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Cost of Manufacturing in China

April 18, 2010

I love Planet Money, NPR’s economics podcasting team. They can make you actually understand what a credit default swap is. And, they make it entertaining. Fun!

This podcast explained exactly how China manipulates their currency, and what that means to everyday Americans, and everyday Chinese. It was fascinating. If you like that kind of stuff, here it is:

http://www.npr.org/blogs/money/2010/03/podcast_why_chinas_central_ban.html

But if you just want the cliff note, the part I found so stunning, it is this. They were talking to a small business owner that manufactures his his product in China. No surprise. We all know much of what we buy is manufactured in China. You don’t have to be an economist to know it must be way cheaper to manufacture in China. What I didn’t know was how much cheaper.

90%. That is stunning. If you were a mattress manufacturer, and could sell a mattress for $1,000, would you pay an American company $500 to produce it, or a Chinese company $50. Duh. I had no idea that it was that much cheaper.

How do we reduce the carbon footprint of global manufacturing when individual business owners are faced with such temptation?

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One comment

  1. They have to be strong and make decisions based on more than just the bottom line.



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