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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (57637)	10/5/2006 11:43:56 AM
From: RealMuLan	Respond to of 116555

Although China does not control the inflation in the US, but the cheap imports from China does help a lot to alleviate the inflation pressure in the US. But the trend is changing slowly: -- labor cost is going higher slowly although many sweatshops now are moving from China to other countries; -- environmental regulation is getting enforced somewhat (more that 9000 sweatshops were forced to close down in Guangdong alone this year due to heavy pollution); -- 3 out of 4 big State banks have/soon IPOed, which means banks have to curb their bad debt, and cannot keep throwing the money to prop up Chinese companies (plenty of Chinese companies are losing money to export cheap goods to the US); -- soon China will pass the bankruptcy law, which will force thousands of Chinese companies to close down; -- Survey shows many Chinese companies are going to raise price for exporting goods; -- appreciation of RMB; ... All these will sooner or later show up in the US inflation number