Salient to Investors:
The Asian Development Bank said:
- China’s surging wage costs are undermining competitiveness and threatening growth. Average inflation-adjusted wages have more than tripled in a decade and non-wage costs have risen since a 2008 labor law – restrictions on workers’ mobility through the household registration system known as hukou.
- Changes in China’s labor market have occurred at a speed unprecedented in history. In 2010, 45 percent of urban workers were employed by state enterprises or collectives versus more than 80 percent in 1990.
- China’s labor productivity has grown quickly but remains less than 10 percent of the level in Singapore and the US, and 20 percent of the level in South Korea.
- Competitors from Vietnam to Mexico stand to gain as investors seek to relocate to countries that have cheaper labor or are closer to big markets in the US and Europe.
- China will grow 8.2 percent in 2013.
Bloomberg says China’s pool of 15 to 39 year-olds fell to 525 million in 2012 from 557 million 5 years earlier, while the number of industry workers rose to 147 million from 117 million in the 5 years through September 2012.
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