Rising labor cost in China will probably result in redeployment of manufacturing and industrial enterprises elsewhere but this won't happen overnight , and in some cases this will mean moving to another part of China where labor will still be cheaper then it is in popular Quandong and Shanghai areas .

Some companies will think twice about moving out of China considering the incentive to be present in a market with such high growth expectation , along with the problems that might be expected if trading rules get stiffer as this crisis unfold . The G20 meeting underlined some of the problems that can be expected if this crisis worsen . The US wanted to reopen DOA's agreement wich spurred China's anger, it shows how fragile the WTO agreement is fragile following the present crisis .

When the G20 met in London , following the near collapse of the financial system , it was relatively easy to agree unanymously on the need to repair the damage , and solutions to do so were few , so they all sticked together and used the same tools ( Low interest rates and QE ) but as we now look for solutions to come out of it and as most countries face huge deficit and debt burden , along with high unemployment , solutions are even fewer and most of all appear different to some players .

Now the world faces the real problem of this crisis as unity shatters and the incentive to go different ways is luring them away from each others . The first victim of disunity might well be the trading rules agreed under booming growth . Now everyone wants to preserve it's peace of pie and in doing so the pie may well be reduce to a meager piece of bread .

Before multinational businesse start moving their assets around they will need to know how those rules will be affected and it will impact their business , The cost of moving away from one place to another has to be put in perspective with future advantages and they will also have to consider the infrastructure in places where they want to move .

The logistic implied is huge for some companies and business patners along with political affiliations take time to build but can be easily destroyed , shattering years of hard work .

Decisions taken at the national level both in the US and in the euro zone as well as how international trading rules will change will impact companies decisions when the time comes to decide or not to move out of China .

Inflation is another factor that will impact ennterprises differently depending on the products or services they offer , for some the rising cost of labor will be huge for others it might be meaningless . To some enterprises higher labor revenues will mean higher consumption of their products . To some others currency changes or fiscal laws will have more impact then the cost of labor and they will have to make decisions based on those factors before any others .

Before any relevant changes in the structure and location of enterprises located in China can be evaluated it could take years , and while some may leave others may establish their business there . China will also do it's part to protect it's interest either by giving new incentive to businesses so they will remain in China , or by increasing trade barriers for those who leave depending on how the actual trade world agreements are affected by decisions abroad .

Over the last two years we already witnessed an exchange of harsh words regarding trading rules and markets , all sides are asking the others fo more open markets but few if any are offering to open their own , it's a sign of the time and also an advance warning on how it could change .

Every country has to protect the economic interest of it's population along with their enterprises ( or is it the other way around ? ) but in doing so they have to consider the broader picture , although that pictures blurs away in time of election ,and that's where the danger lies .