a member-exclusive report labor market & salary report ......& salary report in partnership...
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In partnership with
Brief Edition
Labor Market & Salary Report
A Member-Exclusive Report
2020 | 2021
GERMAN CHAMBER OF COMMERCE IN CHINA
www.china.ahk.de/chamber
2020 | 2021
Labor Market & Salary Report
© 2020 by the German Chamber of Commerce in China. Thank you for not reproducing this report either in part or in full
without prior consent of the German Chamber of Commerce in China.
While every effort has been made to provide accurate information in the preparation of this report no responsibility or
liability is accepted for errors or omissions of fact or for any opinions expressed herein. Opinions, projections and estimates
are subject to change without notice. This report is for information purposes only. In no event shall the German Chamber of
Commerce in China, Direct HR or their employees be liable for any losses or other consequential, incidental, exemplary or
special damages relating in whole or part to the use of information contained in this report.
Cover picture by Denys Nevozhai on Unsplash
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Content
Executive Summary
General Results Overview
I. Labor Market Environment
1. Chinese Economy amid COVID-19
2. Labor Market Developments
II. Wage Developments in China
1. Wage Developments
2. Minimum Wages and Wage Guidelines
III. Survey Results
1. Company Measures Amid COVID-19
2. Effective and Expected Wage Developments at German Companies
3. Detailed Wage Developments
4. Wage Levels
5. Compensation Levels: Perception
6. Productivity
7. Wage Determination
8. HR and Recruitment Challenges
9. Employee Turnover & Additional HR Data
10. Foreign Employees
11. About the Survey
12. Profile of Contributors
IV. Compensation Data
1. Introduction
2. Wages and Wage Increases
3. Segmentation Variables
4. Region
5. East
6. North
7. South & Southwest
8. City Tier
9. Industry
10. Company Size
11. Total Cost per Employee: Median and Percentiles
V. Definitions
VI. References
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To access specific compensation data, please contact:
Ms. Philippa Hungar
Project Manager Communications
German Chamber of Commerce in China | Shanghai
Tel.: +86 21 5081 2266 Ext. 1846
CONTACT
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Figures
Figure ES.1
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Figure ES.3
Figure 1.1
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Figure 2.1
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Figure 3.13
Figure 3.14
Figure 3.15
Figure 3.16
Figure 3.17
Figure 3.18
Figure 3.19
Figure 3.20
Expected Wage Growth Development at German Companies in China
Expected & Effective Wage Increases in China
Measures Taken Due to COVID-19
GDP Growth China
Contribution to GDP by Sector
Contribution to GDP and Growth by Industry
Business Operation Expectations of German Companies in June 2020
Growth of Retail Sales, Fixed-Asset Investment & Production
Retail Sales of Consumer Goods 2020
Business Sentiment 2020
Impact of COVID-19 on German Companies’ Revenue in H1 2020
China's Age Demographic Composition of Population
Urban Unemployment Rate 2020
Migrant Workers Distribution of Employment by Sector
Migrant Workers Distribution of Employment by Industry
MOHRSS Job Vacancies to Job Seekers
Average Wage and Wage Growth
GDP and Wage Growth
Disposable Income of Chinese Residents
Average Wage Developments 2010-2018
Wage Level by Province
Wage Developments by Industry 2019
Regional Wage Increase Guidelines 2020
Minimum Wage Rates in China 2020
Measures Taken Due to COVID-19
Expected Wage Growth Development at German Companies in China
Expected & Effective Wage Increases in China
COVID-19 Impact on Actual Wage Growth Development at German Companies in China in 2020
COVID-19 Impact on Expected Wage Growth Development at German Companies in China in 2021
Measures Taken Due to COVID-19 with Impact on Compensation
Wage Developments by Region
Wage Developments by City Tier
Wage Developments by Industry
Wage Developments by Company Size
Regional Wage Developments by Production Workers and Level of Seniority
Detailed Industry Wage Developments
Measures Taken Due to COVID-19 by Industry
Expected and Effective Wage Increases 2020
Wages at Regional Level
Comparison of Wages by Industry
Comparison of Wages at Industry Level
Comparison of Wages by Company Size
Comparison of Wage Level by Production Workers, Level of Seniority & Senior Management
Perceived Salary Level of Blue-Collar Workers in Comparison to Other Companies
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Figure 3.48
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Figure 3.51
Perceived Salary Level of White-Collar Workers in Comparison to Other Companies
Evaluation of Wage Levels Considering Productivity
Share of Labor Costs over Total Costs
Main Factors for Productivity Increase
Main Factors for Productivity Increase by Company Size
Strategic Changes due to Rising Labor Costs
Strategic Changes Due to Rising Labor Costs by Company Size
Strategic Changes Due to Rising Labor Costs by Perception on Salaries
Importance of Factors for Wage Adjustments
Importance of Factors for Wage Negotiations
Impact of HR Related Challenges on Business Operations
Strategies for Retaining Qualified Staff
Evaluation of Local Staff Skills
Effort Needed to Train Staff
Most Difficult Positions to Recruit
Reasons Why Positions Cannot Be Filled
Last Year’s Employee Turnover and HR Data
Employee Turnover Due to COVID-19 in 2020
Share of Companies Employing Foreigners
Average Percentage of Foreign Employees
Intentions to Replace Foreign Employees with Local Employees
Reasons for Replacing Foreign Employees with Local Employees
Common Type of Contracts for Foreign Employees
Evaluation of Visa Process
Regional Distribution of Survey Participants
Distribution of Contributors by City Tier
Distribution of Contributors by Industry
Distribution of Contributors by Company Size
Main Focus of Contributor’s Activity
Profile of Contributors by Role
Profile of Contributors by Nationality
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▪The total cost per employee (TCE) among German
companies in China has a median value of RMB 15,317 /
month.
▪The expected salary growth for 2021, as well as the actual
salary growth for 2020, remains below the respective
projections for 2020 across all regions. However, in certain
regions (Taicang and Kunshan, other Pearl River Delta), the
outlook for next year seems more favorable, with salary
growth projections for 2021 that are above the reported
effective wage growth rates this year.
▪Among the seven factors for wage negotiations surveyed in
this report, individual negotiations remains by far the most
important factor, followed by the impact of COVID-19.
EXECUTIVE SUMMARY
Wage Developments at German Companies
▪The expected salary growth for 2021 among German
companies in China averages 3.79 percent, a 1.74
percentage points (p.p.) expected decrease from 2020 - the
lowest expected salary growth and strongest decrease ever
recorded by the German Chamber of Commerce in China
(Figure ES.1).
Figure ES.1: Expected Wage Growth Development at
German Companies in China
2012-2021, Nominal Growth, in %
10.20
8.90 8.808.10
7.106.23 5.90 5.99
5.53
3.79
2012 2013 2014 2015 2016 2017 2018 2019 2020 20212021
In each edition, the expected wage growth is the average of all the individual positions’expected wage growth collected in the survey. In 2020, with a total of 576 companies and39 different roles, the number of observations collected amounted to 7,307.
Figure ES.3: Measures Taken Due to COVID-19
Measures Taken by German Companies, in %
51.2
46.0
44.3
35.9
26.4
20.7
16.1
14.9
12.3
11.1
10.6
8.9
7.1
Hiring Stop
Remote Work
Use HR Government Measures
Cut Planned Trainings
Obligatory Annual Leave
Cut Bonus/Appraisals
Digitalization of Work Processes
More Training Opportunities
Cut Extra Benefits
Lay-Off
Temporary Reduction GBS
Changing Long-term HR Strategy
Annual Reduction GBS
Sample: 576 companies. Multiple answers allowed per contributor. “Cut extra benefits”may include the following: supplementary health insurance, life insurance, overtime,children allowances, meal and transportation allowances, supplementary housing funds,retention bonuses. GBS: Gross Base Salary.
Figure ES.2: Expected & Effective Wage Increases in China
2020-2021, in %
5.53
4.033.79
Expected 2020 Expected 2021Effective 2020
▪ The effective wage growth in 2020 averages 4.03 percent,
1.50 p.p. below the projected 5.53 percent for 2020 (Figure
ES.2).
▪ In addition to the traditional downward trend in wage
growth developments, this year companies faced the impact
of COVID-19 on wage developments: 66.5 percent report
that the pandemic has a medium to high impact on the
actual salary growth for 2020, and 67.0 percent report the
pandemic has a medium to high impact on their projections
for 2021.
▪German companies have taken certain measures to mitigate
the impact of COVID-19 on their organization. The most
common initiatives have been: hiring stops (51.2 percent);
introduction of alternative work arrangements, such as
remote work (46.0 percent); and the usage of HR
government support measures (44.3 percent). Some
companies report laid-off personnel (11.1 percent) or
reduced salaries, either temporarily (10.6 percent) or
permanently (7.1 percent) (Figure ES.3).
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Total Cost per Employee: RMB/month, for a 12-month based year. P25: Percentile 25, compensation level below which 25 percent of the observations concentrate; Median: level ofcompensation that divides the distribution in two equal parts; P75: percentile 75, compensation level below which 75 percent of the observations concentrate. Wage Increases: data inpercentage. * There are 13 companies, that belong to the Other North region (outside Shenyang, Dalian, and Changchun) for which data is not presented due to limited sample size.
P75: 28,250
Median: 16,000
P25: 10,000
SHENZHEN 24 Companies
Total Cost per Employee
Wage Increases
260 data points
6.74
3.883.86
2020 2021
Forecast Effective
P75: 18,000
Median: 10,035
P25: 7,233
OTHER PRD 32 Companies
Total Cost per Employee
Wage Increases
506 data points
5.55
4.003.80
2020 2021
Forecast Effective
MAXmin
Minimum value in a distribution
Maximum value in a distribution
P25 P75
25% of observations
50% of observations
75% of observations
Median
100% of observations
P75: 22,119
Median: 12,000
P25: 8,041
GUANGZHOU 17 Companies
Total Cost per Employee
Wage Increases
224 data points
6.63
3.55
4.97
2020 2021
Forecast Effective
P75: 34,101
Median: 20,000
P25: 11,700
BEIJING 57 Companies
Total Cost per Employee
Wage Increases
513 data points
5.82
3.914.38
2020 2021
Forecast Effective
GENERAL RESULTS OVERVIEW
P75: 28,000
Median: 15,558
P25: 9,864
TIANJIN 28 Companies
Total Cost per Employee
Wage Increases
414 data points
5.35
4.124.82
2020 2021
Forecast Effective
P75: 28,250
Median: 15,000
P25: 9,663
SHENYANG 16 Companies
Total Cost per Employee
Wage Increases
180 data points
5.24
4.194.93
2020 2021
Forecast Effective
P75: 24,950
Median: 13,000
P25: 8,352
TAICANG 36 Companies
Total Cost per Employee
Wage Increases
506 data points
5.19
4.09
3.18
2020 2021
Forecast Effective
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P75: 22,000
Median: 12,000
P25: 8,000
KUNSHAN 14 Companies
Total Cost per Employee
Wage Increases
302 data points
3.81 3.723.17
2020 2021
Forecast Effective
P75: 34,000
Median: 20,000
P25: 12,500
SHANGHAI 234 Companies
Total Cost per Employee
Wage Increases
2,465 data points
5.57
3.864.08
2020 2020
Forecast Effective
P75: 24,031
Median: 12,460
P25: 8,000
SUZHOU 32 Companies
Total Cost per Employee
Wage Increases
511 data points
4.90
3.153.61
2020 2021
Forecast Effective
P75: 22,000
Median: 12,725
P25: 8,556
OTHER YRD 55 Companies
Total Cost per Employee
Wage Increases
934 data points
5.80
3.51
4.47
2020 2021
Forecast Effective
P75: 28,008
Median: 15,317
P25: 9,500
CHINA 576 Companies*
Total Cost per Employee
Wage Increases
7,289 data points
5.53
3.794.03
2020 2021
Forecast Effective
P75: 26,000
Median: 12,000
P25: 8,400
DALIAN & CHANGCHUN 18 Companies
Total Cost per Employee
Wage Increases
287 data points
4.90
3.523.72
2020 2021
Forecast Effective
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I. LABOR MARKET ENVIRONMENT
1. Chinese Economy amid COVID-19
The COVID-19 pandemic has caused a global recession and
affected jobs and social welfare worldwide. The Chinese
economy suffered a substantial hit, reporting a gross
domestic product (GDP) decline of 6.8 percent year-on-year
(YoY) for the first quarter of 2020. Since the People’s
Republic of China’s (China) policy of reform and opening up,
it was the first negative GDP development recorded. The
economic growth of 3.2 percent of the second quarter of
2020 hints toward a gradual recovery of the economy (Figure
1.1).
Overall, China experiences a significant economic slowdown
in 2020. Whereas in 2019, GDP grew by 6.1 percent,
fulfilling the growth target for the year (between 6.0 to 6.5
percent), this year, due to the pandemic and the uncertainty
it brought, Premier Li Keqiang announced to abandon the
growth target for 2020 (Li, 2020). The World Bank (2020)
forecasts a 1.6 percent GDP growth for 2020 for China,
marking the country’s slowest growth rate since 1976.
The sector hardest hit by the pandemic in the first quarter of
2020 was the secondary sector, experiencing YoY GDP
decline of 9.6 percent. It also contributed only 35.6 percent
to the total GDP, showing a temporary decrease compared to
previous quarters (Figure 1.2). As in previous years, the most
dynamic sector continues to be the tertiary sector,
contributing to over 55 percent of the total GDP in the first
half of 2020 (Figure 1.2). Nevertheless, the tertiary sector
also experienced negative GDP growth of 5.20 percent in the
first quarter of 2020.
