Manufacturing in China
Background
Acknowledging the importance of China as one of the United States' largest trading partners, BLS has undertaken the development of estimates of hourly compensation costs in manufacturing for that country. Data are published in the BLS “International Comparisons of Hourly Compensation Costs in Manufacturing" news release and are also shown below. Compensation costs for China are not directly comparable with the data for other countries found in this release and therefore are presented separately.
A description of the methods used to construct the estimate for 2002 and data comparability issues can be found in "Manufacturing Earnings and Compensation in China" in the August 2005 Monthly Labor Review (MLR). In general, the methods used to prepare the hourly compensation costs data for later years are the same as those used in this article. The estimates for later years are presented in subsequent MLR articles (see Publications below).
Data Comparability
The concepts and coverage of China's published statistics on manufacturing employment and wages often do not follow international standards and can be difficult to understand. Some of the difficulty relates to the separate reporting of data from urban units and from town and village enterprises (TVEs) in nonurban areas. Estimates of total employment and average hourly compensation costs for China's manufacturing sector are constructed by combining ample urban data with less plentiful figures on TVE manufacturing. Important gaps in the TVE data are filled by estimating nonwage components of labor compensation as well as hours worked per year.
Generally, China has not systematically collected and reported adequate data on actual hours worked by manufacturing employees for any full year. BLS uses published partial labor force survey information and a set of hypotheses to estimate annual hours worked by urban and TVE manufacturing employees, thus calculating approximations of average hourly compensation in manufacturing for these two categories of manufacturing employees and for China as a whole (see Table 1 and Table 2 below).
The difference between urban and TVE hourly compensation costs continues to be one of the central features of Chinese compensation. Because more than two-thirds of China's manufacturing employees are categorized as TVE workers, total manufacturing compensation in China more closely reflects the compensation costs of TVE workers than it does urban unit compensation costs.
Largely because of these data gaps and challenges, BLS national estimates for China cannot be considered as robust as the manufacturing statistics for most developed economies. Yet the accumulated evidence to date, including China's First National Economic Census, supports the general validity of the BLS annual calculations on China's manufacturing employment and labor compensation.
Data Tables
Table 1. Hourly compensation costs of manufacturing employees in China, 2002-2008
| Year
| National currency basis
(Yuan)
| U.S. dollar basis
(US$)
| Index1
(US = 100)
|
| 2002 |
4.74 |
0.57 |
2.1 |
| 2003 |
5.17 |
0.62 |
2.2 |
| 2004 |
5.50 |
0.66 |
2.3 |
| 2005 |
5.95 |
0.73 |
2.4 |
| 2006 |
6.44 |
0.81 |
2.7 |
| 20072 |
8.06 |
1.06 |
3.4 |
| 2008 |
9.48 |
1.36 |
4.2 |
1 The index represents hourly compensation costs in China as a percent of hourly compensation costs for all employees in U.S. manufacturing.
2 Break in series. Data for town and village enterprises (TVEs) include self-employed workers prior to 2007. Data for 2007 and 2008 exclude self-employed workers.
SOURCES: U.S. Bureau of Labor Statistics, "International comparisons of hourly compensation costs in manufacturing, 2008,"
August 26, 2010, available at www.bls.gov/news.release/pdf/ichcc.pdf. Erin
Lett and Judith Banister, "China's manufacturing employment and compensation costs: 2002-06," Monthly Labor Review,
April 2009, p.35, available at www.bls.gov/opub/mlr/2009/04/art3full.pdf
Table 2. Hourly compensation costs of manufacturing employees in China, by type of enterprise, 2002-2008
| Type of enterprise |
Yuan |
| 2002 |
2003 |
2004 |
2005 |
2006 |
20071 |
2008 |
Total, manufacturing urban units and TVEs2
Manufacturing urban units
Manufacturing TVEs |
4.74
7.87
3.40 |
5.17
8.86
3.63 |
5.50
9.86
3.73 |
5.95
10.63
4.05 |
6.44
11.73
4.24 |
8.06
13.89
4.89 |
9.48
16.53
5.67 |
| |
U.S. dollars |
| 2002 |
2003 |
2004 |
2005 |
2006 |
20071 |
2008 |
Total, manufacturing urban units and TVEs
Manufacturing urban units
Manufacturing TVEs |
0.57
0.95
0.41
|
0.62
1.07
0.44
|
0.66
1.19
0.45
|
0.73
1.30
0.49
|
0.81
1.47
0.53
|
1.06
1.83
0.64 |
1.36
2.38
0.82 |
1 Break in series. Data for town and village enterprises (TVEs) include self-employed workers prior to 2007. Data for 2007 and 2008 exclude self-employed workers.
2 "TVEs" stands for Town and Village enterprises
SOURCES: U.S. Bureau of Labor Statistics, "International comparisons of hourly compensation costs in manufacturing, 2008,"
August 26, 2010, available at www.bls.gov/news.release/pdf/ichcc.pdf. Erin
Lett and Judith Banister, "China's manufacturing employment and compensation costs: 2002-06," Monthly Labor Review,
April 2009, p.35, available at www.bls.gov/opub/mlr/2009/04/art3full.pdf
Charts
Chart 1. Hourly compensation costs of manufacturing employees in selected economies and regions, 2008
NOTE: Hourly compensation cost estimates for China are not directly comparable with estimates for other countries. "East Asia excluding Japan" comprises the Republic of Korea, the Philippines, Singapore, and Taiwan. "Euro Area" refers to European Union member countries that had adopted the Euro as the common currency as of January 1, 2009.
SOURCES: U.S. Bureau of Labor Statistics, "International comparisons of hourly compensation costs in manufacturing, 2008,"
August 26, 2010, available at www.bls.gov/news.release/pdf/ichcc.pdf.
Publications
- China's employment and compensation costs in manufacturing through 2008 (PDF)
- International Comparisons of Hourly Compensation Costs in Manufacturing (PDF)
- "China's manufacturing employment and compensation costs: 2002-06," (PDF) by Erin Lett and Judith Banister, Monthly Labor Review, April 2009, pp. 30-38.
- "Labor Costs of Manufacturing Employees in China: An Update to 2003-04," (PDF) by Erin Lett and Judith Banister, Monthly Labor Review, November 2006, pp. 40-45.
- Manufacturing Employment and Compensation in China. (PDF) (Revised November 2005) by Judith Banister under contract to the Bureau of Labor Statistics. Please note: The opinions, analysis, and conclusions expressed in the report are solely those of the author.
- "Manufacturing Earnings and Compensation in China," (PDF) by Judith Banister, Monthly Labor Review, August 2005, pp. 22-40.
- "Manufacturing Employment in China," (PDF) by Judith Banister, Monthly Labor Review, July 2005, pp. 11-29.
Last Modified Date: April 4, 2011
