More: China's Generation Y, the children born after the one-child policy came into effect, are increasingly aware of their rights to a legal wage, health insurance, and a certain number of days off every month. Their demands for better treatment will continue to drive up the cost of manufacturing in China. Already, southern China's Guangdong province, known as "the workshop of the world," is short 2 million workers, the equivalent of 14 percent of America's entire manufacturing workforce

The problem for American retailers and consumers hooked on $3 T-shirts and $30 DVD players is that there is no other China waiting in the wings to make cheap goods reliably for American shoppers

So importers are looking back to countries they once rejected in favor of China—Indonesia, Mexico, and Malaysia. And they are looking ahead to countries not yet integrated into the global consumer-goods supply chain, such as Brazil and Kenya