SEOUL, July 7 (Yonhap) — The average wage level of Chinese workers is expected to more than double in five years due to labor shortage, which could put pressure on global inflation, a report said Wednesday.
“The shortage of labor force in China is continuing and the number of economically active workers has declined,” said the report by the POSRI, a research institute of steel giant POSCO. “The average wage of Chinese workers will increase by more than double within five years.”
Many economists assess that the Chinese economy has drained its once vast reserves of unemployed workers in rural areas and is facing a shortage of fresh laborers, according to the report.
The POSRI said the global economy is not likely to enjoy “low inflation and high growth” again, which implies that the expected wage hikes in China may stoke global inflation.
Recently, domestic and foreign companies in China have decided to raise salaries for employees at their factories as workers went on strikes demanding higher wages.
The spiral labor unrest is prodding companies in China to shift their production to India, Indonesia and other Southeast Asian nations, the POSRI said. For the past years, many foreign companies have rushed into China in the hopes of taking advantage of low labor costs.
“Wage hikes may accelerate moves for industrial restructuring,” it said.