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China's Unit Labor Costs

Published 10/01/2014, 01:32 AM
Updated 07/09/2023, 06:31 AM

Chinaese Unit Labor Costs

It is well appreciated that Chinese wages have risen markedly over the past few years.  Inflation has also consistently run faster in China than in the US, Europe and Japan. Some have cited this as a factor behind China's slowdown.

From a competitive point of view, what really matters is unit labor costs:  wages, benefits and productivity.  As this Great Graphic, tweeted by George Dorgan shows,  Chinese unit labor costs have fallen over the last couple of years.  As quick as wages may have risen, productivity has risen more. By this measure China has become more, not less competitive. 

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