showed that in May 2007, 23 items of WAL-MART were priced at $106.92, the same basket of goods in Taghit was $110.21; in May 2008, the prices of these goods were 108.79 dollars in WAL-MART and 111.93 dollars in Taghit.

A spokesman for Taghit said that clothing and household appliances purchased by Taghit in the second half of this year will continue to rise in price.

"All in all, we will strive to maintain profitability, but ultimately whether we can get what we want depends on how the market responds to price increases."

Retail analyst Warner said retailers are looking for other places to replace China, and in the meantime their profits may be hit by a moderate impact.

In addition to India, the number of potential workers in any country is close to that of China, but India lacks infrastructure and is hard to follow up quickly.

Nevertheless, there are signs that companies are moving at least some manufacturing from China to other places, and Vietnam and Mexico are among the hot spots.

Although the relocation of production sites to locations near home reduces pport costs - this is a key indicator at a record high oil price, but enterprises can not escape inflation by leaving China.

"The pressure on oil and food prices to push up inflation is a global phenomenon that may affect the prices of all goods," said Basque, a professor at University of Missouri at Columbia. "Most stores will have to raise prices to counter rising costs."