German companies in China expect significant wage increases in 2013 as competition intensifies to retain qualified staff, especially blue-collar workers, in second-tier cities, the German Chamber of Commerce in China said on Thursday.
"German firms in China will see a wide range of wage increases in 2013," the chamber said in its Flash Survey on Wage Trends report, which polled 452 companies from March 4 to 11.
"While some companies don't plan to increase wages at all or only at very low levels, others are facing severe competition to retain qualified staff and need to substantially increase wages by up to 50 percent for some positions," it added.
Salaries for blue-collar workers are expected to increase 9.9 percent year-on-year on average in 2013, while the wages of white-collar workers are expected to increase 8.8 percent, the survey said.
German companies expected a wage increase of 8.1 percent year-on-year in 2012, compared with the 10.2 percent wage rise in 2011, the chamber said in its 2012 Annual Salary Survey Report conducted in September last year with 220 companies.
"The labor market remains tight, providing employees with good bargaining power for higher wages. This is especially the case for highly skilled employees. Qualified job candidates can easily realize wage rises of 20 to 40 percent when switching jobs," this year's report said.
"Traditional migrant workers continue to see the employment situation in western and central regions improve as GDP and wage growth outpace that of the coastal regions. After the growth slowdown in 2012, the economy is expected to accelerate in 2013, putting further pressure on already tight labor markets," it added.
Fan Jianping, chief economist at the State Information Center, a government think tank, said: "Chinese labor costs were undervalued in the past because of oversupply. But in recent years, blue-collar and skilled workers are in short supply."
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