Significant wage rises expected by German firms (2)

The chamber's survey also found that wage rises in second-tier cities are increasing at a faster pace as the gap with first-tier cities narrows. And that trend is stronger in northern and southern regions.

Manufacturing wages are picking up faster than wages in the non-manufacturing or services sectors, which "typically have higher wage levels and find it harder to make productivity gains," said the report.

Overall export-oriented manufacturing companies reported plans for the highest wage increases, which may be explained by the fact that 57 percent of these companies are located in second-tier cities, according to the report.

"Wage increases have become the most serious issue to my company in addition to the renminbi appreciation. And profits are now smaller and smaller. Wages in my company will increase 6 to 9 percent this year and the rise will be maintained in the next three to five years with a slower pace," said Stefan Rosenbohm, technical director of Shenzhen Giesecke & Devrient Currency Automation Systems Co Ltd.

Overall, nearly half of the polled companies said that they have a "neutral" stance regarding the wage increases when considering productivity increases and the companies' performances. However, nearly 40 percent said that the wage increases are "high" or "very high".

"These results show that most firms can compensate for the near double-digit wage increases with productivity increases and/or healthy business growth. But companies which are experiencing difficulties will quickly feel the increasing costs affecting their profitability," said the report.