Costs are on everyone’s mind in China. United States Executives in China are seeing now more than ever that there is need for concern over rising costs in China, particularly the cost of labor, which has seen a huge increase over the past few years. While China was once thought to be the land of the cheap labor, new surveys show that the cost of labor is steeply rising; some businesses have experienced double-digit increases in the cost of labor.
The recent survey from the US-China Business Council stated that United States business executives in China claim the cost of human resources as their biggest challenge. The increases in the price of labor don’t stop there: according to the US-China Business Council, wages are expected to rise by about 5-10% next year alone.
Despite the rising cost of labor, a surprising 90% of survey responses indicated that they considered their business profitable, which is a record high.
If the assumption of rising cost of labor and the increased profitability holds, it will lead to economic expansion and as a result, the standard of living will improve.