Are prices in China really as low as they seem? This is not an easy question to answer. Prices for goods imported from China used to be very competitive but are beginning to look less attractive. Sourcing in China has become more difficult as negotiating with a Chinese supplier for a much lower price is not as easy as it was 10 years ago.

In case you didn’t experience it firsthand, let’s look at some facts dating back to China in the 1990s. In big cities like Guangzhou, the average labor cost for blue-collar workers was no more than $100 per month. Today, wages for equivalent labor have grown to more than $600 per month in the same cities in eastern China. As a consequence of this rising labor cost, pricing for Chinese-made goods is losing its competitive edge when compared to its Asian neighbors. The per-worker cost of wages in Indonesia, for example, averages $160 per month, while Vietnam’s monthly wages average $240.

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