Does China Still Have a Labor Cost Advantage?

Janet Ceglowski and Stephen Golub

No 3579, CESifo Working Paper Series from CESifo

Abstract: In recent years wages in China have been rising and the yuan has appreciated, potentially eroding China’s cost advantage in manufactures. This paper explores the evolution of China’s relative unit labor costs in manufacturing over 1998-2009. Between 1998 and 2003 China’s unit labor costs fell, but since 2003 they have increased both absolutely and relative to US unit labor costs. Much of the rise in China’s relative unit labor costs can be traced to a real appreciation of the yuan against the dollar. Despite the recent rise, China’s unit labor costs remain low relative to those in most other countries.

Keywords: China; labor costs; productivity; international competitiveness; real exchange rate (search for similar items in EconPapers)
JEL-codes: F02 F14 F16 F31 J30 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Related works:
Journal Article: Does China Still Have a Labor Cost Advantage? (2012)
Journal Article: Does China Still Have a Labor Cost Advantage? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3579

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