Even though the economic growth of the second quarter of
2020 (3.2 percent) indicates a gradual recovery of the
economy, it is recovering unevenly. In the first half of 2020,
the information, software, and information technology
services, here summarized as information and technology
services (ICT), showed the highest YoY growth with 14.5
percent. The recovery was led by industrial production,
contributing to almost one-third of the GDP (31.7 percent) in
the first half of 2020. Hotel and catering services saw the
most severe decline, with a negative YoY growth of 26.8
percent, followed by wholesale and retail trades with a YoY
decline of 8.1 percent for the H1 of 2020 (Figure 1.3). These
figures show that the COVID-19 pandemic hit services
involving face-to-face interactions particularly hard, most
likely caused by restrictions on service activity and behavioral
changes (World Bank, 2020).
Figure 1.1: GDP Growth China
2012-2020, Quarterly Data, in %
TertiarySecondaryPrimary
2017 2018
Q1 Q2
2020
6.0
31.8
6.29.3
4.11.4
9.3 7.44.1 3.1
17.4
1.1
-1.8 -2.5 -1.9-8.1 -5.6
-26.8
6.6
-0.9
14.5
-8.7
-1.4
Figure 1.3: Contribution to GDP and Growth by Industry
First Half 2020, in %
Year-on-year GrowthContribution to GDP
2012 2013 2014 2015 2016 2017 2018 2019
3.2
2020 Q1
2020 Q2
7.9
20
12
Q4
20
15
Q4
20
19
Q4
6.0
-6.8
6.9
2020
Source: National Bureau of Statistics China (NBS). Preliminary accounting results for 2020.
Figure 1.2: Contribution to GDP by Sector
2016-2020, Quarterly Data, in %
Source: NBS. Data is cumulative: the contribution to GDP from a sector in a quarter forany given year includes the previous quarter/s within that year.
56
.5
54
.0
52
.8
51
.6
56
.3
54
.0
50
.7
48
.7
56
.6
52
.3
51
.0
49
.1 57
.3
52
.8
52
.3
50
.8 59
.4
54
.0
38
.0
39
.5
39
.6
39
.9 38
.9
40
.2
40
.2
41
.0 39
.0
41
.7
40
.4
41
.1 38
.6
41
.1
39
.7
39
.3 35
.7
39
.6
50
%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016
Q1 Q2 Q3 Q4
2019
Ag
ricu
ltu
re
Man
ufa
ctu
rin
g
Co
nst
ruct
ion
Wh
ole
sale
&
Re
tail
Tra
de
s
Tra
nsp
ort
atio
n
Ho
tel &
Cat
eri
ng
S
erv
ice
s
Fin
an
ce
Re
al E
stat
e
ICT
Bu
sin
ess
S
erv
ice
s
Oth
er
Se
rvic
es
Ind
ust
ry
Source: NBS.
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Mar Apr Jun Jul
The GDP figures reflect the challenges brought about by
COVID-19 in the first quarter, extending into the second
quarter of 2020. In order to contain the spread of COVID-
19, Chinese authorities implemented measures such as travel
restrictions across provinces and cities, as well as local
quarantine regulations. These measures resulted in a
shortage of qualified staff and disrupted supply chains. On
27 February 2020, the German Chamber of Commerce in
China and the European Union Chamber of Commerce in
China released a joint survey on the effects of COVID-19 on
European business in China. 47 percent of the surveyed
companies reported staff shortages. Migrant workers, that
represent a significant part of the workforce in China, were
unable to return to their workplaces after Chinese New Year
due to domestic travel restrictions. The shortage of staff had
a major impact on production: Companies that started
production in February operated on limited staff capacity.
Furthermore, nearly 50 percent of European companies in
China reported disruptions in logistics, impacting their
business activities.
By April 2020, however, companies indicated a change for
the better. According to the German Chamber of Commerce
in China’s second survey on COVID-19’s future impact on
German businesses, 67 percent of German enterprises
reported staffing rate returned to normal. Almost 60 percent
of the companies resumed production, and another 30
percent expected a return to pre-pandemic levels by the end
of Q2. These results could be explained by the easing of
domestic travel restrictions and the resumption of production
and business activities.
Yet while domestic supply is recuperating, the domestic and
global demand is putting a strain on economic recovery. In
June 2020, only around one-quarter of surveyed German
enterprises reported that demand and sales have returned to
normal, meaning to pre-COVID-19 levels (Figure 1.4).
According to the World Bank (2020), the effects of income
losses and labor dislocation cause consumers to exercise
restraint.
These developments are also reflected in the YoY retail sale
growth, published by the National Bureau of Statistics, China
(NBS), amounting to negative 20.5 percent in
January/February 2020. Also, the fixed-asset-investment
declined in January/February by 24.5 percent YoY. Until
June 2020, both indicators are showing negative YoY growth,
whereas industrial production recovered in March 2020,
stating positive YoY growth (Figure 1.5).
Figure 1.5: Growth of Retail Sales, Fixed-Asset
Investment & Production
2019 -2020, YoY Monthly Growth, in %
Fixed-asset investment YoY (monthly)
Industrial production YoY (monthly)
Retail sales YoY (monthly)
Source: NBS. Retail sales and industrial production growth rates compared to the same period last year. Data is cumulative for fixed-asset investment (total amount of money invested in the construction and purchase of fixed assets).
-30%
-20%
-10%
0%
10%
20%
DecAgo Sep Oct Nov
2019 2020
4.8
-1.8
-3.1
Figure 1.4: Business Operation Expectations of German
Companies in June 2020
Demand and Sales, in %
24.0
14.0
22.0
37.0
4.0
23.0
15.0
24.0
34.0
4.0
Demand Sales
Return to Pre-COVID-19 level
by June 2020
Return to Pre-COVID-19 level
by End of Q3
Return to Pre-COVID-19 level by End of 2020
Too Early
to State
Not Applicable
Source: German Chamber of Commerce in China’s third survey on COVID-19’s futureimpact on German businesses (June 2020). Formulated question: “By when do you expectyour company's business operations to return to normal?” Answered by 255 Germancompanies.
J/F Mar Apr JunJ/F
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The total retail sales of consumer goods reached RMB
17,225.6 billion from January to June 2020. The retail sales
of consumer goods, excluding automobile sales, amounted to
RMB 15,586.9 billion, down 10.9 percent YoY (NBS, 2020a).
The automobile retail sales decreased by 15.2 percent from
January to June 2020, compared to last year (Figure 1.6).
Automobile sales in July are expected to rise by 14.9 percent
(compared to July 2019) to 2.08 million vehicles, according to
the China Association of Automobile Manufacturers
(Shanghai Securities News, 2020).
The COVID-19 pandemic also took its toll on business
sentiment. China’s Caixin / Markit’s Purchasing Manager’s
Index (PMI) fell to a record low of 26.5 in services in
February 2020 from 51.8 in January (a PMI above 50
indicates expansion, while one below 50 indicates
contraction). Business sentiment fell to a historical low amid
company closures, travel restrictions, a decline in exports, and
job cuts (Figure 1.7).
After February, the Caixin China General Services PMI
steadily increased, reaching 58.4 in June 2020, an over 10-
year high. These results can be attributed to the easing of
virus-containing restrictions, growing demand, and export
sales as well as an increased activity in the construction
sector, rising for the first time since January. In July, the
Services PMI fell to 54.1.
The Caixin China General Manufacturing PMI is rising
monthly since April 2020, when it experienced a decline to
49.4 due to the challenging domestic and global demand
(Figure 1.7). The service and manufacturing PMI from the
NBS reports similar developments. After a dive in February,
an the PMI shows an expansive trend. In April, the NBS
indicates a manufacturing PMI of 50.8, whereas Caixin
reported 49.4. For services, NBS reported a PMI of 53.2,
opposed to Caixin reporting a drop to 44.4. The differences
are caused by the Caixin / Markit’s index monitoring private
companies and smaller firms, while the index from the NBS
focuses on state-owned enterprises and larger companies
(Ahern, 2020).
Grain, Oil, Food 1,252 10.5 7,453 12.9
Beverages 210 19.2 1,026 10.5
Tobacco and Liquor 330 13.3 1,726 -3.1
Garment, Footwear, Hats, Knitwear 1,059 -0.1 5,120 -19.6
Cosmetics 326 20.5 1,477 -0.2
God, Silver, Jewelry 193 -6.8 977 -23.6
Commodities 615 16.9 2,927 5.2
Household appliances and AV Equipment 1,026 9.8 3,770 -12.2
Traditional Chinese , Western Medicines 461 9.7 2,535 5.8
Cultural and Office Appliances 349 8.1 1,510 1.6
Furniture 159 -1.4 657 -14.1
Communication Appliances 576 18.8 2,414 5.8
Petroleum and Related Products 1,495 -13.0 7,916 -18.4
Automobile 3,612 -8.2 16,388 -15.2
Building and Decoration Materials 163 2.2 712 -11.0
June
Value YoY
January to June
Value YoY
Source: NBS.
Figure 1.6: Retail Sales of Consumer Goods 2020
January-June 2020, Absolute Value in RMB 100 million, YoY
Growth Rate in %
Figure 1.7: Business Sentiment 2020
China’s Caixin / Markit Purchasing Manager’s Index (PMI)
Source: China's Caixin / Markit Purchasing Manager's Index (PMI). PMI values > 50 indicate expanding business; values < 50 indicate contraction.
Services
52.5 51.8
26.5
43.0 44.4
55.058.4
51.5 51.1
40.3
50.1
49.4
50.7 51.2
Dec Jan Feb Mar Apr May Jun
2019 2020
Manufacturing
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Figure 1.8: Impact of COVID-19 on German Companies’
Revenue in H1 2020
In %
21
48
1 3
24
3
14
68
2 3
12
1
27
55
69
3
Expectation Feb 2020
Decrease of Less than
10%
Decrease of More than
10%
Increase of Revenue
No Impact
I Don’t Know
Source: German Chamber of Commerce in China’s first, second, and third survey onCOVID-19’s future impact on German businesses (February, March, & June 2020). Towhat extent has the COVID-19 epidemic impact your company's revenue in the first half of2020? Answered by 229 German companies, per item only one answer possible.
Too Early
to State
Expectation Mar 2020 Forecast Jun 2020
COVID-19’s continuing strain on China’s economy is
reflected in the predicted impact of COVID-19 on the
German companies’ revenue in the first half of 2020. In June
2020, 55 percent of German companies forecasted a
revenue decrease of 10 and more percent for the first half of
2020. This forecast shows a positive development to March
2020, as 68 percent of the surveyed German companies
predicted a revenue decrease of 10 and more percent for H1
2020. Nevertheless, only 9 percent of the surveyed German
enterprises reported no impact of COVID-19 on revenues
(Figure 1.8).
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5.3
6.2
5.9 6.0 5.95.7
Jan Feb Mar Apr May Jun
Source: NBS; *2025, 2025, 2050 Forecast from World Bank.
22.9 20.3 16.6 16.5 16.8 17.5 16.9 14.1
70.1 72.0 74.5 73.0 70.7 70.3 69.459.8
7.0 7.7 8.9 10.5 12.6 12.2 13.726.1
Figure 1.9: China's Age Demographic Composition of
Population
2000-2050*, in %
Aged 0 to 14 years Aged 15 to 64 years >65 years
2000 2005 2010 2015 2025*2020*2019 2050*
Source: NBS.
Figure 1.10: Urban Unemployment Rate 2020
In %
2. Labor Market Developments
Along with the ongoing challenges of an aging population
(Figure 1.9), shrinking labor force, and, thus, an increasingly
challenging worker-to-pensioner ratio, the Chinese labor
market faces severe disruptions as a result of the pandemic.
Rising unemployment and, at the initial phase of the
outbreak, labor dislocation, brought about further instability
to the labor market.
The official surveyed urban unemployment rate, released by
the NBS, increased significantly in February 2020 to 6.2
percent (from 5.3 percent in January). With the easing of
domestic travel restrictions and the resumption of business
activities, the urban unemployment rate fell to 5.9 percent in
March (Figure 1.10). During that time, 76 million workers
(around 17 percent of the urban workforce) were employed,
but could not resume work. Additionally, 26 million urban
workers lost their jobs (NBS, 2020b). The surveyed urban
unemployment rate increased to 6 percent in April 2020,
with a specifically high urban unemployment rate of 13.8
percent for the population aged 16 to 24 (NBS, 2020c).
Looking at absolute numbers, 4.6 million people joined
China’s workforce in urban areas in the first five months of
2020. This marks a decrease of 1.37 million in newly
employed talents compared with the same period in 2019
(NBS, 2020d). In June, an urban unemployment rate of 5.7
percent was reported, continuing to put pressure on the
Chinese labor market (Figure 1.10).
Labor market disruptions have had a severe impact on
migrant workers. First of all, at the initial phase of the
COVID-19 outbreak, most migrant workers were visiting their
hometowns for the Chinese New Year. As the outbreak
began, unexpected lockdowns and domestic travel
restrictions prevented millions from returning to their
workplaces. It highly affected families relying on the income
of the migrant workforce. According to the NBS, migrant
workers numbered 290.77 million and represented 30
percent of the total workforce in urban areas in 2019.
Stranded migrant workers, thus, resulted in labor dislocation
and staff shortages.
Secondly, migrant workers in urban areas are highly engaged
in sectors and industries that were hit hardest by the
pandemic. In the first quarter of 2020, the secondary sector
was impacted the most, experiencing YoY negative GDP
growth of 9.6 percent (see Chapter 1). Almost half of the
migrant workers are employed in the secondary sector
(Figure 1.11). The most impacted industries by COVID-19
were hotel and catering services, with a negative YoY growth
of 26.8 percent, followed by wholesale and retail trades with
a YoY decline of 8.1 percent for the H1 of 2020 (see
Source: NBS.
