China's Labouring Stats!

According to Deloitte consultants’ most recent China’s Competitiveness Report, most southeastern Asian countries’ labor cost is about 50% of that of China. The rising average wage of Chinese workers is making China lose its competitiveness in labor-intensive sectors.

Other data shows that China’s manufacturing cost, which was 22% lower than that of the U.S. in 2003, was only 5.5% cheaper by the end of 2008 – and continues to decline. Though the principal cause has been the more than 30% appreciation of the yuan, rising wages and housing prices also push up costs.

Apart from the increasing labor cost, there’s also the rising cost of raw materials. In the past year, prices of coal and cotton have both gone up 40%, timber 15%, wood pulp for paper 50%, non-ferrous metals 30%, crude oil 32%, iron ore 90%, even agricultural products went up by 26%. All of this helps eat away manufacturers’ profits.