Newly Hired Workers' Wages in China Decline... "Deflation Risk Intensifies"

Wages for newly hired workers in major Chinese cities have reportedly declined. This gloomy employment market is expected to reduce spending and increase the risk of deflation.

On the 3rd (local time), Bloomberg reported that in the fourth quarter of last year, the average salary paid by companies to new hires in 38 major Chinese cities was 10,420 yuan (approximately 1,906,026 won), down 1.3% from the same period the previous year. This figure was recalculated by Bloomberg using data from the online recruitment platform Zhaopin. The decline is the worst since the platform began conducting salary surveys in 2016.

[Image source= Xinhua News Agency]

Salaries have shown a continuous decline through the second (-0.7%), third (-0.5%), and fourth quarters of last year. In particular, Beijing saw a 2.7% decrease compared to the same period last year, marking four consecutive quarters of decline, while Guangzhou, the manufacturing hub, experienced a 4.5% drop.

Bloomberg stated, "These data emphasize the growing risk of deflation that China will face this year," adding that "it burdens China's growth outlook." It further explained, "The gloomy employment market implies that residents may reduce spending, which adds downward pressure on consumer prices that are already falling at the fastest pace in three years."

The downward trend in wages is also seen as a negative sign for the real estate market, which is enduring its worst recession ever. With uncertain income prospects, households may postpone home purchases or avoid mortgage loans.

China's consumer price index (CPI) in November last year fell 0.5% year-on-year, marking the second consecutive month of decline following a 0.2% drop in October. After a 0.3% decrease in July last year, the CPI briefly rose in August but has since been on a downward trend.

This content was produced with the assistance of AI translation services.