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Chinese printing prices are rocketing as changes to the country’s labour laws combine with other key inflationary factors to create “the perfect storm” in pushing up costs, UK publishers have reported.
China’s labour costs have increased since the introduction in January of tightened employment laws strengthening workers’ rights, with children’s novelty products, which require extra labour in the production process, particularly affected.
Meanwhile China’s trading currency the RMB has appreciated sharply against the US dollar this year, hitting record highs. This has combined with paper price rises, which publishers report up 25–30% since last November, and the relentless rise in the price of oil. China’s rate of inflation has also soared, topping 8% in the early months of this year.
Shaun Hodgkinson, director of purchasing at Penguin, said it was a “difficult” time. “To some extent printing is affected by changes in the global economy, and whereas before it would be one factor or another, in China at the moment four key inflationary pressures are all happening at once. It’s been described as ‘the perfect storm’.”
Hodgkinson said that Penguin was coping with the price rises by careful management through a China-based production manager: “We’re a big group with leverage, we set budgets with our suppliers and try to plan as much as possible to offset inflationary pressures. As with everyone else, we look at alternative sources, but equally we’re very loyal.”
Tracy Florence, production director for Macmillan Children’s Books, said: “It’s quite an unstable situation. What’s clear is that China’s changing quite rapidly and labour rates are rising, and that’s a factor that doesn’t apply in the other Far East territories where we print such as Thailand and Singapore. It is potentially a significant development, but there’s a lot of speculation about how temporary it is, and whether the Olympic effect is affecting capacity and creating a false picture.”
Neil Palfreyman, production director at Thames & Hudson, said yet another cost factor affecting Chinese printers was coming about through problems in energy supply.
“In certain regions of China, energy is supplied out of the national grid five days out of seven, and the rest of the time they use diesel-fuelled generators because they are so heavily industrialised. So the diesel charge is coming to you,” he said.