• Posted on Tuesday, August 26, 2008
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As costs climb in China, manufacturers look elsewhere

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By Rick Montgomery | Kansas City Star

If Americans watching the Beijing Games were stunned by China's changing economy, wait until they see price tags on Chinese-made goods this Christmas and beyond.

What's bad news for consumers may be good news, experts say, for humanity: China is losing its distinction as the world champion of cheap manufacturing.

With pressures building against sweatshops and pollution in China, however, "Indonesia and Vietnam are just waiting to take their turns," said Chris Kuehl of the Kansas City business consultant Armada Corporate Intelligence.

Consider the portable, 1,500-watt SteamMax Cleaner sold by a local outfit, Top Innovations, though made in China.

A tangled Bird's Nest of factors — from labor reforms to shipping costs to the slashing of subsidies for exporters — has driven up the cost of making the $159 SteamMax and Top’s other household products by nearly 30 percent in two years.

"Until this year we’ve been able to absorb a lot of the increases" and kept pricing competitive, said company executive Benny Lee. "But you can’t absorb 30 percent."

Read the complete story at kansascity.com

ECONOMY IN TURMOIL

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Read McClatchy coverage of the economic pain Americans around the country are feeling, from Florida to California to Alaska.

ECONOMY QUESTIONS & ANSWERS

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McClatchy correspondents Kevin G. Hall (left) and Tony Pugh are available to answer your questions about the economic meltdown at home and abroad, and what's in store for ordinary Americans.

Q&A: THE HOUSING CRISIS

Mark Zandi, the chief economist for Moody's Economy.com, is took questions from McClatchy readers about the nation's deep housing crisis. His book, "Financial Shock," offers a 360-degree look at what caused the crisis, what mistakes were made and who made them. It offers a way forward to prevent future crises.

Q&A: TERMINAL CHAOS

U.S. air travel these days is about as fun as a trip to the dentist. Departure delays are rampant, bags often miss the flight you've caught and rising jet fuel prices have major airlines charging to check a bag. In his new book "Terminal Chaos," George Donohue, a professor and former high-level Federal Aviation Administration official, explains why our system of air travel is broken and what can be done to fix it. Read the responses.

Q&A: THE THREE TRILLION DOLLAR WAR

For two weeks, Nobel Prize-winning economist Joseph Stiglitz and Harvard professor Linda Bilmes, authors of "The Three Trillion Dollar War," fielded questions about the cost of the Iraq war and its impact on the U.S. economy. They're not taking new questions, but they're still posting answers to ones they've already received. Read their responses.