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MANUFACTURING EMPLOYMENT AND COMPENSATION IN CHINA - page 7 / 106

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EXECUTIVE SUMMARY

The goals of this report are to assess the quality and usability of available statistics on China’s manufacturing employment and labor compensation for the most recent available year and for the period since 1990 and, if possible, to estimate annual, monthly, and hourly labor compensation for China’s manufacturing employees. The report shows that China has released just enough relevant data on annual average wages and labor-related employer expenditures to derive 2002 estimates of annual labor compensation for 30 million city manufacturing employees and 71 million non-city manufacturing employees, that is, those working in village and town enterprises. Combining the published and adjusted labor compensation figures for these two groups results in an approximation of average 2002 labor compensation per manufacturing employee in China. Because China has not systematically collected and reported adequate data on actual hours worked by manufacturing employees in 2002, or for any full year, this report uses published partial information and a set of hypotheses to estimate annual hours worked by city and noncity manufacturing employees, thus calculating reasonable approximations of average 2002 hourly labor compensation in manufacturing for these two categories of manufacturing employees and for China as a whole. Labor compensation estimates are converted into U.S. dollars at the 2002 prevailing commercial exchange rate, resulting in the estimate that China’s manufacturing employees in 2002 received approximately U.S.$0.57 in total labor compensation per hour of work. Cash income of China’s manufacturing workers is also estimated in international purchasing power parity (PPP) dollars to give a sense of the real purchasing power of the pay of China’s manufacturing employees in their own domestic economy.

Much of this report is focused on discussing issues of data quality and serious problems of incompleteness of the available data and excessive focus of published statistics on city manufacturing employees to the near-exclusion of data on the more numerous manufacturing employees working outside the administrative boundaries of cities. Even within the cities, China’s Ministry of Labor and Social Security and the National Bureau of Statistics focus their data collection and reporting on the rapidly declining state-owned and urban collective-owned manufacturing enterprises, while not yet adequately expanding their efforts to collect statistics on the thriving, growing, dynamic private manufacturing sector. Outside city boundaries, where most of China’s manufacturing employees are working, collection and reporting of statistics seems to be the job of the Ministry of Agriculture and its sub-unit on village and town enterprises (TVE’s). This division of statistical responsibility is a holdover from the command economy of the pre-1978 period. It results in the near-absence of reported statistics on the numbers and labor compensation of manufacturing workers in China’s industrial parks, suburbs, towns, rural areas, and any other concentrations of manufacturing enterprises and suppliers that are located outside city boundaries.

Data on manufacturing employees and their wages in China come from regular administrative reporting systems that are supposed to cover all employees, rather than from labor surveys as in most developed countries. This report compares these

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