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Reported manufacturing earnings in Chinese currency

Earnings and other compensation data for manufacturing workers in China are poorly and partially reported. The available data on “wages” or “earnings” come from the annual yearend reporting system, and the fragmentary figures are published in the China Labor Statistical Yearbook and, for TVE employees, in China Village and Town Yearbook 2003.101 Average annual remuneration for manufacturing workers is called “wages” (gongzi) when referring to “staff and workers,” but is called “earnings” or remuneration (laodong baochou) when referring to the other employees of urban manufacturing units. The two terms appear to mean the same thing, and both are defined as follows:

The total wages and total earnings are calculated this way: They include whatever is paid to or for the workers in money or in kind according to relevant regulations, including salaries paid for a certain time period or payments based on piece work, bonuses, allowances, subsidies, overtime pay, and pay for dangerous or challenging duty. 102

In this report, the term “earnings” designates the wages or earnings of both urban and TVE manufacturing employees in cash and in kind, as reported to statistical and tax authorities. The term does not include the social insurance payments that employers are required to pay to city or county authorities on behalf of their employees or the welfare fund payments given to employees in the enterprises. The terms “compensation” and “total compensation” include earnings plus these other elements of total labor compensation in manufacturing. These definitions correspond to the definitions used by the Bureau of Labor Statistics in its international report on hourly compensation costs.

Table 6 shows that the 30 million on-post employees of manufacturing enterprises in China’s cities had average reported earnings of 11,152 yuan for the year 2002.103 Of these employees, 95 percent were on-post (not laid-off or unemployed) “staff and workers” whose earnings that year averaged 11,001 yuan, and 5 percent were the 740,000 “other” city manufacturing workers who averaged much higher earnings of 17,237 yuan in 2002 (in part because this category includes foreign employees of China’s manufacturing companies and reemployed or still employed retirement-age workers with high seniority, and both these groups probably get higher earnings than the average for “staff and workers”).

The 11,152-yuan average annual earnings figure of the 30 million workers in manufacturing urban units masks a wide range of earnings in different urban manufacturing subsectors, as shown in table 7. For example, the lowest-paid group of city manufacturing workers is the 3 million textile industry workers, whose earnings average 7,268 yuan per year. The 5 million city manufacturing workers in the subsectors of timber and bamboo products, food processing, nonmetal mineral products, paper products, furniture manufacturing, and “other” manufacturing also earn less than the average urban worker: their reported average annual earnings are less than 9,000 yuan. At the other end of the pay spectrum, the 7.5 million city manufacturing workers in tobacco processing, electronics and telecommunications, petroleum processing, ferrous metal smelting, transport equipment manufacturing, and medical and pharmaceutical products all have average annual earnings of 13,000 yuan or higher.


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