Price Increases Will Cast Shadow over Taipei Show

TAIPEI, Taiwan – Just hours before the opening of the THE bike industry show at the brand new Nangang Exhibition Hall, it’s already clear what this year’s Taipei Int’l Cycle Show will be all about. Price increases!

All across the industry price increases will be announced; from semi-finished product suppliers; component makers up to bike manufacturers. The prices are expected to be raised by at least 10 to 15%!

The reasons behind the full scale upward price trend is, apart from price hikes in raw material, for all caused by recent developments in China. There on January 1 the new “Labour Contract Law” came into effect which overall will increase labour costs by about 14%. The general inflation rate in China is also on the rise.

Inflation

In February an unexpected high of 8.7% was recorded. With the surging of the inflation rate, it is expected that the Chinese central bank is to raise interest rates further to keep the world’s fastest-growing economy from overheating.

Next to inflation, also the exchange rate for the Chinese Yuan is steadily on the rise. The Chinese currency is expected to get 8% more expensive this year. And what will also contribute to the price increases is the Chinese government who is expected to drop the export subsidy rate further. In 2007 that rate was dropped with 4% to 9%; another 4% drop is expected for this year.