Made in China, who really profits? March 4, 2007 Thomas Fuller in the International Herald Tribune provides an interesting analysis about who profits, and how much, on the current wave of western companies moving the manufacture of their products to China. "U.S. and European officials argue that factories like these, relatively unencumbered by regulation and sheltered by an undervalued currency, give China an unfair advantage. But a close-up look at the Tianjin Jiahua Footwear factory shows a different picture, one of vulnerability and tiny margins on the Chinese side. The biggest earnings in the mass manufacturing business, according to factory owners and other industry executives, both foreign and Chinese, are not made by companies producing the shoes, but by those who market and sell them in the United States. [...] A Chinese factory makes leather work boots and sells them for $15.30 a pair, earning a profit of $0.65. The U.S. retailer sells them for $49.99 and expects a profit of $3.46". Fuller's analysis also looks at the two issues that critics use in saying that China has unfair advantages: "The money that the Tianjin factory workers is so small that if every salary in the factory were doubled, the final shelf price in the U.S. retail outlet would increase from $49.99 to $51 and change. Neither would an appreciation of the Chinese currency - which the U.S. manufacturing lobby says is needed to keep Chinese factories from undercutting U.S>-made goods - make much difference to an American consumer. About half the cost of making the Tianjin work boot is partially or fully denominated in dollars, including the leather from the United States and the synthetic rubber sole made from imported petrochemicals. With such a large proportion of the boot's final retail value accrued outside China, an increase of 10% in the Yuan might rise that price by a mere 1.3%."