2009-07-12marketskeptics.com

``Higher commodity prices and more expensive financing have increased the cost of Chinese manufacturing operations. In the face of falling global demand, Chinese exporters weren't able to pass on these higher costs, forcing many factories to close down. The big drop in manufacturing activity late last year has been exaggerated by a sharp destocking process, aggravating this supply destruction. The price of goods like clothing and toys has recently risen, showing that supply destruction has reached a point where Chinese exporters can pass their costs on... the next big export from China will be inflation.''


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