Wage growth slows amid economic uncertianty
June 26th, 2012 | XinhuaMore than one-third of China’s provincial-level governments have released wage growth targets for workers this year, with most of them trimming salary increases as companies face decreasing profits amid a slowing economy.
Of the 12 local governments that have released wage plans, most have targeted 14-percent wage growth this year, the Economic Information Daily reported Monday.
However, the growth target was off the pace of wage increases earned by workers in many jurisdictions last year. The target set in Hebei and Shaanxi provinces and Shanghai this year were as much as 3 percentage points lower than last year, the report said.
Analysts say the downshift shows local regions are cautious in regulating wage growth as the economic outlook for this year remains uncertain.
Government data show that profits from the nation’s state-owned enterprises fell 10.4 percent year on year to 830.13 billion yuan (133.56 billion U.S. dollars) in the first five months of this year.
“Overly fast wage increases will push up costs for enterprises, and may create challenges for the operation of small and medium-sized companies,” said Yang Liming, a labor and wage researcher with the Ministry of Human Resources and Social Security.
Yuan Lei, an economist with the Chinese Academy of Social Sciences, said China’s exports may slow further this year amid a weak global economic recovery, which will create even greater pressure on export-oriented companies to curb the pace of wage increases.