Figure 1.11: Migrant Workers Distribution of
Employment by Sector
2016-2019, in %
44.5 46.7 48.0 50.5
55.1 52.9 51.5 49.1
0.4 0.4 0.5 0.4
2016 2017 2018 2019
Primary Secondary Tertiary
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Figure 1.12: Migrant Workers Distribution of
Employment by Industry
2018-2019, in %
Chapter 1). These two industries have a disproportionate
high share of migrant workers (World Bank, 2020), and
almost one-fourth of the migrant workers are employed in
these industries (Figure 1.12).
Next to migrant workers, also fresh graduates are affected by
the labor market disruptions, facing difficulties in finding a job
compared to previous years. In 2020, 8.74 million students
are expected to graduate from college in China, a record high
(Li, 2020). According to a survey conducted by The China
Institute for Employment Research (CIER) and the online
recruitment platform Zhaopin in February and March 2020,
over half of the Chinese college students perceive the
employment situation this year as not optimistic (Zeng,
2020). As a response, the Chinese government has put in
place measures to encourage employment and provide
employment services on an ongoing basis for graduates (Li,
2020).
The CIER reported a decrease in recruitment demand by
28.45 percent and a decrease in job applications by 8.73
percent in the first quarter of 2020, compared to the same
period in 2019. The CIER Index is based on the online
recruitment platform Zhaopin, and measures the balance
between job supply and job demand in the Chinese labor
market (an index above 1 means the job supply outweighs
demand. An index below 1 indicates the opposite). The CIER
index amounted to 1.43 in Q1 2020 – falling from 2.18 in
the previous quarter. In March 2020, it fell to its record low
of 1.02 since the index launch in 2011 (CIER, 2020). Due to
COVID-19, many companies had to suspend production and
business activities and, consequently, reduced recruitment.
Furthermore, the pandemic also reduced foreign trade, global
and domestic demand, and companies’ revenues (see
Chapter 1), all adding to the decline in recruitment.
The Ministry of Human Resources and Social Security
(MOHRSS) publishes quarterly statistics of the job vacancies
to job seekers ratios, reflecting labor shortages or surplus.
The MOHRSS samples data from around 200 public talent
and service organizations. A ratio above 1 indicates labor
shortages, and a value below 1 means labor surplus. In the
first quarter of 2020, the China ratio amounted to 1.62,
denoting that demand is stronger than supply. Due to the
pandemic, the number of job seekers declined significantly in
the first quarter, and rose slightly in Q2. Employers recruited
about 4.412 million people through public employment
service agencies, and about 3.337 million job seekers entered
the market in the second quarter (MOHRSS, 2020), resulting
in a ratio of 1.32 (Figure 1.13).
In order to stabilize the labor market, the Chinese
government announced in May 2020 that it would create
2018 2019
Source: NBS.
0.4
27
.9
18
.6
3.5
12
.1
6.6
6.7
12
.2
12
.0
0.4
27
.4
18
.7
2.5
12
.0
6.9
6.9
12
.3
12
.9
Secondary Sector
Tertiary Sector
Manufacturing TransportationOther Secondary Residential Services
ConstructionAgriculture Wholesale & Retail
Hospitality Other Services
Primary Sector
1.28 1.221.05 1.08
1.62
1.32
2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2
Source: Ministry of Human Resources and Social Security (MOHRSS). A value > 1 indicates labor shortages; a value < 1 means labor surplus.
Figure 1.13: MOHRSS Job Vacancies to Job Seekers
2019-2020, Quarterly
nine million urban jobs to ensure a surveyed urban
unemployment rate of around 6 percent to stabilize
employment. Furthermore, a target was set to eliminate
poverty among rural residents living below the current
poverty line (Li, 2020). The poverty line is based on an
income of RMB 6.3 per day at 2010 constant prices.
Furthermore, China has adopted policy measures to better
secure employment and support income. The measures
mainly rely on the existing social protection program,
expanding the benefits and coverage. This includes, for
example, extending social protection programs for migrant
workers (World Bank, 2020), allowing low-income earners to
postpone social insurance payments, and canceling
employment-related government charges (Li, 2020). China’s
social protection and employment policies are expected to
amount to 1.65 percent of the GDP. For reference, upper-
middle income countries spend 0.51 percent of GDP on
average on these measures (Gentilini, Almenfi, Dale, Lopez,
Mujica, Quintana, & Zafar, 2020). Still, Migrant workers
16
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looking to participate in the social support program might
face certain hurdles, as China’s household registration system
(hukou) ties the social security benefits and access to social
service to the place of registration, and not the place of
employment (World Bank, 2020).
17
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Figure 2.2: GDP and Wage Growth
2010-2019, in %
II. WAGE DEVELOPMENTS IN CHINA
1. Wage Developments
China’s annual average wage increased from RMB 82,413 in
2018 to RMB 90,501 in 2019, showing an average nominal
wage growth of 9.8 percent (Figure 2.1). Consistent with the
GDP growth rate, the average wage growth faces a
downward trend as well (Figure 2.2).
In the first half of 2020, the average per capita disposable
income of Chinese residents amounted to RMB 15,666,
indicating a 2.4 percent growth compared to the first half of
2019 (RMB 15,294) (Figure 2.3). The per capita disposable
income of urban residents was RMB 21,655 and for rural
residents RMB 8,069 in the first half of 2020. The median
per capita disposable income of Chinese residents for the
first half of 2020 increased by 0.5 percent to RMB 13,347
compared to the same period in 2019 (NBS, 2020e).
Looking at wage increases on a regional level, the latest
official data was released by the NBS and referred to 2018.
In the figure 2.4, northern and eastern provinces show an
average wage growth between 2010 to 2018 that is below
the China average. South and Southwest regions reported
above-average wage growth during this period (Figure 2.4).
For an assessment of the provincial wage levels and their
development, refer to Figure 2.5.
According to the NBS, the highest average monthly wage
levels among urban employees (RMB/month) for 2018 was
reported in Beijing (RMB 12,147) and Shanghai (RMB
11,700), and the lowest in Heilongjiang (RMB 5,065) and
Henan (RMB 5,265). The 2019 average wage levels are
evaluated based on the GDP growth, inflation, and wage
increases from the past five years. The estimations of the
average wage levels for 2020 are including the COVID-19
impact and are based on the same indicators as the 2019
analysis, while including in the calculation the deviation
between the expected and effective wage increase for 2020
found by the German Chamber of Commerce in China (see
Part III). Due to the COVID-19 pandemic and its ongoing
impact on global markets, a decrease in wage growth from
2019 to 2020 is likely (Figure 2.5).
Figure 2.1: Average Wage and Wage Growth
2010 - 2019, Average Wage in RMB, Average Wage
Growth in %
Source: NBS. Annual wages based on 12 months; all wages are pre-tax.
36
,53
9
62
,02
9
82
,41
3
90
,50
1
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
20,000
40,000
60,000
80,000
100,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Average Wage Average Wage Growth (nominal)
10.69.5
7.9 7.8 7.3 6.9 6.7 6.9 6.6 6.1
13.314.4
11.9
10.1 9.5 10.18.9
10.0 10.99.8
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: NBS.
Average Wage Growth (nominal) GDP Growth
Figure 2.3: Disposable Income of Chinese Residents
H1 2019 & H1 2020, Income per Capita in RMB, YoY
Growth in %
Median Growth Rate in %
Average Absolute Level in RMB
Median Absolute Level in RMB
Average Growth Rate in %
13,281 13,347
15,29415,666
8.8
2.4
9.0
0.50.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12,000
13,000
14,000
15,000
16,000
H1 2019 H1 2020
Source: NBS.
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Province 2018 2019* 2020**2020 Wage
GrowthFactor***
Beijing 12,147 13,267 14,297 7.8 1.75
Shanghai 11,700 12,936 13,924 7.6 1.70
Tibet 9,668 11,378 13,369 17.5 1.64
Tianjin 8,394 9,148 9,795 7.1 1.20
Zhejiang 7,407 8,147 8,814 8.2 1.08
Guangdong 7,386 8,090 8,802 8.8 1.08
Qinghai 7,115 7,845 8,556 9.1 1.05
Jiangsu 7,057 7,701 8,256 7.2 1.01
CHINA 6,868 7,534 8,168 8.4 1.00
Chongqing 6,577 7,220 7,783 7.8 0.95
Ningxia 6,532 7,067 7,605 7.6 0.93
Guizhou 6,526 7,067 7,965 9.2 0.98
Sichuan 6,474 7,148 7,777 8.8 0.95
Hainan 6,324 7,047 7,728 9.7 0.95
Yunnan 6,308 7,125 7,957 11.7 0.97
Xinjiang 6,288 6,842 7,355 7.5 0.90
Anhui 6,198 6,687 7,226 8.1 0.88
Fujian 6,193 6,729 7,208 7.1 0.88
Inner Mongolia 6,153 6,612 7,049 6.6 0.86
Hubei 6,148 6,800 7,403 8.9 0.91
Shandong 6,133 6,758 7,290 7.9 0.89
Shaanxi 5,999 6,517 7,014 7.6 0.86
Gansu 5,891 6,538 7,147 9.3 0.87
Guangxi 5,884 6,586 7,260 10.2 0.89
Hunan 5,852 6,456 7,034 9.0 0.86
Hebei 5,726 6,316 6,914 9.5 0.85
Jiangxi 5,714 6,274 6,823 8.8 0.84
Jilin 5,711 6,274 6,815 8.6 0.83
Liaoning 5,610 6,053 6,480 7.1 0.79
Shanxi 5,493 5,842 6,191 6.0 0.76
Henan 5,265 5,701 6,196 8.7 0.76
13.3
12.6
12.4
12.3
12.1
12.1
12.0
11.9
11.4
11.4
11.4
11.4
11.4
11.2
11.2
11.2
11.0
10.9
10.7
10.6
10.5
10.4
10.4
10.4
10.4
10.3
10.3
10.2
10.1
10.0
9.7
9.2
Hainan
Yunnan
Guizhou
Jiangxi
Tibet
Hubei
Sichuan
Xinjiang
Hunan
Gansu
Jilin
Qinghai
Fujian
Anhui
Chongqing
Guangxi
CHINA
Beijing
Shandong
Hebei
Heilongjiang
Shaanxi
Inner Mongolia
Guangdong
Zhejiang
Shanghai
Jiangsu
Ningxia
Shanxi
Henan
Tianjin
Liaoning
18.9
Figure 2.4: Average Wage Developments 2010-2018
By Province, in %
Source: NBS.
Figure 2.5: Wage Level by Province
2018–2020, Average Monthly Wages in RMB, Wage
Growth in %
COVID-19 Impact on Wage Level
Source: German Chamber of Commerce in China analysis based on 2018 NBS data. *2019 values are estimates considering GDP growth, inflation and wage increases of the last 5 years. **2020 is also based on historical GDP growth, inflation and wage increases and additionally, including the deviation between the surveyed German companies' expected and effective wage increase for 2020 found by the German Chamber of Commerce in China. ***Factor represents the ratio of regional wage to national average for 2020. Monthly wages, based on 12-months year basis; all wages are pre-tax.
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Source: NBS. * Factor represents the ratio of industry-specific average wages to national average wage for 2019. Monthly wages, based on 12-months year basis; all wages are pre-tax.
Industry 2018 2019Growth
(%)Factor*
IT 12,307 13,446 9.3 1.78
Technical Services, R&D 10,279 11,122 8.2 1.47
Finance Services 10,820 10,950 1.2 1.45
Healthcare 8,177 9,075 11.0 1.20
Utilities 8,347 8,978 7.6 1.19
Culture 8,218 8,976 9.2 1.19
Education 7,699 8,140 5.7 1.08
Transport & Logistics 7,448 8,088 8.6 1.07
Public Management 7,328 7,864 7.3 1.04
Mining 6,786 7,589 11.8 1.01
CHINA 6,872 7,542 9.8 1.00
Wholesale & Retail 6,713 7,421 10.5 0.98
Business Services 7,096 7,349 3.6 0.97
Real Estate 6,273 6,680 6.5 0.89
Manufacturing 6,007 6,512 8.4 0.86
Construction 5,042 5,465 8.4 0.72
Water & Environment 4,723 5,097 7.9 0.68
Residential Services 4,612 5,019 8.8 0.67
Hospitality 4,022 4,196 4.3 0.56
Agriculture 3,039 3,278 7.9 0.43
Figure 2.6: Wage Developments by Industry 2019
Ranked based on 2019 wages
Since 2016, IT is the highest paying industry in China. With
an average monthly wage of RMB 13,446 in 2019, the
compensation level in IT jobs grew by 9.3 percent compared
to 2018. Technical Services and R&D, as well as Financial
Services, remain the top three industries with the highest
wage level (Figure 2.6).
With 11.8 percent the mining industry has the highest wage
increase. Already between 2017 to 2018, the compensation
level in the mining industry increased by 17.2 percent.
Consequently, monthly wages in mining (RMB 7,589) have
passed the national average (Figure 2.6).
The most modest wage level increases from 2018 to 2019
are reported in the financial sector (1.2 percent), business
services (3.6 percent), and hospitality (4.3 percent) (Figure
2.6).
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Figure 2.7: Regional Wage Increase Guidelines 2020
In %
2. Minimum Wages and Wage Guidelines
Provincial and local governments issue wage guidelines based
on their region’s economic development. These guidelines
are recommendations providing a reference for wage
increases. Newly-released wage guidelines, published since
the last edition of the Labor Market & Salary Report
(September 2019), can be found in Figure 2.7.
In addition to the wage guidelines, China has a minimum
wage system. Enforced since 2004, the minimum wages
issued by local governments are mandatory and should be
revised every two years. The minimum wages are supposed
to stay between 40 to 60 percent of the region’s average
monthly salaries.
