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Does China Still Have a Labor Cost Advantage?

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  • Ceglowski Janet

    ()
    (Bryn Mawr College)

  • Golub Stephen S.

    ()
    (Swarthmore College)

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    Abstract

    In recent years wages in China have been rising and the yuan has appreciated, potentially eroding China’s cost advantage in manufactures. This paper explores the evolution of China’s relative unit labor costs in manufacturing over 1998-2009. Between 1998 and 2003 China’s unit labor costs fell, but since 2003 they have increased both absolutely and relative to US unit labor costs. Much of the rise in China’s relative unit labor costs can be traced to a real appreciation of the yuan against the dollar. Despite the recent rise, China’s unit labor costs remain low relative to those in most other countries.

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    Bibliographic Info

    Article provided by De Gruyter in its journal Global Economy Journal.

    Volume (Year): 12 (2012)
    Issue (Month): 3 (September)
    Pages: 1-30

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    Handle: RePEc:bpj:glecon:v:12:y:2012:i:3:n:6

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    Web page: http://www.degruyter.com

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    Cited by:
    1. Campbell, Douglas L & Pyun, Ju Hyun, 2014. "Through the Looking Glass: A WARPed View of Real Exchange Rate History," MPRA Paper 55870, University Library of Munich, Germany.

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