Defensive Tactics in China

March 2011
Treasury & Risk;Mar2011, p36
The article reports on the decision of U.S. companies buying products in China for export to consider strategic shifts due to higher costs and economic and monetary factors. Moody's Analytics reports that wage increases in China ranged from 10 percent to 15 percent since 2009. One of the longer-term trends that cannot be hedged with forward contracts and other financial instruments is rising inflation. Virendra Singh of Moody's Analytics says the majority will rely on the bargaining power of U.S. firms and how much they can squeeze subcontractors.


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