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Can Chinese Manufacturing Firms Cope with Rising Labor Costs?

Author

Listed:
  • Cheng Hong

    (Dean of the Institute of Quality Development Strategy， Wuhan University
    Director of China Employer-Employee Survey (CEES) Management Board and Director of the Macro-Quality Management Collaborative Innovation Center in Hubei Province)

  • Albert Park

    (Chair Professor, the Division of Social Science, Hong Kong University of Science and Technology
    Professor of Economics and Public Policy, Hong Kong University of Science and Technology
    Director, Institute for Emerging Market Studies, Hong Kong University of Science and Technology)

Abstract

Albert Park, the Director of HKUST IEMS, Chair Professor of the Division of Social Science, Professor of Economics and Public Policy, ask how Chinese Manufacturing Firms survive under the rising labor wages. Dramatic increase in real manufacturing wages in China combined with slowing external demand, is putting great pressure on Chinese manufacturing firms. The tight labor market in China led to a high worker turnover rate of 26% in Guangdong from 2015 to 2016, with rates higher for younger workers below age 28 (37%) and migrant workers (30%). Upgrading requires making new capital investments such as in automated equipment or robots, often with government support. To support adjustment to rising labor costs, it is important for China to allow for open market competition and create a level playing field.

Suggested Citation

  • Cheng Hong & Albert Park, 2018. "Can Chinese Manufacturing Firms Cope with Rising Labor Costs?," HKUST IEMS Thought Leadership Brief Series 2018-21, HKUST Institute for Emerging Market Studies, revised Feb 2018.
    • Handle: RePEc:hku:briefs:201821
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    File URL: https://iems.ust.hk/assets/publications/thought-leadership-briefs/tlb21/iems-tlb-21-cheng-hong-albert-park-cees.pdf
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    More about this item

    Keywords

    wage; manufacturing; china; labor market;
    All these keywords.

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