By David Barboza

Feb 1, International Herald Tribune

SHANGHAI: China's latest export is inflation. After falling for years, prices of Chinese goods sold in the United States have risen for the last eight consecutive months.

Soaring energy and raw material costs, a falling dollar and new business regulations here are forcing Chinese factories to increase the prices of their exports, according to analysts and Western companies doing business here.

The rise was a modest 2.4 percent over the past year. But even that small amount, combined with higher energy and food costs that also reflect China's growing demands on global resources, contributed to a rise in overall inflation in the United States to a 4.1 percent rate in 2007, from 2.5 percent the year before.

Because of new cost pressures here, American consumers could see prices increase by as much as 10 percent this year on specific products — including toys, clothing, footwear, and other consumer goods — just as the United States faces a possible recession.

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