That is exactly the issue, and it's already happening. Why Factories Are Leaving China http://www.businessweek.com/magazine/content/10_21/b4179011 http://www.b

That is exactly the issue, and it's already happening. Why Factories Are Leaving China http://www.businessweek.com/magazine/content/10_21/b4179011 http://www.businessweek.com/magazine/content/10_21/b4179011 Fan is expanding his factory in Vietnam, where wages are $100 a month, one-third what he pays in China. Once it becomes too cost-prohibitive to manufacture products in China due to inflation, HP, Samsung, Sony, Dell, Apple,etc. has no choice but to move their operations to Vietnam, India, etc. China's main competitive advantage is being eroded by inflation. They need to move up the supply chain from being a manufacturer to seller/marketer, where they can charge more money based on their brand (Apple/BMW/LV/etc.).