Wage increases in China
February 21, 2010 by Jules
Government ahead or behind curve ?
We had already touched on the subject of coming wage increases in South China.
The local government of Zhejiang province (South West of Shanghai), one of China's major export manufacturing hubs, has just announced a minimum wage rise of about 12%.
Two reasons are usually quoted for this increase:
- migrant workers need incentives to come back in larger numbers now that exports show a small improvement over last year.
- inflation is picking up in China, and the government wants to preempt social unrest (Beijing's 1989 unrest was started by inflation protests)
It is anyone's guess whether it is the fear of falling behind or the desire to keep ahead that motivated this decision. The most likely is a bit of both.
In: Market News