China: The Paymaster
July 6th, 2007 - by 2point6billion.comIndians would be surprised to know that many factories in China pay workers as much as US $ 2.50 an hr. In India many educated people don’t make that in a day. The figures from last year’s Mercer survey (below) support this. Production workers in China are earning more than those in India.
AVERAGE ANNUAL PAY-CHINA (in British Sterling)
Project manager: Ł12,173
Software engineer: Ł6,998
Accountant: Ł4,677
Sales rep: Ł2,649
Production worker: Ł1,214
AVERAGE ANNUAL PAY-INDIA (in British Sterling)
Project manager: Ł5,220
Software engineer: Ł5,344
Accountant: Ł2,956
Sales rep: Ł2,464
Production worker: Ł964
(Source: Mercer Human Resource Consulting, Survey, 2006)
Why the disparity? One reason may be China’s shortening supply of laborers.
“China has been shifting from an era of excessive labor power to a labor power shortage, with its turning point likely to occur in the 11th Five-Year Plan (2006-2010) period and, to be specific, it could be in 2009″ (People’s Daily, May 14, 2007).
This trend will contribute to significant changes in China’s economy which is centered around manufacturing and exports. Not incidently, help drive China’s growth away from labor intensive growth and up the value chain.
Alternatively, what if China were able to increase its labor supply? The new, but historic, silk road passasge between China & India, the Nathu La Pass may possibly provide China with a new source of migrant workers: workers from India!
Additionally, the previous post titled “White-collar salaries rising faster in China, India than in West” gives good insight into the pay increases in India and China vis a vis the west. Enjoy!
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of Dezan Shira & Associates, the Asian foreign direct investment legal and tax practice responsible for this website, with details of services provided to MNC’s across Asia and our Asian Regional offices. 
July 9th, 2007 at 7:01 pm
Seriously interesting…thanks.