China’s Rising Labor Cost: Myths and Realities

Abstract: This paper examines whether China’s labor cost is too high and rising too fast from the five aspects of macro distribution, corporate cost structure, labor productivity, labor cost structure and international comparison, shedding light on the real causes of rising labor cost. On the basis of our analysis, we propose a few policy recommendations on China’s macroeconomy and corporate development.

Keywords: labor compensation, corporate cost, macro distribution, burden of taxes and fees, operational efficiency

JEL classification: D33, J58, O15