I recently heard from a very knowledgeable Chinese factory source that the Chinese government intends to double factory wages in next five years. This applies not just to toy factories, but to all types of factories. Labor represents 20% to 50% of a product's cost, so the prices of everything we buy can be expected to rise dramatically over the next five years. Commodity prices are already up dramatically and some are still rising due to hikes in oil prices.
Major cotton exporters are not exporting their cotton. Rural cotton farmers are stockpiling in hopes of getting a better price. Weather conditions have affected cotton output. Acrylic fabric prices have risen right along with cotton, as demand for alternatives to cotton soars. The price of plush toy stuffing material has risen dramatically as well. (Sheeshkabibble! As my mother used to say, whatever that means I have no idea.)
The Renminbi, the official currency of mainland China, and its primary unit, the Yuan, are rising in value as well, further compounding cost increases. Costs are going up for the long term and we have the opportunity now to prepare for this, both in business and personally. How does one best prepare for coming inflation?