Explaining Southern California's economy

Visual Aid: Cheap stuff from China is getting...more...expensive

 

This chart is from a Federal Reserve Bank of New York analysis of why Chinese imports to the U.S. are moving up in price. For some people — those who have issues with the flood of inexpensive Chinese goods that have hit our shores in recent years — this is good news. Stuff made right here at home will now stand a fighting chance!

However, you have to look at the trend more broadly. For one thing, rising import prices mean that Chinese wages are also rising, a generally beneficial thing for a country trying to lift much of its population out of poverty. That's the positive. But there's also a negative, on our side of the equation: The last thing Americans probably need right now is for inexpensive goods they've gotten used to being inexpensive — from clothing to electronics — becoming pricier. This could cause reluctant consumers to become more reluctant. We don't need that, given that a lack of demand is preventing our economy from recovering fast enough. It's also keeping employers from hiring.

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