BIZCHINA / Biz Media Digest
Macroeconomy: Wage rises not a breakthrough
(China Daily)
Updated: 2007-07-06 13:38
We are happy to see that wages of employees in China have seen the
fastest growth in the past four years since the adoption of the reform
and opening policy in the late 1970s, but meanwhile we cannot ignore some
problems behind it, says a commentary in Qilu Evening News. An excerpt
follows:
Related readings:
Workers' wages see two-digit annual rise for 4 years
China has 80 million middle class members
Monopolies wages in the cross hairs Wages remain strong in real estate,
monopolies
Firstly, the fastest wage rise is based on the fact that the wages of
employees have long been kept at a low level. The average yearly salary
of employees in China was 12,422 yuan in 2002 and 21,001 yuan in 2006.
Though the salary rose 12 percent year on year excluding inflationary
factors, the average monthly salary of employees in China is barely over
1,000 yuan. If compared with the robust economic growth, this level of
salary is not high.
Secondly, the period of the fastest wage rise is also the time when the
income gap is widening. Although the average income and the total sum of
income have both seen big increases, even faster than the growth rate of
China's GDP of the same term, the income of the majority of employees in
China is lower than the average income. That's mainly because high
incomes have greatly lifted the average income to a higher level.
Thirdly, the fastest wage rise occurs when the prices of some goods and
services rise too fast. Housing prices are shooting up, putting great
pressure on ordinary people. Education, medical treatment and public
utilities like water, electricity and gas all see large price increases.
That's why people feel much more pressure than before even though they
earn more.
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