It is now well known that the famous - and hitherto unanimously considered cheap - China price is inexorably inching upwards. In fact, everything in China is going up, from yesterday's estimated earthquake death toll to manufacturing costs to wedding costs and of course, inflation. As China gradually moves up the value chain, however, despite the odd snow storm and earthquake, the inevitably rising China price is detrimental to China's status as the best country for low cost sourcing, compared to emerging opportunities offered by countries such as Vietnam, Turkey, India and others in Central and Eastern Europe.

In a survey for the American Chamber of Commerce's annual white paper, more than two-thirds of member companies agreed last month that China was losing its competitive advantage in global markets due to rising costs, Industry Week reported. The top five business challenges in China were listed as human resources constraints, inconsistent regulatory interpretation, unclear regulation, lack of transparency and bureaucracy. Industry Week earlier this month reported on a recent study of foreign manufacturers in China conducted jointly by the American Chamber of Commerce Shanghai and management consulting firm Booz Allen Hamilton, which found that 54% of companies manufacturing products in China agreed that China is losing its competitive edge to other low-cost nations like India and Vietnam, yet 83% intended to maintain their current operations in China despite the rising costs of manufacturing.

While China is supposedly struggling to hold on to its prime position for cheap low cost country sourcing, new importers often do not realize the full impact of hidden costs of customs and shipping until the first order from China is complete. At Smart China Sourcing, Dylan Blankenship outlined what items need to be included to calculate total landed costs, and how to minimize these. A quote from a factory in China is only the beginning of the calculation, and it is important to clarify the exact terms of sale and what charges are the responsibility of each party, factory and buyer. Smaller importers can often pay less by negotiating to ship containers under a bigger importer's existing contract, helping them to meet their shipping quota. Additional costs may accrue, however, from relevant duty costs, courier/postage of original documentation, customs broker coordination fees, and 'last mile' providers that deliver to the final destination.