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An alternative analysis of the Chinese government’s wage statistics

A casual glance at the Chinese government’s wage statistics indicates that wages have been increasing rapidly over the last decade, with double-digit increases recorded over the last four years consecutively.

However if you dig deeper, a careful analysis of the official wage statistics can reveal many of the serious social and economic problems facing Chinese workers that the government chooses not to highlight – as shown in CLB’s report on Wages in China.

In conducting such analysis, however, it is crucial to bear in mind that the statistics compiled by the National Bureau of Statistics are limited and can be misleading. In an attempt to improve public awareness of problems inherent in the current system, a mainland Chinese blogger recently posted a detailed analysis of China’s wage statistics that explained the reality behind the rosy picture presented by the government, and revealed the inadequacies of the current reporting system.

The writer pointed out that the most significant limitation of the government’s wage statistics is that they are based only on persons formally classified as “staff and workers”(zhigong), a status that originated during the era of state planning and that was used to differentiate those employed in urban state-owned enterprises from rural labourers, etc. With the growth of the private economy over the last three decades, this classification has become increasingly anachronistic because it does not include persons employed in private enterprises, rural enterprises, laid-off workers and the self-employed. As such, the number of “staff and workers” in urban areas now only accounts for 40 percent of those actually employed in China’s cities.

Published wage levels do not take into account the tax, insurance and pension deductions and other fees workers have to pay nowadays. Moreover, the writer argues, the statistical division of wages into sectors masks the huge discrepancies in wage levels between the lowest paid workers in that sector and high-paid managers, and gives the impression that wages in that sector are higher than is actually the case for ordinary workers.

The writer argues that wages as a proportion of manufacturing output value have decreased markedly since 1990, and asks where have all the excess profits gone? The writer presents a thought-provoking alternative analysis of the government’s (monopolized) statistics that merits wider discussion. CLB has now translated and edited the article Let’s Resolve any Doubts about the “Double-Digit Growth in Wages.” Published as a PDF. The original version of the article can be found on our Chinese language website.