Wages and working conditions are improving in China, and look to keep improving. The side effect of highrr prices on chinese goods is the opportunity for domestic industry to compete with them.

Don't count on it. There are still plenty of third-world countries with oppressed masses to be exploited.

Problem with some of these other third world countries, which are primarily in Africa and Southeast Asia, are politically unstable governments, widespread poverty, little or no education, and little infrastructure for manufacturers to set up operations. Look at the problems that Royal Dutch Shell, Exxon Mobil, and other "Big Oil" companies are having with their Nigerian operations, due to political turmoil and labor strife there. They came to Nigeria for the oil, but strikes and other service disruptions have severely limited the flow of oil from that country. And much of Nigeria lives in dire poverty, combined with an unstable government. Countries with unstable governments are poor choices for setting up manufacturing for these reasons. And one of the reasons that oil is high is because many Middle East countries have either unstable and/or Western-unfriendly governments, and terrorist acts as well as unfriendly governments have limited the flow of oil from some of these countries. Eventually most global manufacturing will be on an even keel labor/cost/benefits-wise, so the cost advantage of importing a product from a foreign country might not be worth it much longer, compared to the cost of manufacturing the same product in a US factory, by a US laborer. I can see "Made In The USA" making a big comeback a few years from now, as Chinese labor costs skyrocket.

"one of the reasons that oil is high is because many Middle East countries have either unstable and/or Western-unfriendly governments, and terrorist acts as well as unfriendly governments have limited the flow of oil "

I believe many of the 'terrorist' acts against oil production are really rival oil exporters, OPEC is a example, to force them to limit production first to drive up prices then to keep them high.

One factor of the equation no one has mentioned, what has happened to the cheap shipping costs? It was the mechination of shipping in the latter 60's, which one author said increased the volume of products shipped 10 times, at 1/10th the cost, useing 1/10th of the labor. Shipping costs went very low. If shipping costs increase to reflect 10 times increase in fuel costs, what effect will it have om import/export markets?