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This report has collected and assessed the available statistics on manufacturing labor compensation in China. Because non-city earnings data became available for the first time for the year 2002, it finally became possible to estimate all-China manufacturing labor compensation. The Ministry of Agriculture is responsible for supervising and collecting statistics on all the industrial enterprises located outside city limits in China. For the year 2002, one of their publications, the China Village and Town Enterprise Yearbook 2003, published, for the first time, two relevant numbers for the purposes of this report, the total number of TVE manufacturing employees in China for 2002, and the total earnings costs for 2002 for all those employees.

This report has combined employment and earnings data for China’s urban manufacturing workers and for the noncity TVE manufacturing workers in order to derive approximations of annual, monthly, and hourly labor compensation for urban, noncity, and all-China manufacturing employees. Reported earnings and labor compensation data have been adjusted separately to yield urban data and TVE data. As of 2002, the latest year for which adequate earnings data are available, average labor compensation for 30 million of China’s city manufacturing employees was approximately U.S.$0.95 per hour, while the reported 71 million manufacturing employees in TVE’s outside the cities averaged about U.S.$0.41 in labor compensation per hour of work. Combining the labor compensation of manufacturing workers in cities and in TVE’s to derive an all-China estimate results in an average labor compensation of approximately U.S.$0.57 per hour of work for 101 million manufacturing workers in China.

Because living costs are so low in China, this report also calculates the estimated take-home pay of manufacturing employees in international purchasing power parity dollars. China’s manufacturing workers in 2002 got cash income that would be similar to U.S. employees receiving take-home pay of just over U.S.$2 per hour in terms of what the money would purchase. China’s TVE manufacturing employees got cash income equivalent to less than U.S.$2 purchasing power and urban manufacturing employees received the equivalent take-home pay of almost U.S.$3 in terms of what they could buy.

The following items should have high priority for future data collection in China and future research on hourly labor compensation in China’s manufacturing sector:

  • 1.

    Data on hours worked. For the important goal of calculating average hourly labor compensation in manufacturing in China, a high priority is to get better data on actual hours worked by employees in the manufacturing sector. China’s government could itself gather and publish more systematic data on this important measure, and scholars should also emphasize gathering information on it.

  • 2.

    National economic census. During the year 2005, with reference year 2004, China conducted its first national census of the economy. This undertaking is expected to refine, correct, and update data on labor compensation received in manufacturing. When results of the economic census become available starting in late 2005, the new information should be used to update the estimates in this article.


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