Monday, July 7, 2008

Oil price shock means China is at risk of blowing up

China's factories "were not built with current energy levels in mind", said Mr Jen. The outcome will be "non-linear". My translation: China is at risk of blowing up.

Any low-tech product shipped in bulk - furniture, say, or shoes - is facing the ever-rising tariff of high freight costs. The Asian outsourcing game is over, says CIBC World Markets. "It's not just about labour costs any more: distance costs money," says chief economist Jeff Rubin.

Posted by big chris @ 04:20 AM (451 views)
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One thought on “Oil price shock means China is at risk of blowing up

  • Rental John says:

    Very good article…….the naive market controls within China have been blown apart by external price pressures (commodities, oil, transport), but also they have shot themselves in the foot with employment regulation which has created wage inflation of 30%~50% – though salaries are still low by western standards, their business model can’t sustain this.

    Is globalisation dead?

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