China Salaries Yet Again

By Frank Mulligan - Recruit-china.com

For many of us, China Briefing has become an indispensable source of solid information. In the beginning, when it arrived as an email, China Briefing tended to be a bit dry, but facts and figures usually are, arenít they?.

Recently, they put me on to a report from Hay Group that shows China leading the pack for salaries (below). In fact, it is not just leading, it is streaking ahead. Real pay growth for Chinese professionals is 60% higher than the next leading country, India.

The details illustrate the emerging sense that China is no longer a low cost country, or at least soon wonít be. You canít have high salary increases for more than a decade and keep your low cost status. Somethingís got to give.

In this scenario, and this is hard to conceptualize, high cost Germany gradually ëcatches upí with China. Or should I say ëcatches downí. Salaries in Europe and the US are virtually stagnant, and the evidence I see is that salaries for low-paid workers in these territories is rising even slower than those for the middle classes.

Fortunately for China, I still canít my head around the idea of Germans making textiles or assembling plastic toys. We still have a ways to go with the current model, but eventually it will run out of steam.

Hence the focus in China on semiconductor plants, pharmaceutical R&D and software outsourcing.

The table can be found here

Email frank.mulligan@recruit-china.com
Frank Mulliganís blog english.talent-software.com