Slow pay rises necessary for growth

AT A NEWS CONFERENCE ON FRIDAY, Xin Changxing, vice-minister of human resources and social security, said that pay rises should be slowed to keep the nation competitive. Beijing Youth Daily comments:

More pay is the common wish and eternal pursuit of all employees, but whether it can be realized depends on the economy and competition in the market.

Wages increased slowly prior to 2007, but they increased rapidly after that, due to a shortage of labor. During the low-pay years, too many entrepreneurs invested in the manufacturing and service sectors, which created overcapacity; when wages rose, the enterprises suffered from lower profits.