The following is an excerpt from a company newsletter I receive. Change at the margin is what I look for, and there's no more marginal business than making model trains:

2: RISING CURRENCY AND LABOUR COSTS

A bigger issue for us is the decision by the Chinese government to increase the value of the Chinese currency and the decision by the local government in Guangdong province to increase the minimum wage by 21%. Because model railroad projects take such a long time from inception to delivery, and because profit margins are very tight, price increases on our end will unfortunately result in price increases for you, our customers.

I've argued for a long time that China needs to follow the example of Henry Ford and pay their workers a wage that allows them to buy the products they make. All the more pressing now that their export markets are flattening out.

ebear