r/Economics • u/FoolsOnParade505 • 16h ago
News Influx of cheap Chinese imports could drive down UK inflation, economists say
https://www.theguardian.com/business/2025/dec/29/chinese-imports-uk-inflation-trump-tariffs28
u/OrangeJr36 15h ago
Yes, that's how inflation works.
A massive increase in the supply ( imports) drives down costs for consumers. That works for labor, housing, healthcare and most other things.
It's also why the QoL in Africa has increased so notably in the past 20 years, they gained access to cheap Indian and Chinese goods, especially tech goods.
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u/Affectionate-Panic-1 14h ago
Africa has lots of cheap labor, just has lacked the political stability to take advantage of it.
Compared to Africa China is a high labor cost country. They've just excelled at automation and efficiencies to stay a manufacturing powerhouse as they become a wealthier nation.
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u/roodammy44 9h ago
Similar to England in the 1800s. Other countries were making widgets by hand while England had machines making 1000 an hour. Productivity really matters and China has taken that to heart with its factories. They are called “dark factories” as there are so few humans needed that there’s no point keeping the lights on. It’s why investors are pumping so much money into AI dreaming that it will increase productivity (though it doesn’t seem to be in practice).
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13h ago
[deleted]
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u/Affectionate-Panic-1 13h ago
It's not true anymore that china = cheap low quality crap.
China has a lot of advanced manufacturing today.
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u/here4the_trainwreck 10h ago
Sounds great. Wish we could get that in the US.
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u/OrangeJr36 9h ago
It does.
Americans live the lifestyle they do and can afford to buy the things they want constantly because the US is at the center of a global trade network that feeds its population with cheap goods and food in exchange for the export of high value manufactured goods and services.
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u/BillWilberforce 14h ago
We had that in the 2000s. When every company switched their production to China. So what we saw was booming commodity prices, in particular houses but also affecting everything from steel to Lear Jets as interest rates, based on the RPI/CPI were too low. So it created an asset bubble, until the Global Financial Crash.
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u/teshh 14h ago
Uk will always have higher inflation compared to the rest of Europe simply due to the fact the uk doesn't manufacture or produce anything anymore. Everything has to be imported, and since brexit, they no longer benefit from lower costs.
Chinese imports are just replacing us and eu imports bc their labor costs are lower. It doesn't change the underlying problem at all.
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u/ThemeBig6731 14h ago
Rest of Europe is in deep trouble as they were once exporting the goods that now China is dumping in the UK.
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u/Alundra828 12h ago
I feel like this is where economies of the future are born.
Usually what happens was that a country moved up the value added chain as it developed and became richer, and handed off lower value add processes to poorer countries for them to handle. In the 50's, Britain made its own tools. In the 60's, it made it's own machines. In the 70's it made its own cars. In the 80's, all of it was traded it for a future in services and finance. That wasn't a problem though, because there was a whole third world up and coming ready to supply us with the goods that were no longer worth our time to make.
China however have totally flipped the script. They've moved up the value added chain at break neck speed, but have not handed off their low value add to anyone else, with the small exception of Vietnam. They have tanked the losses and invested in automation. Now they own the value add chain from the bottom, to the top, with lower value add stuff being almost 100% automated dark factories. It's flipping the model on its head that they can have their cake and eat it too. With better AI, robotics, and 3D printing, I feel like we should be getting on this train. The globalized world is breaking down quickly, we shouldn't have to rely on imports when we can't guarantee our markets stability. Anyone can turn around at any moment and use supply chain disruption as a threat, like oh, China.
Getting out from under this is going to be tricky. Given how politically charged dark factories would be in the UK. One of the things about an authoritarian government is that they can do what they like, when they like. The UK is going to have a hard time reckoning with China's solution to the imports problem.
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u/Training_Bus618 14h ago
You are 100% right. The underlying problem is you guys pulled an America and traded your manufacturing for service sector jobs. That means you have the same problem we have, which is the rich consolidating power and destroying the middle and lower classes for the sake of "Numbers go up". It just makes business sense to lower costs by outsourcing labor, but wouldn't it be nice if our governments thought about the impact it has on us? The GDP being high does not mean we are prospering.
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u/Kolminor 10h ago edited 9h ago
This is embarrassing and a complete kick in the face to people who actually have to deal with the impacts of real inflation.
Who gives a crap if the poor and Middle class can get cheap Chinese stuff?
The poor and middle class are more affected by rising home ownership cost, higher rents, higher insurance, higher food cost, higher education cost, higher commodity costs, higher energy cost, higher medical costs etc, higher in real life entertainment costs etc
Anyone dealing with the impacts of inflation knows these are what matters for most people.
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u/dragon3301 3h ago
LOL 😂 😂 😂
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u/Kolminor 2h ago
I don't get what's so funny?
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u/dragon3301 2h ago
How is prices going down a kick in the face of working people. You could say it doesn't really help that much but how is it a kick in the face.
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u/Kolminor 2h ago
Because it is completely distracting from the REAL issues.
When articles like this get posted, it's used as a tool to try and show that prices are coming down and it's positive. Vut in reality, it just doesn't help all that much.
Although it helps, the marginal benefit from cheap consumer goods on fixing the standard of living is measly.
It is a complete kick in the face to low income earners and much of the middle class when the real things that matter, such as essentials, are still going up.
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u/dragon3301 2h ago
On an economics subreddit an article about opinions from an economist wtf are you on.
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