Will China Remain a Low Cost Country in the Next Five Years

The rise of China as a global power is mainly attributed to its growth strategy of exporting to grow. It is the world's largest exporter with USD 1.9 trillion exports in 2011 followed by Germany. china is the preferred destination for my companies around the world not only to import from - owing to its cost advantage-but also to set up manufacturing facilities. However, the major factors that enable China to attain this advantage are showing reversing trend due to a combination of dynamics like increase in wage inflation, appreciation of Chinese Yuan (CNY) against the Dollar (USD), rise of other low cost countries like Mexico, Vietnam, Indonesia, India, Bangladesh etc. This whitepaper tries to analyse whether China's tag as a low cost country will remain the next five to ten years and if not, the impact it would have on various sectors and procurement.