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Report: Wages on the rise

By Hu Yuanyuan | China Daily | Updated: 2013-04-15 09:16

Survival game

A running theme across the bank's surveys over the years is that higher wages reflect and are generated by higher rates of labor productivity.

"If wage growth significantly exceeds productivity growth, we have a wage inflation problem; if per-worker output is growing at a similar pace to wages, there is no problem," said Green.

Around 8 percent of respondents believe that their per-worker output has risen more than wages. But, like last year, a large minority reported otherwise.

"This means that we should still expect some of the increase in wage costs to spill over into prices of final goods, broadening inflationary pressures. Some companies are clearly more constrained than others when it comes to increasing productivity," Green added.

Companies are investing in capital equipment - 184 (61 percent) of respondents said this was their primary response to labor shortages. Process automation and streamlining, outsourcing or partially sub-contracting production, boosting in-house design functions and using employment agencies are some of the other responses cited.

Threshold value

The 12th Five-Year Plan (2011-15) sets a goal of raising the national minimum wage by an average of at least 13 percent a year, faster than in past years.

Localities are free to set their wages above the national level.

"Our working hypothesis has been that real labor-market changes have driven wages higher and that minimum wages have generally lagged," said Green.

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