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Companies Brace For End of Cheap Made-in-China Era


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police and factory workers in Dongguan, China

Police guard the gates of a factory in a standoff with workers in Dongguan, China, Friday, in 2008.

Credit: Kin Cheung / AP Photo

Factory workers demanding better wages and working conditions are hastening the eventual end of an era of cheap costs that helped make southern coastal China the world's factory floor. The government, meanwhile, is pushing foreign companies to make investments in areas it believes will create greater wealth for China, like high technology.

A series of strikes over the past two months have been a rude wakeup call for the many foreign companies that depend on China's low costs to compete overseas, from makers of Christmas trees to manufacturers of gadgets like the iPad.

"China is going to go through a very dramatic period. The big companies are starting to exit. We all see the writing on the wall," says Rick Goodwin, a China trade veteran of 22 years, whose company links foreign buyers with Chinese suppliers. "I have 15 major clients. My job is to give the best advice I can give. I tell it like it is. I tell them, put your helmet on, it's going to get ugly."

From The Associated Press
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