In 2020, only three provinces have increased their minimum
wage: Fujian, Guangxi, and Qinghai. Among these three
regions, Qinghai presents the highest minimum wage
increase, with 11.8 percent. The minimum wage has not been
updated in Qinghai since June 2017, and has now seen an
increase from RMB 1,500 / month to RMB 1,700 / month.
Prior to this change, Qinghai was the province with the
lowest minimum wage. Now Anhui province has the lowest
minimum wage rate in China, set at RMB 1,550 / month.
Since fall 2019, four additional provinces have increased their
minimum wage: Hebei, Liaoning, Hunan, and Guizhou. Hebei
(13.2 percent) and Liaoning (10.5 percent) have introduced
the highest wage increase among these provinces.
Province Minimum Average Maximum
Beijing 3.5 8 – 8.5 -
Tianjin 3 7 12
Hebei 3.5 10.5 16
Shanxi 4 8 12
Liaoning 4 8 12
Jilin 3 6 9
Guizhou 3 7.5 12
Yunnan 3 7 11
Gansu 4 7 12
Qinghai 3 7 12
Ningxia 3 6.5 12
Average 3.4 7.5 12
Average 2019 2.2 6.4 10.3
Average 2018 3.2 7.6 11.8
Source: Ministry of Human Resources and Social Security (MOHRSS).
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Region ClassLast
Increase*
A B C D E F (%) Valid since
Beijing 2,200 - - - - - 3.8 Jul 2019
Tianjin 2,050 - - - - - 4.9 Jul 2017
Hebei 1,900 1,790 1,680 1,580 - - 13.2 Nov 2019
Shanxi 1,700 1,600 1,500 1,400 - - 5.4 Oct 2017
Inner Mongolia 1,760 1,660 1,560 1,460 - - 8.1 Aug 2017
Liaoning 1,810 1,610 1,480 1,300 - - 10.5 Nov 2019
Jilin 1,780 1,680 1,580 1,480 - - 18.1 Oct 2017
Heilongjiang 1,680 1,450 1,270 - - - 15.5 Oct 2017
Shanghai 2,480 - - - - - 2.5 Apr 2019
Jiangsu 2,020 1,830 1,620 - - - 14.7 Aug 2018
Zhejiang 2,010 1,800 1,660 1,500 - - 8.4 Dec 2017
Anhui 1,550 1,380 1,280 1,180 - - 2.3 Nov 2018
Fujian 1,800 1,720 1,570 1,420 - - 5.6 Jan 2020
Jiangxi 1,680 1,580 1,470 - - 10.1 Jan 2018
Shandong 1,910 1,730 1,550 - - - 5.5 Jun 2018
Henan 1,900 1,700 1,500 - - - 17.1 Oct 2018
Hubei 1,750 1,500 1,380 1,250 - - 13.2 Nov 2017
Hunan 1,700 1,540 1,380 1,220 - - 7.1 Oct 2019
Guangdong 2,150 1,720 1,550 1,410 - - 6.2 Jul 2018
Guangxi 1,810 1,580 1,430 - - - 7.2 Jan 2020
Hainan 1,670 1,570 1,520 - - - 17.8 Dec 2018
Chongqing 1,800 1,700 - - - - 20.7 Jan 2019
Sichuan 1,780 1,650 1,550 - - - 20.4 Jul 2018
Guizhou 1,790 1,670 1,570 - - - 6.1 Dec 2019
Yunnan 1,670 1,500 1,350 - - - 9.0 May 2018
Tibet 1,650 - - - - - 17.9 Jan 2018
Shaanxi 1,800 1,700 1,600 - - - 7.6 May 2019
Gansu 1,620 1,570 1,520 1,470 - - 10.8 Jun 2017
Qinghai 1,700 - - - - - 11.8 Mar 2020
Ningxia 1,660 1,560 1,480 - - - 12.2 Oct 2017
Xinjiang 1,820 1,620 1,540 1,460 - - 10.4 Jan 2018
Shenzhen 2,200 - - - - - 3.3 Jul 2018
Source: People's Daily. "Class" refers to different wage districts or jurisdictions within a province. Local governments are responsible for setting minimum wages. With the exception of Shenzhen, only provinces and province-level municipalities set minimum wage levels. * Increases are calculated as the average increases of adjustments for all categories in the region.
Figure 2.8: Minimum Wage Rates in China 2020
Monthly Wages in RMB
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III. SURVEY RESULTS
1. Company Measures Amid COVID-19
As COVID-19 has a substantial and continuing impact on the
economy and business activities in China, German companies
have taken certain measures to mitigate the impact of
COVID-19 on their operations. The most common initiatives
have been: hiring stops (51.2 percent); introduction of
alternative work arrangements, such as remote work (46.0
percent); and the usage of HR government support measures
(44.3 percent) (Figure 3.1).
Around one in ten German companies have laid-off
personnel (11.1 percent) or reduced salaries, either
temporarily (10.6 percent) or permanently (7.1 percent)
(Figure 3.1).
2. Expected and Effective Wage Developments at German Companies
The expected salary growth for 2021 among German
companies in China averages 3.79 percent. The projection
represents the lowest expected salary growth ever recorded
by the German Chamber of Commerce in China, and it is
1.74 p.p. below the projected growth for 2020 (Figure 3.2).
The 2020 effective salary growth among German companies
in China averages 4.03 percent, 1.50 p.p. below the
projected growth for 2020 (Figure 3.3).
The effective salary growth for 2020 and the expected salary
growth for 2021 indicate that, due to COVID-19’s impact on
business, German companies have adjusted salary
developments. 45.8 percent of the companies report that the
pandemic has had a medium impact on their effective salary
growth developments, and another 20.7 percent report a
high impact (Figure 3.4). Similarly, 47.0 percent report that
the pandemic has a medium impact on their projections for
next year, and another 20.0 percent claim it has a high
impact (Figure 3.5).
German companies have taken measures to mitigate the
impact of COVID-19 on their business. Some of these
measures affect the labor cost, like the usage of HR
government support measures, which is the most common
among those measures (44.3 percent). It is followed by cuts
in performance appraisals and bonus pay-outs (20.7 percent),
and cuts in extra benefits, such as supplementary health
insurance, overtime, or children allowances (12.3 percent)
(Figure 3.6).
Figure 3.2: Expected Wage Growth Development at
German Companies in China
2012-2021, Nominal Growth, in %
In each edition, the expected wage growth is the average of all the individual positions’expected wage growth collected in the survey. In 2020, with a total of 576 companies and39 different roles, the number of observations collected amounted to 7,307.
Figure 3.1: Measures Taken Due to COVID-19
Measures Taken by German Companies, in %
51.2
46.0
44.3
35.9
26.4
20.7
16.1
14.9
12.3
11.1
10.6
8.9
7.1
Hiring Stop
Remote Work
HR Gov. Support Measures
Cut Planned Trainings
Obligatory Annual Leave
Cut Bonus/Appraisals
Digitalization of Work Processes
More Training Opportunities
Cut Extra Benefits
Lay-Off
Temporary Reduction GBS
Changing Long-term HR Strategy
Annual Reduction GBS
Figure 3.3: Expected & Effective Wage Increases in China
2020-2021, in %
Sample: 576 companies. Multiple answers allowed per contributor. “Cut extra benefits”may include the following: supplementary health insurance, life insurance, overtime,children allowances, meal and transportation allowances, supplementary housing funds,retention bonuses. GBS: Gross Base Salary.
10.208.90 8.80
8.107.10
6.23 5.90 5.99 5.53
3.79
2012 2013 2014 2015 2016 2017 2018 2019 2020 20212021
5.53
4.03 3.79
Expected 2020 Expected 2021Effective 2020
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37.2
41.9
22.0
34.5
41.1
42.9
25.5
25.0
23.5
15.6
45.3
41.9
52.0
38.2
44.6
42.9
40.4
58.3
47.1
59.4
17.5
16.1
26.0
27.3
14.3
14.3
34.0
16.7
29.4
25.0
Figure 3.4: COVID-19 Impact on Actual Wage Growth
Development at German Companies in China in 2020
Perceived Impact by German Companies, in %
Development
Medium HighLow
Results by Company Size (Number of Employees)
Shanghai
Suzhou
Taicang / Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Other YRD: Other Yangtze River Delta areas; Other PRD: Other Pearl River Delta areas.
Results by Region
Less 50
50-250
More 250
32.2
33.0
35.7
47.0
46.5
43.3
20.8
20.5
21.0
33.4
45.8
20.7
Low Impact MediumImpact
High Impact
Medium HighLow
Figure 3.5: COVID-19 Impact on Expected Wage Growth
Development at German Companies in China in 2021
Perceived Impact by German Companies, in %
34.8
38.7
26.5
23.6
46.4
39.3
34.8
33.3
17.6
16.1
43.3
45.2
53.1
47.3
41.1
53.6
41.3
54.2
58.8
67.7
21.9
16.1
20.4
29.1
12.5
7.1
23.9
12.5
23.5
16.1
Development
Results by Company Size (Number of Employees)
Shanghai
Suzhou
Taicang / Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Other YRD: Other Yangtze River Delta areas; Other PRD: Other Pearl River Delta areas.
Results by Region
Less 50
50-250
More 250
32.5
34.6
31.4
46.0
46.3
49.4
21.5
19.2
19.2
33.0
47.0
20.0
Low Impact MediumImpact
High Impact
Medium HighLow
Medium HighLow
Figure 3.6: Measures Taken Due to COVID-19 with
Impact on Compensation
Measures Taken by Companies, in %
HR Gov. Support Measures
Cut Bonus/Appraisals
Cut Extra Benefits
Temporary Reduction GBS
Annual Reduction GBS
Sample: 576 companies. Multiple options allowed per contributor. Cut extra benefits mayinclude the following: supplementary health insurance, life insurance, overtime, childrenallowances, meal and transportation allowances, supplementary housing funds, retentionbonuses. GBS: Gross Base Salary.
44.3
20.7
12.3
10.6
7.1
24
Labor Market
2020 | 2021& Salary Report
In partnership with
5.53
5.57
4.90
4.91
5.80
5.82
5.35
5.09
6.74
6.63
5.55
4.03
4.08
3.61
3.17
4.47
4.38
4.82
3.84
3.86
4.97
3.80
3.79
3.86
3.15
3.96
3.51
3.91
4.12
3.87
3.88
3.55
4.00
CHINA
Shanghai
Suzhou
Taicang & Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Other YRD: Other Yangtze River Delta areas; Other PRD: Other Pearl River Delta areas.
Expected 2020 Effective 2020 Expected 2021
Figure 3.7: Wage Developments by Region
2020–2021, in %
3. Detailed Wage Developments
Comparison: Expected 2020 and Effective 2020
When looking at the wage developments by region, the
effective wage increase reported by survey participants in
2020 lies below the projections recorded in 2019 for 2020.
This is mostly due to the impact of COVID-19 on the actual
wage growth developments (Figure 3.4). The highest
discrepancy between the initial expectation and the effective
wage growth has been reported in Shenzhen. With a
projected 6.74 percent wage growth increase and an actual
increase of 3.86 percent in Shenzhen, the difference amounts
to 2.88 p.p. – nearly double the gap observed for China
overall (1.50 p.p.). On the other hand, companies in Tianjin
projected an expected wage growth for 2020 of 5.35 percent
and delivered a 4.82 percent effective increase. That makes it
the region with the narrowest gap (0.53 p.p.) (Figure 3.7).
Comparison: Expected 2020 and Expected 2021
The expected salary growth for 2021 remains below the
projections for 2020 (made in 2019) in all regions (Figure 3.7).
The most pronounced gaps between projections for 2020
and 2021 are observed in Shenzhen and Guangzhou. In
Shenzhen, the expected salary growth for 2021 is 3.88
percent, 3.86 p.p. below the projected growth for 2020. In
Guangzhou, the projected salary growth for next year is 6.63
percent, 3.08 p.p. below last year’s projection (Figure 3.7). A
more detailed analysis of these differences can be found in
the end of this chapter, when reviewing the results by levels
of seniority.
Other regions and cities present differences between their
annual projections that are more moderate. That is the case
of Taicang and Kunshan, with an expected salary growth for
2021 of 3.96 percent, 0.95 p.p. below the projection for
2020 (Figure 3.7).
The range of variation for next year’s wage growth
projections is much smaller than in the previous edition.
Between the highest expected wage growth for 2021 (4.12
percent in Tianjin) and the lowest (3.15 percent in Suzhou),
the difference is around 1 p.p. In the predictions from the
2019 edition that range was 1.90 p.p. for the expected wage
growth for 2020 (Figure 3.7).
Comparison: Effective 2020 and Expected 2021
Although most regions present an expected increase for 2021
that is very similar to the effective growth in 2020, there are
some exceptions. In Taicang and Kunshan the expected wage
growth for 2021 (3.96 percent) is 0.79 p.p. above the
effective wage growth in 2020. Similarly, other Pearl River
Delta (Other PRD), present a 4 percent expected salary
increase for 2021, 0.20 p.p. above the effective increase this
year (Figure 3.7).
Guangzhou and other Yangtze River Delta (Other YRD) are
the regions that expect to introduce salary increases next
year that fall the furthest away from their effective increases
in 2020. In Guangzhou, the expected wage growth for next
year is 3.55 percent, as opposed to an effective growth this
year of 4.97 percent; in Other YRD regions, the expected
wage growth for 2021 is 3.51 percent, against an effective
growth of 4.47 percent in 2020 (Figure 3.7).
