China’s Wage Inflation, and the Consumption Wave

Some data points from a recent FT piece on China wages really stuck in my head:

  • Wages were up 2-5% a year most of last decade, but last year jumped 16%
  • Wages are up around 20 per cent in most eastern China factories this year
  • China wages are still around around a third of Mexican salaries and one-quarter of Brazilian, but the ratio is now narrowing quickly.

More here, but the upshot is that China consumption may surprise people, even if the transition from being export-led is rocky in the short term.