China is known as the world's manufacturing floor. It produces a whole range of goods for which it ships to the rest of the world. Many companies have set up or relocated their factories to China to take advantage of the large and cheap supply of land, labour and other resources. However, after several decades of explosive growth, China is no longer as cheap as before. The figure below shows the average annual wages in manufacturing from 2003 till 2013, as reported by the National Bureau of Statistics of China.

Annual Growth in China's Manufacturing Wages

In the 10 years from 2003 till 2013, the average annual wages in manufacturing have grown from RMB11,000 to RMB41,650. This represents a nearly 3-fold increase in annual wages over the same period or a Compounded Annual Growth Rate of 14.2%.

Companies with factories in China are feeling the heat of such rapid (Read more...)