Lianhe Zaobao: The Wave Of Wage Increase In China's Manufacturing Industry Will Spread From The Pearl River Delta To The Whole Country.

Singapore's Lianhe Zaobao issued a note recently saying that the surging wage surge in China's manufacturing industry may continue to push the stagnation of social reform and economic reform if it continues. The Chinese government has taken a clear-cut emphasis on Reform in this year's "two sessions", which shows that the authorities clearly see that the past economic development mode has been difficult to continue, and it is estimated that the trend of wage rising will continue to be "pleased to see its success".

The excerpts are as follows:

Recent events show that the bargaining conditions and determination of Chinese workers have increased in the labor and capital game, and the wage surge is opening in the PRD, and it is likely to spread to the whole country.

To a certain extent, the trend of wage increase in China's manufacturing industry is also a product of "up and down forces". Since the beginning of this year, raising the income of residents and adjusting the structure of income distribution have entered the agenda of the highest level. The official media and the English edition of China Daily published editorials saying that we should pay more for workers. At the same time, the news of China's intensive minimum wage rises in all parts of China. Beijing, the latest camp, has just announced that the minimum wage will be adjusted from 800 yuan (RMB) to 960 yuan per month from July 1st, an increase of 20%. CCTV news reports that 11 provinces and autonomous regions in China have raised the minimum basic wage this year, and 20 provinces have planned to adjust this year.

The impact of the wage increase on the prospects of the Pearl River Delta and the "world factory" is another topic of concern. A recent survey by Hongkong's TDC pointed out that in the past six months, the shortage of labour has promoted the wage level of the PRD to rise by 17%, plus the corresponding increase in the social insurance premiums paid by employers, and the production cost of enterprises has increased by 4% to 6%. It is said that some manufacturers will be forced to move the factory northward or to the provinces with lower labour costs, such as Jiangxi, Hunan and Hubei.

However, optimists believe that with the efficiency and technology of Chinese workers, industrial cluster matching and logistics advantages, domestic enterprises can withstand the impact of rising costs. Of course, many enterprises are facing the difficult test of industrial upgrading. The conflict between the production mode of "multi sales" and "small profits" and the trend of the times will become more and more obvious. The pressure of enterprise transformation will increase.

Whether the transformation is successful or not, the enterprises and the Chinese government have not fully grasped it. However, pushing up the minimum working standard shows China's desire to transform. Of course, in the process, the government is also facing the test. It must play its role, such as reducing taxes and creating favorable policy environment to help enterprises develop.

If the wage increase trend continues, it may infuse the driving force for social reform and economic reform that has been stagnant. The Chinese government has taken a clear-cut emphasis on Reform in this year's "two sessions", which shows that the authorities clearly see that the past economic development mode has been difficult to continue, and it is estimated that the trend of wage rising will continue to be "pleased to see its success".