Four Topics on Wage Changes in the Chinese Economy

    1. The Overall Trends of Wages in China
    Foxconn, the world biggest manufacturer of electronic products, took the lead in wage rising, with one-off increase in compensation by over 30% after being blamed for twelve cases of chain suicide of its employees. It seems to indicate that 2010 is a year of significant wage rise in China. If one, however, closely follows the dynamics of migrant workers’ wages,he or she should know that the event is just the continuation of the trend of wages increase since 2003, the year that first witnessed the labor shortage and thus the year of significance in the Chinese economic development. This essay discusses issues related to wages increase of ordinary workers, its root causes and implications for decision-makings in terms of public policy and private business.
    Wages Increases as General Trend and by Sector
    Wages growth in China has been long trend, especially since the late 1990s, in which mass redundant were laid off and as a result, the productivity enhanced. As shown in Fig. 1,the 3-years smooth growth rates for average and selected sectors’ wages have been above 8% since this century, the fastest comparing with rest of the world by whatever grouping.However, while the Chinese statistics are very complicated, the data on wages are the most difficult to understand. That is, it is not proper to understand the dynamics of China’s wages by just looking at figures in Figure 1, because they mainly reflect the wages rates for formal employees. Given that the migrant workers, who mainly take informal jobs in non-agricultural sectors, make up one-third of urban employment, the increase in migrant workers' wages deserves specially examining……
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    ( in Human Capital Formation and Economic Growth in Asia and the Pacific, London and New York: Routledge )