Expert: The Era Of Low Wages In China Is Coming To An End.

"Lewis turning point" is approaching.

Over the past ten years, China's economy has continued to grow at a high level, but labor is still growing.

In the past ten years, with the rapid economic growth, technological innovation, and capital and capital intensive, the labor productivity of our manufacturing industry has also been greatly increased. The annual increase in labor productivity reached 20.8% from 1994 to 2008, while the annual wage rate of manufacturing industry was 13.2%.

Compared with most countries, the labor cost of our country is still very low, and the price of labor still has room for improvement.

Compared with the developed countries, the labor productivity of the second industry in China is equivalent to that of 1/16 in the UK, but the wages of employees are only 1/24, while the labor productivity is equivalent to that of the US 1/15, but the wage level is 1/20, and the labor productivity is equivalent to that of Japan's 1/16, but the wage level is 1/19.

Compared with the emerging countries, China's labor rate is equivalent to 1/4 in Korea, while the wage level is 1/9.

Compared with India, which belongs to the "BRICs", China's labor productivity is about 3 times that of India, but the wage level is 2 times more than that of China.

The contradictions in the current macro-economy are essentially the reflection of the imbalance of factor markets. They are the reflection of the low remuneration of labor factors and the high return of capital and other factors. Therefore, we must solve them from the labor force factor market.

However, it is still very difficult to make fundamental adjustments to the remuneration of labor.

The trigger mechanism of wage inflation spiral is conditional, that is, the monetary wage increase exceeds the growth rate of labor productivity.

Generally speaking, when the real wages and actual labor productivity increase synchronously, the increase of labor cost will be completely digested by the higher output of labor force, thus the labor cost and profit share the total output ratio.

The growth rate of nominal wages should be equivalent to the increase of actual labor productivity plus inflation rate. As long as labor productivity and wage increase synchronously or slightly higher than wage increases, wage inflation will not generate inflation or squeeze profit margins.

According to Japan's experience, after the "Lewis turning point" and the wage level rise, the labor productivity of Japanese manufacturing industry has been generally improved, and the average productivity of manufacturing industry in the 70s of last century has reached 10%.

Moreover, there is also a structural pformation within the manufacturing sector, and the low end manufacturing industry is facing a pformation to high-end manufacturing.

For example, in the 20 years from 1970 to 2000, the added value of Japanese textile industry accounted for 5.5% of the value added of manufacturing industry to 1.3%.

On the contrary, with the application of new technology, the high-end manufacturing industry has been developing rapidly. In the same period, the added value of the electrical machinery industry increased from 11% to 16%, and the proportion of metal products, general equipment and electronic equipment continued to improve, which smoothly realized the upgrading and pformation of the industry.

Therefore, the reduction of the scissors gap between wage increases and labor efficiency will not only cause the slowdown of China's economic growth, but will form a new driving force, so that China will gradually disappear while facing Lewis turning point and the first "demographic dividend". As a result of wage level rising, human capital accumulation and labor productivity increasing, economic development results will pform economic sustainable growth and shared growth through the promotion of human capital formation.