25
Labor Market
2020 | 2021& Salary Report
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5.535.77
5.30 5.27
4.03 4.17 3.953.713.79 3.85 3.83
3.46
CHINA Tier 1 Tier 2 Tier 3
Figure 3.8: Wage Developments by City Tier
In %
Expected 2020 Effective 2020 Expected 2021
5.53
5.84
5.26
5.27
5.25
5.90
4.87
5.81
6.04
4.03
3.81
3.34
4.74
3.80
4.33
4.52
5.96
6.12
5.49
4.27
3.79
3.73
3.50
3.83
3.64
4.19
2.76
4.94
5.25
4.60
2.67
CHINA
Machinery & Industrial Equip.
Automotive
Plastic & Metal Products
Electronics
Chemicals
Consumer Goods
Medical Supplies
Consulting / Legal Services
IT / Telecommunications
Logistics
Only values for industries displayed with at least 100 data points collected from thevariable “Expected Wage Increase” contributed by a minimum of ten different companies.In 2019, insufficient data available for the industries IT and Logistics.
n.a.
n.a.
Figure 3.9: Wage Developments by Industry
In %
Expected 2020 Effective 2020 Expected 2021
Comparison: City Tier
When observing the evolution of the results by city tier,
everywhere the effective increases in 2020 are far below the
initial projections for 2020 made in 2019. However, in tier-2
cities, the gap is smaller: 3.95 effective increase in 2020,
against the projected 5.30 percent for 2020.
Similarly, the expected salary growth for 2021 remains below
the projection for 2020 across all three tiers (Figure 3.8).
Regardless of city tiers, the expected wage growth rates in
2021 are below the effective increases experienced in 2020.
Again, the discrepancy is the smallest in the case of tier-2
cities (Figure 3.8).
Companies located in tier-1 cities report the highest
projected wage growth in 2021 (3.85 percent), followed
closely by businesses in tier-2 cities (3.83 percent).
Companies in tier-3 cities present the most moderate
increase in 2021 (3.46 percent) (Figure 3.8).
Comparison: Industry
Two industries report an effective salary growth in 2020,
which surpasses the projected increases for 2020 made in
2019. Medical Supplies report an effective wage growth in
2020 of 5.96 percent, 0.15 p.p. above the initial projection;
Consulting / Legal Services firms presented an effective wage
growth of 6.12 percent, an increase of 0.08 p.p. compared to
last year’s projection. It should be noted that Medical Supplies
and Consulting / Legal Services companies represent only
6.80 percent of all survey participants. For all other industries,
effective increases this year are below the initial projections
for 2020 (Figure 3.9).
The expected wage developments by industry are aligned
with the overall trend in China, with expected salary growth
for 2021 below the projected salary growth for 2020 across
all industries. Consulting / Legal Services and Medical
Supplies are the industries with the highest expected salary
growth rates for 2021: 5.25 percent and 4.94 percent,
respectively. They are also the industries with the smallest
deviation between their respective projections for 2021 and
2020 (Figure 3.9).
Logistics (2.67 percent), Consumer Goods (2.76 percent),
Automotive (3.50 percent), and Electronics (3.64 percent)
project the most moderate wage increases for 2021. These
results are consistent with last year’s edition, where the same
industries presented the most conservative expected
increases (with the exception of Logistics, which has no
available data for 2019) (Figure 3.9).
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5.535.83 5.60
5.32
4.03
4.74
3.85 3.853.794.01
3.76 3.72
CHINA <50 50-250 >250
Figure 3.10: Wage Developments by Company Size
Company Size by Number of Employees, in %
Expected 2020 Effective 2020 Expected 2021
Automotive is the only industry projecting an increase next
year above the effective increase experienced in 2020 (Figure
3.9). See Detailed Comparison by Industry in this section for in-
depth industry analysis.
Comparison: Company Size
When comparing by company size, small companies present
the smallest discrepancy between the effective increase in
2020 and the initial projection in 2019. Still, the 4.74 percent
effective increase for small companies is 1.10 p.p. lower than
projected in 2019. Mid-sized companies register the highest
discrepancy between effective and expected wage growth for
2020: the former being 1.75 p.p. lower than the latter (Figure
3.10).
Small companies (less than 50 employees) report the highest
expected increase for 2021: 4.01 percent, 0.22 p.p. above
China’s overall expected salary increase for 2021. Expected
increases for 2021 in mid-sized (50 to 250 employees) and
large companies (more than 250 employees) are more
moderate: 3.76 percent and 3.72 percent, respectively. These
figures are aligned with China’s overall expected wage
increase for 2021. In all three categories, the expected
increases for 2021 fall below the projections made in 2019
for 2020 (Figure 3.10).
The projected salary increases for 2021 by company size are
more moderate than the effective salary increases in 2020.
Small companies are expecting the highest salary increase for
2021 (4.01 percent). Furthermore, the drop is most acute for
small companies when comparing expected wage increases
for 2021 with the effective increase in 2020 (4.74 percent)
(Figure 3.10).
Comparison: Production Workers and Level of Seniority
The survey analyzes wage developments across 39 different
roles. Five roles (blue-collar, operator, shift leader, supervisor,
and plant manager) are grouped as production workers. The
white-collar professionals are grouped based on work
experience (junior, mid-level, and senior professionals). In the
next paragraphs, the wage developments across these
categories will be analyzed – also on regional levels.
For production workers and all levels of seniority (junior, mid-
level, and senior professionals), the effective salary increases
for 2020 are below the expected increases for 2020 made in
2019 – on a national level, as well as within each of the
analyzed regions. These deviations between effective and
expected salary increases for 2020 are more pronounced for
production workers and junior professionals, than they are for
mid-level and senior professionals. This is particularly the case
in Shanghai, Taicang and Kunshan, and Other YRD (Figure
3.11).
In Suzhou, Beijing, and Tianjin, production workers experience
the biggest decrease between their effective salary increase
for 2020 and their projection from last year, in comparison
with those of junior, mid-level, and senior professionals.
Junior professionals see a moderate decrease in these three
regions (Figure 3.11).
In Shenzhen and Guangzhou, junior professionals present the
biggest gap between their effective salary increase in 2020
and their expected increase of last year for 2020. However,
production workers in Shenzhen and Guangzhou experience
moderate decreases when comparing their effective salary
increases in 2020 with the initial projections (Figure 3.11).
When looking at production workers, and junior, mid-level
and senior professionals, the differences between the
expected salary growth for 2021 and the expected increase
for 2020 present similar decreases. Production workers’
expected increase for 2021 is 3.86 percent, 1.74 p.p. below
last year’s projection for 2020; junior professionals’ projection
for next year is 4.05 percent, 1.73 p.p. below 2020’s
expectation; mid-level professionals’ expected wage increase
for 2021 is 3.90 percent, 1.73 p.p. below last year’s results;
and senior professionals’ expected salary increase for 2021 is
3.63 percent, 1.70 p.p. below last year’s projection (Figure
3.11).
However, differences arise at the regional level. There are
regions with a lesser discrepancy between the expected
increases of 2021 and 2020, and others where the gap is
noticeable. Among the regions with lesser discrepancy,
Taicang and Kunshan’s expected salary increase for 2021 for
production workers, junior, and mid-level professionals is
about one p.p. below the expected increase for 2020. For
senior professionals, the discrepancy is even lower: the
expected wage increase for 2021 in Taicang and Kunshan is
3.51 percent, 0.68 p.p. below last year’s projection (Figure
3.11).
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5.60
5.66
5.50
4.91
5.98
6.42
5.91
5.22
5.60
5.83
5.77
4.04
3.88
4.15
2.95
4.56
4.06
4.90
3.91
5.11
4.93
4.12
3.86
3.82
3.58
3.84
3.52
4.06
4.48
3.83
4.87
3.13
4.35
CHINA
Shanghai
Suzhou
Taicang & Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Figure 3.11: Regional Wage Developments by Production Workers and Level of Seniority
2020–2021, in %
Production workers: aggregate from the following roles in the survey: Blue-Collar, Operator, Shift Leader, Supervisor, and Plant Manager. Junior positions: aggregate of the data forprofessionals with 0 to 3 years of job experience from the following nine functional areas surveyed: Administration, Sales, Purchasing, Finance, HR, Quality Control, Engineering / R&D,Logistics, Consultant / Project Manager, and the two individual roles: IT Staff, and Legal Staff. Mid-Level positions: aggregate from data for professionals with 4 to 7 years of jobexperience from the nine functional areas surveyed. Senior positions is the aggregate from data for professionals with 8 or more years of job experience from the nine functional areassurveyed, and the two individual roles IT Manager, and Legal Manager. Other YRD: Other Yangtze River Delta areas; Other PRD: Other Pearl River Delta areas.
Expected 2020 Effective 2020 Expected 2021
5.78
5.82
4.74
5.26
6.10
6.09
5.44
5.15
7.82
7.43
5.36
4.24
4.24
3.67
3.39
4.64
5.13
5.28
3.76
4.42
5.41
3.89
4.05
4.19
3.25
4.36
3.50
4.54
4.02
4.19
4.06
4.43
3.90
5.63
5.77
4.93
5.28
5.69
5.59
5.33
5.17
7.15
6.59
5.56
4.15
4.30
3.42
3.48
4.60
4.44
4.81
3.94
3.75
4.86
3.82
3.90
3.99
3.16
4.24
3.59
4.14
4.32
3.89
3.76
3.53
3.92
5.33
5.37
4.70
4.44
5.62
5.76
5.12
5.12
6.16
6.20
5.67
3.96
4.04
3.55
3.23
4.49
4.10
4.80
3.76
3.28
4.90
3.53
3.63
3.67
2.91
3.76
3.51
3.56
3.98
3.86
3.65
3.34
3.88
Production Workers Junior Professionals Mid-Level Professionals Senior Professionals
Shenzhen and Guangzhou report considerable discrepancies
between the expected salary increases for 2021 and 2020
among junior, mid-level, and senior professionals. In
Guangzhou, production workers’ expected wage increase for
2021 is 3.13 percent, 2.70 p.p. below last year’s projection.
Shenzhen reports a smaller gap: Shenzhen’s 4.87 percent
production workers’ expected wage increase for 2021 is 0.73
p.p. below the projection from 2019, a mild decrease in the
current context. (Figure 3.11).
The expected salary increases for 2021 are below the
effective salary increases for 2020 for production workers,
junior, mid-level, and senior professionals. The majority of
regions are putting forward more conservative projections.
There are only two exceptions: Taicang and Kunshan, and
Other PRD. The positive outlook toward 2021 in comparison
with the effective increases this year spans throughout
production-based roles and all levels of seniority (Figure
3.11).
Detailed Comparison by Industry
Figures 3.12 and 3.13 illustrate detailed results based on
industry. Figure 3.12 combines industry results with regions
and company size to compare the expected salary increases
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Figure 3.12: Detailed Industry Wage Developments
By Region and Company Size, Company Size by Number of Employees, in % and “Diff.” in p.p.
Effective 2020
Expected 2021
Diff. (p.p.)
Effective 2020
Expected 2021
Diff. (p.p.)
Effective 2020
Expected 2021
Diff. (p.p.)
Effective 2020
Expected 2021
Diff. (p.p.)
Shanghai 4.08 3.86 -0.22 3.72 3.83 0.11 2.21 2.73 0.52 5.17 3.34 -1.83
Suzhou 3.61 3.15 -0.46 2.85 2.93 0.08 2.20 2.16 -0.04 3.14 1.89 -1.25
Taicang & Kunshan 3.17 3.96 0.79 3.20 3.72 0.52 3.33 3.96 0.63 4.29 3.69 -0.60
Other YRD 4.47 3.51 -0.96 4.74 3.72 -1.02 3.52 3.50 -0.02 - - -
Beijing 4.38 3.91 -0.47 3.62 3.51 -0.12 7.27 5.71 -1.56 - - -
Tianjin 4.82 4.12 -0.70 4.71 4.92 0.21 4.34 3.64 -0.70 - - -
Other North 3.84 3.87 0.04 4.42 3.01 -1.41 3.48 3.66 0.18 - - -
Shenzhen 3.86 3.88 0.02 2.22 2.78 0.56 - - - 3.90 1.93 -1.97
Guangzhou 4.97 3.55 -1.42 5.78 5.35 -0.43 - - - - - -
Other PRD 3.80 4.00 0.20 2.73 3.80 1.06 - - - 6.87 6.91 0.04
Less 50 4.74 4.01 -0.72 3.85 3.92 0.07 5.75 3.12 -2.62 4.94 4.64 -0.30
50-250 3.85 3.76 -0.09 3.96 3.76 -0.20 3.16 3.77 0.61 4.15 3.92 -0.23
More 250 3.85 3.72 -0.13 3.51 3.53 0.02 3.06 3.42 0.37 5.06 3.41 -1.65
Total 4.03 3.79 -0.24 3.81 3.73 -0.08 3.34 3.50 0.16 4.74 3.83 -0.91
CHINA Machinery & Industrial Equip. Automotive Plastic & Metal Products
Re
gio
nC
om
p. S
ize
Effective 2020 and expected 2021 wage increases in percent. The difference between the effective 2020 and the expected 2021 increases in p.p. Averages presented only when there isa minimum of 35 observations available at both the effective 2020 and expected 2021 increases. When the difference falls within the interval [-0.05, +0.05] it has been highlightedWhen the difference is above 0.05, the value has been highlighted . . When the difference is below -0.05, the value has been highlighted .
.
