Salaries paid to employees in China fell by the greatest amount ever, highlighting the continued deflationary pressures and low consumer confidence in the second-largest economy in the world.
Salaries paid to employees in China fell by the greatest amount ever, highlighting the continued deflationary pressures and low consumer confidence in the second-largest economy in the world.
In the fourth quarter of 2023, the average salary enterprises in 38 major cities in China provided to new hires decreased by 1.3% from the previous year to 10,420 yuan (S$1,938). Based on statistics collated by Bloomberg from the online recruitment portal Zhaopin, that was the greatest decline since at least 2016.
Additionally, this is the longest run of declines—three straight quarters—since statistics on annual changes began to be collected in 2016.
It was Beijing’s fourth consecutive quarter of pay reduction, with wages down 2.7% from a year ago. In Guangzhou, the southern metropolis, salaries decreased by 4.5%.
The data emphasizes China’s growing deflation risks through 2024, negatively impacting its development prospects. Residents may cut back on their spending due to a bleak job environment, which would further pressure consumer prices, which are already declining at the fastest rate in three years.
It is also ominous for the real estate sector, prolonging its longest downturn. Families may continue to put off buying a house and also avoid taking out mortgages if income prospects remain uncertain.
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