China labor costs rise 22% in 2010

New official data from 21 of China’s 31 provinces shows minimum wages rose 22% last year, putting increasing pressure on manufacturers that have already lost business due to the global economic downturn, the Financial Times reported. China’s labor costs remain low compared with other developed markets: The highest minimum wage in Shenzhen is only RMB1,320 (US$207) a month, while Beijing’s workers are the highest paid RMB13 (US$2.05) an hour. But the divergence between wages in China and other emerging economies like Vietnam and Bangladesh is becoming more obvious: UBS reports that China’s share of low-end manufacturing imports in the US has peaked and is now declining. This is putting pressure on China’s already-struggling export industry; however, Haibin Zhu, chief China economist at JP Morgan, said that companies which have followed this prescription have seen their profit margins grow more quickly than the national average in recent years.