CHINA¡¯S RECENT WAVE OF WAGE INCREASES

SHENZHEN - The minimum wage in Shenzhen City in Guangdong Province will increase by ten percent to 1,100 RMB per month ($161.04) in July from 1,000 RMB ($146.41). In addition, part-time employee hourly wages will increase to 9.8 RMB. Foxconn, an IT contract manufacturer, will experience the most dramatic wage increases. In Shenzhen, assembly worker salaries will increase by 66 percent to 2,000 RMB per month beginning October 1. Shenzhen is following a recent wage raise trend that has been sweeping through China. On July 1st, Beijing will increase its minimum wage by 20 percent to 960 RMB ($140.55) per month from 800 RMB ($117.13).

"The rises in wages will obviously effect labor-intensive companies the most. Manufacturers, in order to stay competitive, will need to promote increased worker output, and by investing in more efficient technology," said Scott Garner, Director of Lehman, Lee & Xu Shanghai Office.

¡°With the increased cost of living in certain parts of China, it was only a matter of time before wages would need to be increased. Hopefully this is just a sign of good economic times rather than a roadblock to future foreign direct investment,¡± comments Edward E. Lehman, Managing Director of Lehman, Lee & Xu.



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