Slowed growth, rising wages squeeze China's private enterprises

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.)