2011-08-18

Rising wages in China

In Labor costs soar in China, I laid out the demographic reason for rising wages in China. Now economists are coming to the same conclusion.

Caixin Survey: An Era of Wage Growth
China is approaching a new era of wage inflation that may last as long as 10 years. There are many contributing factors – rising consumer good prices, soaring property prices, a tightening labor supply and a new generation of more educated workers.

In addition, as per-capita GDP surpasses US$ 3,000 to 4,000, China's manufacturing workers' demands for leisure time has been growing, further increasing the pressure for wage growth.

Taiwan and South Korea experienced 10 years of high-speed wage growth in the 1980s, and China may now be poised to enter a similar period.
By the end of the decade, people will be obsessed with the Chinese consumer.

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