51.2
46.0
44.3
35.9
26.4
20.7
16.1
14.9
12.3
11.1
10.6
8.9
7.1
50.8
43.9
39.6
35.8
20.9
16.0
12.8
12.8
10.7
12.8
9.1
7.5
7.5
54.9
41.2
53.9
56.9
42.2
26.5
14.7
8.8
15.7
12.7
10.8
11.8
7.8
46.9
25.0
50.0
25.0
34.4
12.5
6.3
18.8
3.1
3.1
9.4
0.0
6.3
Figure 3.13: Measures Taken Due to COVID-19 by Industry
Measures Taken by German Companies, in %
Hiring Stop
Remote Work
HR Gov. Support Measures
Cut Planned Trainings
Obligatory Annual Leave
Cut Bonus/Appraisals
Digitalization of Work Processes
More Training Opportunities
Cut Extra Benefits
Lay-Off
Temporary Reduction GBS
Changing Long-term HR Strategy
Annual Reduction GBS
CHINA Machinery & Industrial Equip. Automotive Plastic & Metal Products
Sample: 576 companies. Machinery & Industrial equipment, 187 companies; Automotive, 102 companies; Plastic & Metal Products, 32 companies; Electronics, 42 companies;Chemicals, 25 companies; Other, 188 companies from several industries (Medical Supplies, Finance, Construction, etc.). Multiple answers possible per contributor. Cut extrabenefits may include the following: supplementary health insurance, life insurance, overtime, children allowances, meal and transportation allowances, supplementary housingfunds, retention bonuses. GBS: Gross Base Salary.
#1
#2
#3
#1
#2
#3
#1
#2
#3
#3
#2
#1
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Shanghai
Suzhou
Taicang & Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Less 50
50-250
More 250
Total
Effective 2020
Expected 2021
Diff. (p.p.)
Effective 2020
Expected 2021
Diff. (p.p.)
Effective 2020
Expected 2021
Diff. (p.p.)
3.10 2.96 -0.14 4.60 3.63 -0.97 5.13 4.71 -0.42
4.54 4.69 0.15 - - - 5.42 3.01 -2.41
- - - 1.11 3.75 2.65 2.19 5.43 3.23
4.63 3.61 -1.02 5.78 4.99 -0.80 4.64 2.63 -2.01
- - - - - - 4.03 3.50 -0.53
5.40 3.84 -1.55 - - - - - -
- - - - - - 4.74 8.43 3.69
- - - - - - 4.75 4.50 -0.25
- - - - - - 4.20 2.20 -2.00
3.80 3.29 -0.50 - - - 4.22 3.93 -0.29
2.73 2.49 -0.24 6.22 3.54 -2.67 5.57 4.70 -0.86
3.85 3.78 -0.07 3.73 4.10 0.37 4.07 3.64 -0.44
4.14 3.90 -0.25 3.29 5.21 1.92 4.95 4.26 -0.69
3.80 3.64 -0.16 4.33 4.19 -0.14 4.75 4.10 -0.64
Electronics Chemical Other
Re
gio
nC
om
p. S
ize
47.6
38.1
57.1
33.3
21.4
21.4
7.1
21.4
23.8
7.1
9.5
11.9
9.5
48.0
60.0
44.0
32.0
20.0
28.0
12.0
24.0
20.0
0.0
4.0
8.0
0.0
51.6
54.3
39.9
27.7
23.9
22.3
24.5
17.0
10.1
12.2
13.3
9.6
6.9
Electronics Chemical Other
Hiring Stop
Remote Work
HR Gov. Support Measures
Cut Planned Trainings
Obligatory Annual Leave
Cut Bonus/Appraisals
Digitalization of Work Processes
More Training Opportunities
Cut Extra Benefits
Lay-Off
Temporary Reduction GBS
Changing Long-term HR Strategy
Annual Reduction GBS
Me
asu
res
Tak
en
Du
e t
o C
OV
ID-1
9
#3
#2
#1
#1
#2
#3
#1
#2
#3
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for 2021 with the effective increases recorded for 2020.
Figure 3.13 presents the measures taken by companies to
mitigate the impact of COVID-19 by industry.
As mentioned earlier, the Automotive industry was the only
sector where the expected salary growth for 2021 exceeded
the effective increase for 2020. However, this is only the
case for mid-sized and large automotive companies, with an
expected wage increase for 2021 of 3.77 percent and 3.42
percent, respectively. Small companies in the Automotive
industry are more conservative in their prospects for next
year, and the 3.12 percent expected salary increase for 2021
is 2.62 p.p. below the effective increase in 2020 (Figure
3.12).
Additionally, most of the Automotive companies that
contributed to this survey are located in Shanghai (26.5
percent), Other North (24.5 percent), and Taicang and
Kunshan (about 15.7 percent). The Automotive industry
concentration in these regions (66.7 percent) is much higher
than that of the other surveyed industries (55.5 percent). In
these regions, the expected salary growth for 2021 tends to
be higher than the effective increase for 2020. Such a pattern
is not unique to the Automotive industry: Machinery and
Industrial Equipment also present expected wage growth for
2021 above the actual wage growth for 2020 in these
regions (Figure 3.12).
Figure 3.12 provides further insight into how Taicang and
Kunshan, and Other PRD produce expected wage increases
for 2021 that are above the effective increases for 2020.
In Taicang and Kunshan, Other industries, Machinery and
Industrial Equipment, Automotive, and Chemicals maintain a
positive outlook for next year. However, Plastic and Metal
Products’ projected wage increase for 2021 remain 0.6 p.p.
below the effective increase for 2020 (Figure 3.12).
In Other PRD, Machinery and Industrial Equipment are
projecting a wage increase for next year that surpass this
year’s effective increase; Plastic and Metal Products are
putting forward an increase for 2021 that is in line with this
year’s increase (0.04 p.p. above). Both industries comprise
around 36.0 percent of the observations available at Other
PRD. However, Electronics – which accounts for around 40.0
percent of the data of Other PRD – is putting forward a 3.29
percent expected wage increase for 2021, 0.50 p.p. below
the effective salary growth this year (Figure 3.12).
Figure 3.13 provides insights on the measures taken by
different industries to mitigate the impact of COVID-19.
Machinery and Industrial Equipment, which account for 32.5
percent of the overall sample, do not differ significantly from
China’s overall results. However, the following measures are
used less than average: obligatory annual leave (20.9 percent,
below China’s overall 26.4 percent), use of HR government
support measures (39.6 percent vs. China’s 44.3 percent), or
cuts on bonuses (16.0 percent vs. China’s 20.7 percent)
(Figure 3.13).
The Automotive industry has resorted to several measures
surpassing the recorded average, such as: cuts in planned
training (56.9 percent vs. China’s 35.9 percent), obligatory
annual leave (42.2 percent vs. China’s 26.4 percent), or the
use of HR government support measures (53.9 percent vs.
China’s 44.3 percent), hiring stop (54.9 percent vs. China’s
51.2 percent) (Figure 3.13).
Plastic and Metal Products companies have made use of the
HR government support measures and obligatory annual
leave more often than average (50.0 percent vs. China’s 44.3
percent, 34.4 percent vs. China’s 26.4 percent, respectively).
However, the industry turned less to the following measures:
remote work (25.0 percent vs. China’s 46.0 percent), cuts on
planned training (25.0 percent vs. China’s 35.9 percent), cuts
of extra benefits (3.1 percent vs. China’s 12.3 percent), cuts
on bonuses (12.5 percent vs. China’s 20.7 percent), or layoffs
(3.1 percent vs. China’s 11.1 percent) (Figure 3.13).
Electronics tended to make use of HR government support
measures more than average (57.1 percent vs. China’s 44.3
percent), introducing cuts on extra benefits (23.8 percent vs.
China’s 12.3 percent), and more training opportunities (21.4
percent vs. China’s 14.9 percent). It leaned less on the
digitalization of work processes (7.1 percent vs. China’s 16.1
percent) and remote work (38.1 percent vs. China’s 46.0
percent) (Figure 3.13).
Companies in the Chemicals industry resorted more often
than average to remote work (60.0 percent vs. China’s 46.0
percent), more training opportunities (24.0 percent vs. China’s
14.1 percent), and cuts on extra benefits (20.0 percent vs.
China’s 12.3 percent). In the Chemicals industry, no company
mentions layoffs (11.1 percent for China), nor the annual
reduction of gross base salaries (7.1 percent for China). The
industry is also less prone to a temporary reduction of gross
base salaries (4.0 percent vs. China’s 10.6 percent) or
obligatory annual leave (20.0 percent vs. China’s 26.4
percent) (Figure 3.13).
To conclude, Figure 3.14 compares the actual wage
developments in 2020 with the expectation from 2019 for
2020, based on position. As previously mentioned, the overall
effective wage increase of 4.03 percent is 1.50 p.p. below the
expected wage increase for 2020. Such a gap remains
consistent throughout the 39 different roles measured in the
survey. However, for roles such as Junior Engineer, Junior PM
/ Consultant, Deputy General Manager / Branch Manager
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Expected 2020 (%) Effective 2020 (%) Difference (p.p.)*
Production Workers Blue Collar 5.64 4.09 -1.55
Production Workers Operator 5.70 4.05 -1.65
Production Workers Shift Leader 5.68 4.29 -1.39
Production Workers Production Supervisor 5.60 4.08 -1.52
Production Workers Production / Plant Manager 5.38 3.68 -1.70
Admin Junior Admin 5.72 4.58 -1.14
Admin Mid-Level Admin 5.69 4.31 -1.38
Admin Senior Admin 5.21 4.35 -0.86
Sales Junior Sales 5.72 4.03 -1.69
Sales Mid-level Sales 5.64 4.12 -1.52
Sales Senior Sales 5.17 3.63 -1.54
Purchasing Junior Purchasing 5.53 4.11 -1.42
Purchasing Mid-Level Purchasing 5.36 3.97 -1.39
Purchasing Senior Purchasing 5.23 3.89 -1.34
Finance Junior Finance 5.79 4.49 -1.30
Finance Mid-Level Finance 5.56 4.09 -1.47
Finance Senior Finance 5.27 3.86 -1.41
HR Junior HR 5.88 4.24 -1.63
HR Mid-Level HR 5.63 4.52 -1.11
HR Senior HR 5.31 4.26 -1.05
Quality Junior Quality 5.54 3.71 -1.83
Quality Mid-Level Quality 5.50 3.87 -1.63
Quality Senior Quality 5.30 3.83 -1.47
Engineering / R&D Junior Engineer / R&D 6.44 4.41 -2.03
Engineering / R&D Mid-Level Engineer / R&D 5.98 4.04 -1.94
Engineering / R&D Senior Engineer / R&D 5.74 4.12 -1.62
Logistics Junior Logistics 5.56 4.18 -1.38
Logistics Mid-Level Logistics 5.56 4.03 -1.53
Logistics Senior Logistics 5.47 3.81 -1.66
Project Mgt. / Consultant Junior PM / Consultant 6.78 4.80 -1.97
Project Mgt. / Consultant Mid-Level PM / Consultant 6.08 4.67 -1.41
Project Mgt. / Consultant Senior PM / Consultant 5.57 4.21 -1.36
Senior Management Deputy GM / Branch Manager 4.98 2.99 -1.99
Senior Management CEO / GM / Managing Director 4.70 2.77 -1.92
Specialists IT Manager 5.48 4.00 -1.48
Specialists IT Staff 5.42 3.68 -1.74
Specialists Legal Staff 5.63 3.82 -1.81
Specialists Legal Manager 5.16 4.01 -1.16
Specialists Driver 4.84 3.39 -1.45
ALL 5.53 4.03 -1.50
Functional Area Position
Figure 3.14: Expected and Effective Wage Increases 2020
By Position, in % and Difference in p.p.
(Deputy GM/BM), and Chief Executive Officer / General
Manager / Managing Director (CEO/GM), the gap deepens,
reaching a two p.p. range. A smaller discrepancy was reported
for Senior Admin (0.86 p.p.) and Senior HR (1.05 p.p.)
positions (Figure 3.14).
* Difference between the effective and the expected 2020 wage increases, in p.p.This is for reference only. The full version is member-exclusive
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4. Wage Levels
The total cost per employee (TCE) among German companies
in China has a median value of RMB 15,317 / month (Figure
3.15).
The median wages will be used as reference value for
comparisons. As the median is less affected by extreme wage
deviations, it represents a more reliable measure of centrality
than the mean wages.
At a regional level, Shanghai and Beijing – both with a median
of RMB 20,000 / month – remain the highest paying
locations. Shenzhen and Tianjin, with medians of RMB 16,000
/ month and RMB 15,558 / month respectively, are the other
two regions that yield a TCE that exceeds the national value.
On the other hand, the lowest median TCE values are those
of Other PRD (RMB 10,035 / month) and Guangzhou (RMB
12,000 / month) (Figure 3.15).
By city tier, the highest median TCE is for tier-1 cities (RMB
19,075 / month). The average TCE in tier-2 cities is 61.2
percent higher than that of the China wide median TCE; 47.1
percent higher in tier-3 cities. In tier-1 cities, average TCE is
44.3 percent higher than the median TCE (Figure 3.16).
By industry, the highest median TCE was reported for IT /
Telecommunications (RMB 27,747 / month), Consulting /
Legal Services (RMB 22,024 / month), and Medical Supplies
(RMB 20,000 / month). The most moderate compensation
levels are in the fields of Plastic and Metal Products (RMB
12,075 / month), Consumer Goods (RMB 12,800 / month),
and Chemicals (RMB 13,600 / month) (Figure 3.17).
Small companies present a higher median TCE (RMB 18,000 /
month). Mid-sized and large companies both yield the same
median TCE, RMB 15,000 / month (Figure 3.18).
Comparing compensation levels by production workers, level
of seniority, and senior management, results show that as
compensation levels rise with seniority. Thus, mid-level
professionals median TCE is 1.63 times higher than that of
junior professionals. In turn, senior professionals median TCE
is 2.04 times that of mid-level professionals (Figure 3.19).
