Low prices doesn’t mean low inflation. Henry Ford’s introduction of the assembly line, which reduced the price of cars, was NOT a deflationary act, nor was Apple’s price cut on their iphone.
Rising Chinese wages will also make their goods more expensive. As their goods because more expensive, other countries goods, including Americans, will become more competitive. As demand for Chinese goods tapers, so will their increases in wages.
Inflation is only a result of excess money. It is often reflected in prices, but changes in prices due to changes in supply & demand do not effect inflation.
Not so sure I buy this. The supply curve does reflect input costs. For China, recent product recalls (mainly toys) suggest they are going to have to increase quality control elements of production plus use more expensive inputs (e.g., non-lead based paints). This will shift the supply curve up, which (ceteris paribus) means that prices will rise. To the extent that rising input prices raise output prices, supply can cause inflationary pressures in the market. Look what ethanol production has done to milk prices and what increased demand for oil in China has done to world oil prices, and the trickle effect of those price increases.