China's Unit Labor Costs
Marc Chandler | Oct 01, 2014 01:32AM ET
It is well appreciated that Chinese wages have risen markedly over the past few years. Inflation has also consistently run faster in China than in the US, Europe and Japan. Some have cited this as a factor behind China's slowdown.
From a competitive point of view, what really matters is unit labor costs: wages, benefits and productivity. As this Great Graphic, tweeted by George Dorgan shows, Chinese unit labor costs have fallen over the last couple of years. As quick as wages may have risen, productivity has risen more. By this measure China has become more, not less competitive.
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