Starting in 2007, my colleagues and I found rising labor and real estate costs were starting to pose problems for many companies relying on “cheap China” to generate profits. Many of our clients faced squeezed margins and were coming to us to plot out next steps, whether that be looking to other markets such as Vietnam or focusing on keeping operations in China and improving worker productivity. Young job applicants to my firm also started to demand higher salaries because of run-away food inflation. One applicant, who had just graduated from Shanghai’s famed Fudan University, told me she needed guaranteed salary increases to track food price hikes on top of normal salary increases.

My colleagues and I started to do research into whether cost increases were a short-term blip or if we were at the start of a dramatic change in the economy that would force companies to adjust how they viewed China. It became clear China would no longer be a cheap place to manufacture. The one-child policy meant fewer overall people reaching working age. Available workers harbored white-collar dreams and were no longer willing to work for pennies on the dollar far away from their families.

It also became clear that rising incomes and the creation of a middle class was changing consumption patterns. Chinese consumers were no longer looking for the cheapest products and services to buy. They had the money and the aspiration to buy more expensive products. Companies that could position themselves to cater to the evolving Chinese consumer would do very well.

I first presented our results at a speech at the Asia Society in New York. A fellow speaker literally hissed at me while I was speaking and told me I was flat out wrong—she said China would always be cheap. She worked for a human resource consulting firm and heckled, “You don’t know what you are talking about.”

Well, migrant workers salaries have been rising 20 percent annually since 2007, and it is only about 30 percent cheaper to produce in Shanghai than in Alabama in America when factoring in all transportation and other costs. Already, companies such as Nike source more from Vietnam than from China. I often tell clients to think twice before relocating operations to China and that it might be better to stay in America or even reshore back. China changes very fast, and companies and investors that do not realize this and react quickly enough can run into problems.

After my speech, I started doing deeper research and publishing my work in Forbes and via CNBC, which led to a book contract. When the book was first released, I was surprised at the reception. Many China-based consultants in sourcing did not like what I wrote and said that China would always dominate in manufacturing. They are right: China’s infrastructure and ecosystem are superior to those of Indonesia, Cambodia, and other similar nations, so it won’t lose its dominance in manufacturing as I wrote in the book. However, the type of manufacturing will change from light industry to higher value-add products, squeezing many intermediaries and causing many Chinese firms to start producing under their own brand.

Executives on the ground in China trying to sell into China found that many of the anecdotes resonated with their experiences, and they started sharing the book with their colleagues back in headquarters. Investors also began using the book to plot investment strategies going forward.

Since the book’s initial release, I have travelled across the world, from Shanghai to Singapore to Cape Town to New York to present the findings from my book. This edition includes updated data gathered over the past two years. If anything, the original conclusions are correct as the era of the end of cheap China is gone.