Chinese wage growth remains robust

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/05

The National Bureau of Statistics reports that the per capita monthly disposable income in China at the end of 2015 was about 1,870 yuan ($280). Incomes were up nearly 9 % y-o-y in nominal terms and 7 % in real terms. The income difference between urban and rural Chinese are still huge; urban workers made nearly three times more than their rural colleagues.

Data from the household income survey show that wage earnings account for about 61 % of urban disposable incomes, and 44 % for rural incomes. Business earnings in cities represented 10 % of total income, while in the countryside, they accounted for a third of total income. Income transfers accounted for 17 % of urban income and 19 % in rural income. Property income was noteworthy mainly for city-dwellers.

The household income survey further found that urban wages in December were up nearly 8 % y-o-y. Based on this, the average monthly wage in the public sector and government-owned businesses was about 6,100 yuan ($930). The official wage data for 2015 have yet to be released.

While official figures for private sector wages are unavailable, they are typically lower than public sector wages. The average wage reported in December for migrant workers was 3,070 yuan ($470). According to press reports, the entry-level wage at an electronics assembly plant in Guangdong province is 2,100 yuan ($320) a month and later rises with overtime to 3,200–4,500 yuan ($480–680). Guangdong’s regional minimum wage is just under 1,900 yuan ($290). According to the China Labour Bulletin, minimum wages in mainland China are about half minimum wage levels in Taiwan or Hong Kong, but substantially higher than in other Asian emerging economies. 

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