Can Chinese Manufacturing Firms Cope with Rising Labor Costs?

Cheng Hong () and Albert Park
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Cheng Hong: Dean of the Institute of Quality Development Strategy， Wuhan University

No 2018-21, HKUST IEMS Thought Leadership Brief Series from HKUST Institute for Emerging Market Studies

Abstract: Albert Park, the Director of HKUST IEMS, Chair Professor of the Division of Social Science, Professor of Economics and Public Policy, ask how Chinese Manufacturing Firms survive under the rising labor wages. Dramatic increase in real manufacturing wages in China combined with slowing external demand, is putting great pressure on Chinese manufacturing firms. The tight labor market in China led to a high worker turnover rate of 26% in Guangdong from 2015 to 2016, with rates higher for younger workers below age 28 (37%) and migrant workers (30%). Upgrading requires making new capital investments such as in automated equipment or robots, often with government support. To support adjustment to rising labor costs, it is important for China to allow for open market competition and create a level playing field.

Keywords: wage; manufacturing; china; labor market (search for similar items in EconPapers)
Pages: 4 pages
Date: 2018-02, Revised 2018-02
New Economics Papers: this item is included in nep-cna and nep-tra
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