It is true that New Balance still makes shoes in the US and UK, but everybody knows that sneakers are made in China right? Well, examine your hangtag a little closer and you might be surprised to learn that Indonesia, Bangladesh, Korea, Thailand and Vietnam are now in the shoe game. But China is still where the action is, reportedly producing around 87% of all sneakers sold in the US. That factoid alone is problematic for about, oh, say... 1.5 billion reasons!
China’s rapidly emerging middle class and their appetite for western-style luxury is also warping its traditional role as an exporter. Affluenza has quickly spread through Chinese families, who are responding by hoovering up the supply of goods normally destined for the First World. Wage inflation is also rampant, with Chinese salaries up by an astonishing average of 22% in 2010.
Compounding that incredible vertical leap, the Chinese government has been manipulating the Renminbi (RMB) currency, artificially pegging the value way below what it’s theoretically worth, to a point where factory owners feel like they’re being roughly bent over a barrel of Tsing Tao without lubrication. It’s also making many of them think of packing up and heading for Thailand to sit on a beach with a lady boy and drink Sang Tip til things get better. That’s because, although the US dollar and Euro have crashed, their value is still fixed in terms of what they are worth in China, less the effects of wage inflation, material shortages and so on and so on.
Rest assured, this is one of the main reasons sneakers are about to cost you more.
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