Figure 3.15: Wages at Regional Level
Total Cost per Employee / Month, in Thousand RMB
Median Mean
15.3
20.0
12.5
13.0
12.7
20.0
15.6
12.5
16.0
12.0
10.0
23.5
28.6
20.6
20.0
19.7
27.0
24.3
20.1
24.9
19.6
15.3
CHINA
Shanghai
Suzhou
Taicang & Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Total Cost per Employee: The gross base salary, including the mandatory social securityand housing fund contributions by the employer plus any other extra benefits theemployer is providing. Other YRD: Other Yangtze River Delta areas; Other PRD: OtherPearl River Delta areas.
Median
Figure 3.16: Comparison of Wages by City Tier
Total Cost per Employee / Month, in Thousand RMB
Mean
15.3
19.1
13.011.0
23.5
27.5
21.0
16.2
CHINA Tier 1 Tier 2 Tier 3
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Figure 3.17: Comparison of Wages by Industry
Total Cost per Employee / Month, in Thousand RMB
Median Mean
15.3
15.0
15.5
12.1
14.7
13.6
12.8
20.0
22.0
27.7
23.5
23.7
22.7
19.3
22.1
22.6
20.2
30.0
32.4
33.9
CHINA
Machinery & Industrial Equipment
Automotive
Plastic & Metal Products
Electronics
Chemicals
Consumer Goods
Medical Supplies
Consulting / Legal Services
IT / Telecommunications
Only industries displayed with a minimum of 10 surveyed companies, providing at least100 observations in all 39 positions.
15.318.0
15.0 15.0
23.5
27.2
23.0 22.2
CHINA Less 50 50-250 More 250
Median
Figure 3.18: Comparison of Wages by Company Size
Company Size by Number of Employees. Total Cost per
Employee / Month, in Thousand RMB
Mean
15
.3
10
.0
9.0 14
.7 30
.0
69
.0
10
7.3
23
.5
15
.5
10
.6
16
.4 33
.7
73
.7
11
6.0
CHINA ProductionWorkers
Junior Mid-Level Senior DeputyGM/BM
CEO/GM
Figure 3.19: Comparison of Wage Level by Production
Workers, Level of Seniority & Senior Management
Total Cost per Employee / Month, in Thousand RMB
Median Mean
Deputy GM/BM: Deputy General Manager / Branch Manager. CEO/GM: Chief ExecutiveOfficer / General Manager / Managing Director.
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5. Compensation Levels: Perception
Despite the impact of COVID-19 on actual wage growth
(Figure 3.4) and expected wage growth (Figure 3.6)
developments, German companies’ relative perception of
their own compensation levels, relative to other companies,
remains fairly stable in comparison with recent years.
For blue-collar workers, 69.0 percent of participants consider
their compensation in line with that of other companies. 23.7
percent believe they pay higher salaries than the average
market pay, 1.3 p.p. above last year’s findings. The proportion
of participants that perceive their blue-collar workers’
compensation to be lower than the market average is 7.3
percent, a 2.1 p.p. decrease from last year’s perception
(Figure 3.20).
Companies in certain regions perceive their compensation for
blue-collar workers - compared to market compensation -
higher than the average of 23.7 percent of China’s total.
Among those regions, the highest proportions are in Tianjin
(33.3 percent), Suzhou (32.3 percent), and Taicang and
Kunshan (31.3 percent) (Figure 3.20).
For white-collar professionals, 72.1 percent of the
participants believe their compensation is on par with that of
other companies. This is a 5.2 p.p. increase over 2019’s
results. Only 5.6 percent of the companies consider the
compensation of their white-collar employees to be below
the market, 1.8 p.p. below last year’s results. 22.2 percent of
the participants believe their compensation to be higher than
the market average, a 3.5 p.p. decrease over 2019’s findings
(Figure 3.21).
Just as with blue-collar employees, some regions have a large
portion of companies that perceive their compensation for
white-collar professionals, when compared to the market
average, as substantially higher than China’s average. Such is
the case for Suzhou and Other PRD, where 32.3 percent and
31.3 percent of the participants, respectively, perceive the
compensation of white-collar employees to be above the
market (Figure 3.21).
22.6 22.6 21.4 22.4 23.7
66.071.1 71.6
68.2 69.0
11.4 6.3 7.0 9.4 7.3
2016 2017 2018 2019 2020
Figure 3.20: Perceived Salary Level of Blue-Collar Workers in
Comparison to Other Companies
In %
7.6
9.7
12.5
3.8
7.7
11.1
9.1
3.2
75.7
58.1
56.3
67.9
66.7
55.6
61.4
82.4
93.3
67.7
16.8
32.3
31.3
28.3
25.6
33.3
29.5
17.6
6.7
29.0
Development
Average HighLow
Results by Company Size (Number of Employees)
Shanghai
Suzhou
Taicang / Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Perceived level of blue-collar workers’ salary in comparison to market average. Other YRD:Other Yangtze River Delta areas; Other PRD: Other Pearl River Delta areas.
Results by Region
Less 50
50-250
More 250
6.3
7.5
8.3
68.8
68.2
70.3
25.0
24.4
21.4
Results by Industry
Chemicals
Plastic/Metal
Products
Automotive
Machinery/Industrial
Equipment
Others
Electronics
7.0
7.4
9.4
5.0
8.7
7.7
65.5
64.9
62.5
82.5
65.2
74.6
27.5
27.7
28.1
12.5
26.1
17.7
Average HighLow
Average HighLow
Average HighLow
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Figure 3.21: Perceived Salary Level of White-Collar Workers
in Comparison to Other Companies
In %
3.9
3.2
8.2
3.7
7.0
7.4
8.7
12.5
5.9
6.3
71.3
64.5
71.4
77.8
75.4
74.1
67.4
75.0
94.1
62.5
24.8
32.3
20.4
18.5
17.5
18.5
23.9
12.5
31.3
Development
Average HighLow
Shanghai
Suzhou
Taicang / Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Results by Region
Less 50
50-250
More 250
4.5
7.0
5.2
68.2
72.9
76.1
27.3
20.1
18.7
Results by Industry
Chemicals
Plastic/Metal
Products
Automotive
Machinery/Industrial
Equipment
Others
Electronics
7.1
4.0
9.4
10.0
4.0
3.8
71.2
76.0
68.8
72.5
76.0
71.0
21.7
20.0
21.9
17.5
20.0
25.3
Average HighLow
Average HighLow
26.0 23.3 24.2 25.722.2
65.169.6 69.3 66.9
72.1
8.97.1 6.5
7.4 5.6
2016 2017 2018 2019 2020
Average HighLow
Perceived level of white-collar workers’ salary in comparison to market average. OtherYRD: Other Yangtze River Delta areas; Other PRD: Other Pearl River Delta areas.
Results by Company Size (Number of Employees)
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6. Productivity
The survey measures how contributors perceive the
evolution of wages within their organization, taking into
account productivity and personnel qualifications.
In 2020, 62.3 percent of participants consider compensation
levels reasonable. That is a 9.8 p.p. increase YoY. In turn, the
proportion of companies that consider compensation either
high or low has shrunk. The highest decrease, with six p.p.
YoY, is that of those considering compensation to be high
(18.5 percent) (Figure 3.22).
The notable increase in organizations that consider
compensation reasonable could derive from companies’
difficulty to assess compensation accurately during the
COVID-19 pandemic, and the measures taken to mitigate the
impact. 46.0 percent of the survey participants mention they
turned to alternative work arrangements (i.e., remote work),
44.3 percent have used HR government support measures,
20.7 percent have cut bonuses, 12.3 percent have cut extra
benefits, and 10.6 percent have temporarily reduced gross
base salaries (Figure 3.1). All these initiatives have an impact
on compensation, and potentially also on productivity.
Among German companies, the share of labor costs
represents 31.7 percent of the total costs on average. In
small companies, this proportion amounts to 39.9 percent.
Mid-sized companies’ share of labor costs out of total costs
amounts to 27.6 percent; and large companies report a total
of 25.9 percent. While there are no significant changes
compared with last year’s results, the weight of labor costs
has increased slightly in relation to total costs across all
company sizes (Figure 3.23).
Figure 3.22: Evaluation of Wage Levels Considering
Productivity
In %
21.5
26.7
20.4
16.4
20.0
14.8
13.6
9.1
12.5
6.5
64.1
43.3
53.1
67.3
60.0
74.1
54.5
68.2
62.5
74.2
14.3
30.0
26.5
16.4
20.0
11.1
31.8
22.7
25.0
19.4
Development
Reasonable LowHigh
Shanghai
Suzhou
Taicang / Kunshan
Other YRD
Beijing
Tianjin
Other North
Shenzhen
Guangzhou
Other PRD
Results by Region
Less 50
50-250
More 250
22.8
18.4
12.8
59.9
63.3
64.2
17.3
18.4
23.0
Chemicals
Plastic/Metal
Products
Automotive
Machinery/Industrial
Equipment
Others
Electronics
17.7
18.4
18.8
17.9
13.6
20.0
65.2
57.1
56.3
66.7
68.2
61.7
17.1
24.5
25.0
15.4
18.2
18.3
30.3 28.922.0 24.5
18.5
46.049.4
53.7 52.5
62.3
23.7 21.7 24.3 23.019.2
2016 2017 2018 2019 2020
Reasonable LowHigh
Reasonable LowHigh
Reasonable LowHigh
Formulation of the surveyed question: “Taking productivity and qualifications into account,how do you evaluate salary levels in China?” Other YRD: Other Yangtze River Delta areas;Other PRD: Other Pearl River Delta areas.
Results by Company Size (Number of Employees)
Results by Industry
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Important Neutral Not Important n/a
83.8
83.3
76.5
75.5
64.7
62.7
65.2
49.5
34.3
94.3
87.9
90.4
75.2
78.3
73.9
62.4
79.6
19.1
Figure 3.25: Main Factors for Productivity Increase by
Company Size
At Companies with Less 50 Employees vs. More 250 Employees
Difference in the Degree of Importance (in p.p.)More 250Less 50 employees
Very Important + Important (in %) at:
10.4
4.6
14.0
-0.3
13.6
11.1
-2.8
30.1
-15.2
Figure 3.24: Main Factors for Productivity Increase
Ranked by Very Important and Important, in %
38.0
17.5
25.9
14.8
22.2
13.0
9.9
17.4
4.2
52.1
69.4
59.0
63.4
46.4
54.9
53.6
46.2
20.8
6.9
10.1
9.4
18.4
24.1
23.4
29.7
20.0
48.1 14.4
4.0
5.2
5.0
11.5
12.5
Very Important
Improved Internal Processes
Better Internal Training
Better Work Experience
Use of Key Performance Indicators
Increased Automation
Improved Retention
Improved General Education
Digital Work Processes
Remote Work
Improved Internal Processes
Better Internal Training
Better Work Experience
Use of Key Performance Indicators
Increased Automation
Improved Retention
Improved General Education
Digital Work Processes
Remote Work
29.9
38.8
26.123.1
31.7
39.9
27.6 25.9
CHINA Less 50 50-250 More 250
2019 2020
Figure 3.23: Share of Labor Costs over Total Costs
Company Size by Number of Employees, in %
When reviewing the most important factors to improve
productivity, improving internal processes, better internal
training, and the use of key performance indicators (KPIs)
continue to top the list. In 2020, two new factors have been
surveyed: digital work processes and remote work. The
former was perceived as being of comparatively moderate
importance, with 22.2 percent of contributors rating it as
very important, and another 46.4 percent as important.
Remote work is at the bottom of the ranking, despite being
one of the most common measures taken by companies to
mitigate COVID-19’s impact. This suggests companies see
remote work more as a crisis-induced measure to deal with
the contingencies associated with COVID-19, rather than a
tool to improve productivity (Figures 3.24 and 3.1).
Improving internal processes, better internal training, and the
use of KPIs are the top-3 factors chosen by organizations to
increase productivity across all company sizes. However, the
relative importance of the other surveyed factors varies
slightly based on company size. Whereas large companies
show a preference for increased automation (79.6 percent of
contributors in this segment consider it very important or
important) and digital work processes (78.3 percent), small
companies tend to not see them as critical measures that
elevate productivity (Figure 3.25).
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* Relocation to lower labor cost areas.
65
.5
25
.7
4.4
2.1
2.3
78
.1
11
.9
5.0
1.0 4.0
60
.7
30
.4
4.7
2.8
1.4
55
.3
37
.3
3.3
2.7
1.3
No strategicchangesplanned
Plan toincrease
automation
Relocationwithin China*
Relocation toanothercountry*
Other
60.1
25.7
7.03.0 4.2
65.5
25.7
4.4 2.1 2.3
No strategicchangesplanned
Plan toincrease
automation
Relocationwithin China*
Relocation toanothercountry*
Other
Figure 3.28: Strategic Changes Due to Rising Labor Costs
by Perception on Salaries
In %
Figure 3.27: Strategic Changes Due to Rising Labor Costs by
Company Size
Company Size by Number of Employees, in %
* Relocation to lower labor cost areas.
* Relocation to lower labor cost areas.
Companies that perceive wages as high considering productivity & qualification
Companies that perceive wages as low considering productivity & qualification
China
2019 2020
65
.5
25
.7
4.4
2.1
2.3
63
.2
30
.2
3.8
0.0 2.8
53
.5
26
.7
7.9
6.9
5.0
No strategicchangesplanned
Plan toincrease
automation
Relocationwithin China*
Relocation toanothercountry*
Other
50-250 More 250Less 50China
Figure 3.26: Strategic Changes due to Rising Labor Costs
In %
The majority of the surveyed companies (65.5 percent) do
not plan strategic changes to deal with increasing labor costs.
When such plans exist, increasing automation is the preferred
option at 25.7 percent, similar to last year’s results. Plans to
relocate to areas with lower cost, whether in or outside of
China, have decreased. Whereas in 2019, 7.0 percent
planned to relocate within China, this year, only 4.4 declared
they plan to do so. 2.1 percent of the companies consider
relocating to another country in 2020, compared to 3.0
percent in 2019 (Figure 3.26).
