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2013 Chinese Labor Forecast

December 4, 2012 Comments Off on 2013 Chinese Labor Forecast

Will your Christmas iPad purchase be a good investment now compared to later next year?

Maybe.  The Shenzhen area of China, where much of the high tech (think iPhone and laptops), as well as low tech (think flashing LED toys), electronic gadgets come from, will implement a mandatory 13% minuimun wage increase for workers in March 2013.   How much will this affect you? Read on for a brief 2013 Chinese labor forecast.

High tech technology, where labor is a smaller percent of the final product cost, ther shouldn’t be much impact.   However, low tech toys, where the margins are tighter and the labor is a higher percent of the final product cost, the hike will have a bigger impact.  This is not unusual, however.  Local Chinese governments raise the minimum wage at least once every two years.

This increase will bring the worker salary to approximately 1,700 RMB or about $268 per month, not including insurance and benefits such as food and housing (anthough sometimes they are not included).  The wage hike will take place just after the Chinese New Year, about March 1, 2013.

Notwithstanding, competition and new technology, your iGadgets are safe but be weary of the Dollar Stores stocks, their margins are getting pinched.

How do you feel about this?  Please comment.

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