Image by Fantake via FlickrShaun Rein met over New Year in Beijing many confident officials, but he sees in Forbes at least three concerns for 2011, inflation on number one:
Even though official inflation was 5.1% in November, every day the Chinese feel much more of a squeeze than that number indicates, as prices of cooking oil, eggs and apples have all risen 10% to 20% in the last six months.
Don’t expect inflation to ease anytime soon. Increased costs are systemic and not due to speculators or bad weather. The soaring cost of labor is one cause. Salaries rose 20% this year for companies like Foxconn, the electronics manufacturer that makes most of Apple ( AAPL – news – people )’s products, and at Toyota ( TM – news – people ). Many companies, including Nike ( NKE – news – people ) and Adidas ( ADDDY.PK – news – people ), are already shifting to lower-cost production centers like Indonesia.
More of Shaun Rein worries in Forbes.
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Shaun Rein is a speaker at the China Speakers Bureau: When you need him at your meeting or conference, do get in touch.
