Worldwide Supply Chain Take Note — Costs in China Are Going Up

We may be seeing the beginning of  the end of cheap production in China.  One electronics company, which manufactures well-known products that include Apple iPhones and Dell computer parts, plans to double the salaries of its workers later this year.  Honda Motor Company is doling out raises of 24 to 32 percent at its Southern China plants.  And local governments have stepped up enforcement of labor and environmental regulations, also driving up production costs.  The biggest factor is demographics; China is now experiencing a labor shortage in the big cities along the coast.   Economists say the wage increases will eventually ripple through the global economy, driving up the prices of goods from T-shirts and sneakers to computer servers and smartphones.  The New York Times Jun. 7, 2010