This is a recent article from the Asia Times from January of this year. it explains that salaries are being driven up because the talent pool is shallow. Salaries for qualified workers will continue to rise, as long as the talent pool continues to be small.
BEIJING - Salaries in China surged last year and are expected to grow further this year, according to a survey.
The survey, conducted by global human-resources firm Mercer Human Resources Consulting, showed that wages in China rose an average 7.94% year on year in 2006. Mercer estimated that salaries would continue to increase by 7.7% in 2007. Wages in China's oil and information-technology (IT) industries saw a substantial increase of 8.3% last year. The survey covered 1,800 domestic and foreign-invested enterprises in industries including high tech, IT, pharmaceuticals, manufacturing, retail, automobiles, oil and finance.
Shanghai saw the strongest pay surge, with average wages increasing 7.7%. Guangzhou and Beijing followed at 7.6% and 7.2% respectively. For the high-tech industry, salaries increased in Shanghai, Guangzhou and Beijing by 7.3%, 6.9% and 6.5% respectively. Car-industry wages climbed 8.3%, 7.9% and 7.8% respectively in these three cities.
Mercer's survey was carried out in 13 Chinese cities including Beijing, Shanghai and Guangzhou, and second-tier cities such as Tianjin municipality, Nanjing, and Suzhou in eastern China's Jiangsu province, as well as Dalian in the northeastern province of Liaoning.
The survey also showed that salaries of mid-level managerial staff climbed 8.5%, much higher than the average of all employees interviewed. Middle managers' pay increased 8.7%, 8.6% and 8.4% in Shanghai, Guangzhou and Beijing respectively last year.
But despite higher pay, middle managers still tend to job-hop, according to the survey, indicating that they are the most sought-after employees in the job market.
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