Urban wages rose over 18% in 2011

The average wage for urban Chinese workers rose by 18.3% last year to RMB24,556 (US$3,885) per year, The Wall Street Journal reported, citing data released Tuesday by the National Bureau of Statistics. The figure is equivalent to a 12.3% rise in income after adjusted for a higher cost of living. In the non-private sector – a category which includes publicly-listed, foreign-invested and state-owned companies, as well as government agencies – wages rose by 14.3% to RMB42,452 (US$6,688). Both increases outstrip growth in 2010 of 14.1% and 13.5% (before adjusting for cost of living) in the private and non-private sectors, respectively. Increases in real income should help rebalance China’s economy away from its current dependence on exports and investment and towards domestic consumption. However, it may also squeeze corporate profits and put upward pressure on inflation.