Government policies encouraging rapid wage growth to boost consumption are clashing with attempts to aid private enterprise as China’s slowing economic expansion and lagging low-cost manufacturing sector put the squeeze on small and medium-sized companies, which are now struggling to pay employees, Bloomberg reported, citing analysts and economic data. Profit growth of private enterprises dropped to 9.7% for the first nine months of 2014, down from 14.8% for the period in 2013; average private sector manufacturing wages rose 13.5% last year after a 16.9% gain in 2012. (For more on labor and wages in China, see our recent in-depth report.)
China Economic Review