If you haven't figured this out already, let me break the bad news to you: outsourcing from China is going to cost you more this year than it did last year. If your business relies on outsourcing from China, you should plan on that extra expense.

Why? China Business Success Stories pointed out at least four reasons last month. The biggest factors are increased labor costs and changes in China's tax laws.

China has changed the formula that used to refund the value added tax (VAT, basically a sales tax) on items manufactured for export. That will increase the cost of items exported from China. It's part of a policy to reduce exports, with the goal of reducing the trade deficit.


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