• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 7 hours One Last Warning For The U.S. Shale Patch
  • 54 mins Once Upon A Time... North Korea Abruptly Withdraws Staff From Liaison Office
  • 6 hours Oil Slips Further From 2019 Highs On Trade Worries
  • 3 hours Chile Tests Floating Solar Farm
  • 4 hours Poll: Will Renewables Save the World?
  • 2 hours Modular Nuclear Reactors
  • 13 hours China's E-Buses Killing Diesel Demand
  • 9 hours China's Expansion: Italy Leads Europe Into China’s Embrace
  • 13 hours Trump sells out his base to please Wallstreet and Oil industry
  • 24 hours Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 23 hours Trump Tariffs On China Working
  • 1 hour US-backed coup in Venezuela not so smooth
  • 7 hours New Rebate For EVs in Canada
  • 22 hours Biomass, Ethanol No Longer Green
Alt Text

Did Venezuela Just Default?

S&P Global Ratings declared Venezuela…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Trending Discussions

Rampant Wage Inflation Strikes China

I rely on hundreds of “moles” around the world whose job it is to watch a single, but important indicator for the world economy. One of them checks for me the want ads in the manufacturing mega city of Shensen, China, and what he told me last week was alarming.

Wage demands by Chinese workers have been skyrocketing this year. The biggest increases have been at the low end of the spectrum, where migrant workers from the provinces are earning up to 40% more than a year ago. Wage settlements of 20% or more for trained workers are common. One factory that gave staff only a 10% increase saw many of them fail to return after the recent Chinese lunar New Year.

Of course China’s blistering 9%-10% GDP growth is to cause, which has pushed inflation well beyond the government’s 4% target. So the cost of living in the Middle Kingdom is rising dramatically. The problem has been particularly severe with imported commodities, such as in food. Hence, the increased demands.

This is important for the rest of us because low wages have been the cornerstone of the Chinese economic miracle. In just the last decade, average monthly Chinese wages have climbed from the bottom rung to the middle tier. That seriously erodes the country’s cost advantage, which has gained it such enormous shares in foreign markets, like the US. Take away the country’s price advantages, and demand will wither, slowing growth globally.

What will they be demanding next? Collective bargaining rights?  In the meantime, keep checking those Craig’s List entries for Shanghai.

Average Monthly Salary

$3,099 Yokohama, Japan
$1,220 Seoul, South Korea
$888 Taipei, Taiwan
$235 Shensen, China
$148 Jakarta, Indonesia
$100 Ho Chi Minh City, Vietnam
$47 Dhaka, Bangla Desh

By. Mad Hedge Fund Trader




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment
  • Anonymous on April 21 2011 said:
    For the fourth time this year China's central bank announced Sunday the biggest Chinese banks must hold greater cash reserves. China's financial leaders are struggling to keep inflation in check. A world addicted to cheap manufactured goods from China could possibly be in for a shock. Meanwhile, Donald Trump, pandering for a presidential bid, proposed a 25 percent tariff on Chinese imports that was roundly ridiculed by economists. I read this here: China struggles to curb inflation that threatens global growth

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News