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Wage and price dynamics in a large emerging economy: The case of China

  • Carsten A Holz
  • Aaron Mehrotra

This study finds that the growth in labour costs in China is not passed through fully to final prices in China, neither in the tradable goods sector nor in the economy as a whole. This probably reflects the strong pressure on profit margins from a highly competitive environment, especially in manufactured goods. The potential implications of labour cost increases in China for global inflation pressures are also discussed.

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Paper provided by Bank for International Settlements in its series BIS Working Papers with number 409.

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Length: 22 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:bis:biswps:409
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  17. Holz, Carsten A. & Mehrotra, Aaron, 2014. "Wage and price dynamics in a large emerging economy: : The case of China," BOFIT Discussion Papers 3/2014, Bank of Finland, Institute for Economies in Transition.
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  30. Ghali, Khalifa H, 1999. "Wage Growth and the Inflation Process: A Multivariate Cointegration Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(3), pages 417-31, August.
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