Chinese wages may now exceed those of many other emerging markets, but FTCR’s monthly survey of labour market conditions shows that the inflation that has driven this trend has been steadily weakening.

Every month since June 2012 we have asked hiring managers across the manufacturing, services and construction industries how average wages compare with those of a year earlier. Across all three industries, fewer respondents each month tell us that wages are rising on a year-on-year basis. On this track, as soon as the end of this year we would expect a majority of employers to be reporting that wages are either stagnant or falling outright.

Slowing wage growth may help China compete against other emerging markets but the prevailing official rhetoric is about moving the economy up the value chain and leaving low value-added jobs behind. Cooling wage inflation tallies with official data showing a steady decline in disposable income growth. This poses enormous challenges for a government looking to rebalance the economy away from investment and towards a more consumption-driven growth model.

— Ben Heubl, Data Visualisation Analyst