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China Labor Cost continues to rise: Middle Income Trap?

On Saturday, I attended a job fair held at Shanghai Stadium. I stopped and talked to many of the companies trying to recruit new workforce – a typical scene post New Year – and many told that they cannot find anyone. The average manufacturing industry salary in China has increased by 300%, to 3.6US$ per hour in last ten years. The current salary has exceeded Brazil, Mexico, and it is catching up with Greece and Portugal. Although manufacturing industry is one of the leading industries, thus employing large number of people, the average salary nationwide has also growth from 1.5 dollars per hour to 3.3 dollars per hour over the last 10 years.

China issues Doc #1: focus on income gap, but…

China’s first central document of 2017 promises to maintain the drive to resolve rural issues on the road to a moderately prosperous society by 2020. The first policy statement of year is widely referred to as the “No 1 Central Document.” For the past 14 years, it has been devoted to agriculture, farmers and rural areas. The Chinese government is facing the classic dilemma of: on one hand trying to increase the living standard of the rural population and at the same time narrowing the Urban-Rural income gap.

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