Wages on the Rise Throughout China

According to a recent survey, salaries in China's urban areas increased by nearly 14% during the first half of 2008. This compares to an increase of only 9% during the same period in 2007. While salaries at state-owned enterprises are increasing more quickly than those at foreign enterprises (around 14.5% vs. 12%), statistics show that employees at state-owned enterprises still earn only about half the amount of those working for foreign companies.

The survey also found that local employees in Shanghai were the highest paid, with annual salaries ranging from around 20,000 RMB (about USD$2,927) to more than 540,000 RMB (about USD$79,000). Local employees in Shenzhen, Beijing, and Guangzhou were the next highest paid. Salaries in second-tier cities like Hangzhou, Qingdao, and Nanjing were significantly lower. Employees in the financial, IT, and real estate industries were the highest paid throughout the nation.

Even with the sharp increases in salary, local pay in China is still often significantly below what employers would expect to pay similar positions in the West. Salaries for expats and Chinese returnees, however, are often equivalent to or even higher than salaries in the United States and Europe. This has led many Western employers to eliminate expensive expat benefit packages such as housing allowance and tax equalization.

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