Weekend Economists Merry Little Christmas December 23-26, 2011

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60. the cost conundrum for east and west

http://www.nationofchange.org/cost-conundrum-east-and-west-1324823765

Pur­chas­ing de­mand for Chi­nese goods has slowed a tad in the United States as higher man­u­fac­tur­ing and ship­ping costs are prompt­ing US re­tail­ers to turn to cheaper des­ti­na­tions in a bid to crank up profit mar­gins.

Though most of the new or­ders are be­lieved to be flow­ing into emerg­ing economies, many re­tail in­dus­try ex­perts still say that China still has the best brand eq­uity in the US.

"Re­tail ex­ec­u­tives have told me that some low end or­ders are being routed to coun­tries like Viet­nam, In­done­sia and Bangladesh," says Erik Autor, the In­ter­na­tional Trade Coun­sel for the Na­tional Re­tail Fed­er­a­tion (NRF), the world's largest re­tail trade as­so­ci­a­tion. "There might be some em­pir­i­cal data on it but I am yet to see it," he says.

The US Com­merce De­part­ment, the Na­tional As­so­ci­a­tion of Man­u­fac­tur­ers, the US Trade Rep­re­sen­ta­tive and the Toy In­dus­try As­so­ci­a­tion, some of the agen­cies that pro­vide data on the re­tail trade in the US, also did not have any fig­ures to sup­port the claim that man­u­fac­tur­ing is being routed to newer lo­ca­tions.