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Costs Driving U.S. Manufacturers Out of China

04/29/2008
The American Chamber of Commerce (AmCham) says that China is losing some of its attractiveness to foreign investors as rising costs force some U.S. manufacturing companies to leave the country. According to an AmCham survey, factors with the largest financial impact included price pressures from competition and major customers, rising salaries and wages, changes in raw material prices, tax expenses, and real estate cost inflation. "For manufactures, the seemingly endless supply of low-cost unskilled labor may be approaching its limits," says Norwell Coquillard, chair of AmCham in Shanghai. But AmCham officials say that companies still see China as a strategically important manufacturing base because of its domestic market potential, pointing out that 74 percent of companies reported being either profitable or very profitable in China.

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