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China's Uncertain Economic Future

Apple (AAPL) may squelch factory suppliers in China over child labor issues, but IBM (IBM), for example, opened one last year and Taiwan's touch-panel maker TPK Holdings (3673.TW) said it would build one there for $487.1 million.

That said, foreign firms are taking a harder look at China's once-fertile manufacturing bases as labor and material prices rise and Asian frontier markets become more attractive.

I won't predict whether the assembly lines eventually slow down for good, but in history Chinese reformists don't usually get their way without a long struggle, a palace coup or a disaster such as the 2003 SARS coverup that enrages the kingdom enough to shake down all its fiefdoms.

Most edicts go nowhere without punitive surgery. I couldn't help noticing that HSBC's purchasing managers' index for China reached a two-year high in January of 51.9, above the magic 50-point level that means manufacturing is going places.

At the time of publication the author had no position in any of the stocks mentioned.

Ralph Jennings is on LinkedIn.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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