China: Wages could jump 10% in 2014
10/01/2014
A Bank of America analyst predicted 11% growth this year on top of 10% this year, while JPMorgan Chase and Mizuho analysts predict 10% to 15% increases.
China’s ruling Communist Party is pushing for pay increases to retain public support and to accelerate the nation’s shift away from polluting and capital-intensive manufacturing to a more services-driven economy.
Workers in Shenzhen in Guangdong province have been promised a 13% increase this year while in Yangzhou, Jiangsu province, 15.6% has been agreed.
While textile and apparel manufacturers might seek out cheaper locations to base operations, they may be deterred by wage disputes in Cambodia, India, Bangladesh and Indonesia.
The rising wages in China will lead to increased consumption in the country, which could benefit brands.
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