When examining the data based on company size, the
intention to relocate to areas with lower labor costs has
decreased throughout all levels, except for the proportion of
large companies considering relocating outside of China: 2.7
percent, 1.2 p.p. above last year (Figure 3.27).
When German companies - considering productivity and staff
qualifications - perceive salaries as low, they consider in
higher proportion the possibility of increasing automation
(30.2 percent) to improve productivity. However, when
salaries are perceived as high, survey participants tend to
rather consider relocating to lower labor cost areas (Figure
3.28).
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Figure 3.29: Importance of Factors for Wage
Adjustments
Ranked by Very Important + Important, in %
51.7
41.5
10.2
6.8
22.2
6.4
6.4
3.0
3.5
3.1
5.2
6.4
43.6
50.0
58.3
50.0
34.5
47.7
39.2
39.8
38.4
37.8
29.3
23.8
9.2
3.1
6.3
24.8
33.5
27.3
35.4
36.8
47.2
42.7
39.6
33.7
28.0
37.3
5.7
7.8
6.3
8.3
6.3
9.2
8.2
18.9
24.5
26.0
4.2
4.0
8.2
4.2
9.2
3.8
6.3
11.3
12.8
17.4
26.4
22.7
9.2
1.9
3.0
1.4
0.7
0.9
43.6
28.5
32.5
8.9
10.1
7.3
6.9
ImportantVery Important
Individual Negotiations
Department Wide Negotiations
Collective Bargaining
Labor Bureau
Official Trade Union
Work Council
Figure 3.30: Importance of Factors for Wage Negotiations
Ranked by Very Important + Important, in %
7. Wage Determination
Company and individual performance continue to be
perceived as the most important factors for fixing wage
adjustments in 2020. Individual performance is considered
very important by 41.5 percent of the survey participants,
11.4 p.p. below last year’s perception. Company performance
is seen as very important by 51.7 percent of the contributors,
3.1 p.p. below 2019’s numbers (Figure 3.29).
COVID-19 has been surveyed in this edition as a factor for
fixing wage adjustments. COVID-19 is perceived as a
moderately important factor (fifth out of 13, 22.2 percent,
very important; 34.5 percent, important). Furthermore, the
impact of COVID-19 could also be reflected in the decline of
the relative importance associated with individual
performance, as described above (Figure 3.29).
The German Chamber Labor Market and Salary Report is
perceived as very important or important by nearly half of the
contributors: 45.6 percent (Figure 3.29).
Other government policies, minimum wage adjustments, or
government wage guidelines remain perceived as of low
importance by German companies in China for wage
adjustments (Figure 3.29).
When it comes to salary negotiations, individual negotiations
still top the ranking: 22.7 percent see those as very important,
5.7 p.p. below 2019 results. The impact of COVID-19 ranks
second among the most important factors for wage
negotiations (Figure 3.30).
Company Performance
Individual Performance
Inflation Adjustments
Competition with Other Companies
Seniority of Staff
Other Wage Reports
Meeting Expectations of Staff
German Chamber Labor Market & Salary Report
Retention of Staff
Government Wage Guidelines
Minimum Wage Adjustments
Other Government Policies
COVID-19
Very Important Important Neutral Not Important n/a
Impact of COVID-19
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Medium
27.4
31.8
21.0
15.3
7.5
12.0
6.4
2.3
4.2
3.0
8.5
12.2
53.3
48.1
48.1
53.0
42.7
28.6
17.9
19.8
17.7
18.8
13.2
6.9
14.1
12.5
11.3
14.6
20.0
21.9
37.5
37.0
35.9
30.7
36.8
37.3
32.5
14.6
27.6
35.1
8.0
7.1
8.7
19.8
36.3
42.9
37.7
37.3
42.4
62.0
52.4
49.0
High Low No Impact n/a
8. HR & Recruitment Challenges
Recruiting qualified personnel, rising labor costs, and
retaining qualified staff are considered the top HR challenges
impacting business operations, similar to previous years.
However, they are losing some of their prominence.
Recruiting qualified staff is seen as having a high impact in
business operations by 27.4 percent of the survey
participants, 7.4 p.p. below 2019’s results. 31.8 percent of
the contributors see rising labor costs as having a high impact,
7.1 p.p. below last year’s numbers. Retention of qualified
staff has a high impact on business operations for 21.0
percent of 2020’s contributors, a 9.6 p.p. drop from 2019’s
findings (Figure 3.31).
German companies in 2020 seem to follow similar strategies
for talent retention as in previous years. Salary adjustments,
bonus systems, and career advancement plans continue to be
regarded as the most effective ones, almost in the same
proportion as in 2019 (Figure 3.32).
Figure 3.32: Strategies for Retaining Qualified Staff
Ranked by Very Effective + Effective, in %
39.1
34.7
40.6
12.7
10.6
15.5
13.7
8.2
10.8
51.0
53.8
45.5
52.4
54.3
48.3
46.4
43.9
28.3
EffectiveVery Effective
Additional Annual Leave
Training / Education
International Placements
Salary Adjustments
Career Advancement
Work-life Balance
Flexible Working Hours
Paid Overtime
Bonus System
Figure 3.31: Impact of HR Related Challenges on
Business Operations
Ranked by High + Medium Impact, in %
Recruiting Qualified Staff
Rising Labor Costs
Retaining Qualified Staff
High Cost for Social Insurance / Housing Fund
High Staff Turnover
Willingness of Foreigners Seeking Employment in China
Dealing with Labor Bureau
Labor Arbitration Cases
Staff Shortage: Domestic Travel Restrictions
Staff Shortage: Inbound Travel Restrictions Foreign Employees
Strikes / Unrest
Collective Bargaining
High Cost for Training
Union Organization
This is for reference only. The full version is member-exclusive
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PoorFair
37.0
33.0
27.7
46.6
47.2
49.2
16.3
19.9
23.1
Manage Networks
Programming
Development of Apps
Good
* Adapted from OECD’s Digital Economy Paper “Skills for a Digital World”, 2016 Background report on the ministerial meeting on the digital economy. Some ICT skills are new additions tothe survey in 2019; others have been reformulated to better fit the OECD definition. **Managing networks, programming, and developing apps are skills that do not apply to a significantproportion of the companies contributing to the survey. For a clearer understanding on how these skills are perceived the percentages are recalculated against the number of contributionswhen such skills apply: Manage networks, 343 companies; Programming, 282 companies; Developing apps, 260 companies.
Ranked by Good, in %
Programming
Development of Apps
Manage Networks
Technical/Domain-specific Skills
Data Management and Analysis
Search and Collect Information
Complex Problem-solving
Critical Thinking
Creativity and Innovation
Ability to Learn and Improve
Communication
Ability to Respond to Rapid Changes
Teamwork
Execution/Decision-making
English Language Ability
Work Ethics
Reliability
ICTSpecialist Skills
ICTSoft Skills
Soft Skills
ICT Specialist Skills (Subset). Contributing sample, in %**
76.0
72.6
68.9
62.7
60.1
59.9
54.9
54.7
54.5
43.2
42.5
33.9
32.3
31.9
22.0
16.1
12.5
19.3
21.7
25.3
22.9
29.0
34.4
38.5
37.0
35.2
42.7
42.0
42.0
49.7
46.9
27.8
23.1
22.2
1.9
3.1
3.3
2.4
7.8
3.3
4.5
5.7
8.0
10.1
6.8
10.9
14.4
15.8
9.7
9.7
10.4
12.0
4.0
8.7
13.2
3.6
5.4
40.5
51.0
54.9
Reliability
Technical/Domain-specific Skills
Work Ethics
Complex Problem-solving
Communication
English Language Ability
Data Management and Analysis
Creativity and Innovation
Search and Collect Information
Critical Thinking
Teamwork
Ability to Learn and Improve
Ability to Respond to Rapid Changes
Execution/Decision-making
Manage Networks
Programming
Development of Apps
Good Fair Poor n/a
Figure 3.33: Evaluation of Local Staff Skills
Information and Communication Technology (ICT) Skills*
When asked to evaluate skills of local staff, the most
prevalent skills (ranked by ratings as good) mentioned are
reliability (76.0 percent), work ethics (72.6 percent), and
teamwork (68.9 percent) – similar to before. Technical /
domain-specific skills, complex problem solving, ability to
learn and improve, communication skills, ability to respond to
rapid changes, and English language abilities are also
perceived as good by more than half of the contributors
(Figure 3.33).
When applicable, ICT specialist skills such as managing
networks, programming, or app development, are regarded
mostly as fair (Figure 3.33).This is for reference only. The full version is member-exclusive
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26.0
22.9
14.8
9.0
10.4
4.5
6.1
6.1
3.1
56.4
54.9
53.0
49.8
38.7
29.3
25.9
25.9
25.3
11.1
14.4
25.2
31.1
31.1
37.2
34.2
30.6
50.0
3.3
3.8
4.3
5.4
15.8
24.1
29.2
33.0
17.5
15.6
16.1
8.3
10.8
10.4
3.3
2.8
1.0
0.7
1.0
28.5
26.2
33.7
28.0
26.6
17.5
12.0
10.4
10.2
9.0
4.3
Figure 3.36: Reasons Why Positions Cannot Be Filled
Ranked by Major Problem + Problem, in %
Figure 3.35: Most Difficult Positions to Recruit
Ranked by Very Difficult + Difficult, in %
Engineering / R&D
Sales
Technical Sales
Technical Service
Marketing
IT
Finance
Procurement
HR
Administration
Management
DifficultVery Difficult
No Problem n/aProblem Small ProblemMajor Problem
61.5 63.6 61.457.4 55.9
31.1 30.9 30.436.3 36.2
7.55.6 8.2
6.37.9
2016 2017 2018 2019 2020
Average HighLow
Figure 3.34: Effort Needed to Train Staff
To Reach the Desired Qualification Level, in %
Insufficient Professional Skills
High Salary Expectations
Insufficient English Skills
Insufficient Work Experience
Not Enough Applications
Lack of Experience at Foreign Company
Company is Not Competitive Enough
Company Location
Travel Restrictions Due to COVID-19
For the third consecutive year, the proportion of participants
who rate efforts needed to train staff as high has declined
slightly - 55.9 percent In 2020, a 1.5 p.p. below last year’s
results (Figure 3.34).
Technical sales and engineering and R&D professionals
remain the most difficult positions to recruit. Management
roles come third, although the percentage of contributors
that consider these roles very difficult to recruit has decreased
by 5.8 p.p. from 2019. Administration, procurement, finance,
and HR roles are not seen as particularly difficult to recruit
for (Figure 3.35).
The lack of sufficient skills and high salary expectations are
the most common reasons why positions cannot be filled
(Figure 3.36).
This is for reference only. The full version is member-exclusive
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3.1
1.3
2.6
6.3
CHINA Less 50 50-250 More 250
9. Employee Turnover & Additional HR Data
Average annual leave days and average sick days have
remained basically the same as in 2019, for both blue-collar
and white-collar employees. However, there are certain
variations with regards to staff turnover and employee
retention.
Staff turnover went from 14.0 percent in 2019 to 10.9
percent in 2020 for blue-collar workers; white-collar
professionals turnover moved from 10.6 percent to 8.8
percent. The average duration of workers in a single company
took a dive: from 50.9 months for blue-collar employees to
39.5 months; and from 54.3 months for white-collar
employees to 36.4 months (Figure 3.37).
In this edition, employee turnover due to COVID-19 in 2020
has also been surveyed. For blue-collar workers, turnover
averaged 3.1 percent, with 61.6 percent of participants
report no turnover due to COVID-19 in 2020. Among white-
collar professionals, the highest turnover rates were reported
for junior professionals (3.1 percent), followed by mid-level
professionals (1.9 percent). Senior white-collar professionals
report the lowest turnover rate, with 1.3 percent. In
conclusion, as the level of seniority increases, turnover tends
to decrease (Figure 3.38).
When analyzing the level of seniority by company size, the
6.3 percent turnover of junior white-collar professionals in
large companies is noticeable. Such percentage stands in
contrast to the 2.6 percent turnover in mid-sized companies,
and the 1.3 percent in small companies (Figure 3.38).
14.0
50.9
4.010.410.9
39.5
3.410.2
Turnover(in %)
Average duration in company
(months)
Average annual sick days
Average annual leave (in days)
10.6
54.3
3.8128.8
36.4
3.011.6
Turnover(in %)
Average duration in company
(months)
Average annual sick days
Average annual leave (in days)
2019 2020
Figure 3.37: Last Year’s Employee Turnover and HR Data
2019–2020
Blue-Collar Workers
White-Collar Professionals
Figure 3.38: Employee Turnover Due to COVID-19 in 2020
Company Size by Number of Employees, in %
3.2 3.6
2.4
3.9
CHINA Less 50 50-250 More 250
The data collected in 2020 refers to staff turnover, average duration in company, averageannual sick days and average annual leave of the previous year, 2019. Likewise, the datagathered in the 2019 edition refers to 2018.
Junior White-Collar Professionals
Sample: Blue-collar, 542 companies; Junior white-collar, 533 companies; Mid-level white-collar, 532 companies; Senior white-collar, 527 companies.
Blue-Collar Workers
1.31.9
1.20.6
CHINA Less 50 50-250 More 250
1.9 2.2 1.9 1.5
CHINA Less 50 50-250 More 250
Senior White-Collar Professionals
Mid-Level White-Collar Professionals
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10. Foreign Employees
The majority (74.1 percent) of the companies contributing to
the survey have foreign employees. 58.3 percent of the
surveyed small companies and 89.2 percent of the large
companies employ foreigners (Figure 3.39).
According to the data collected, as company size increases
(i.e., larger number of employees), the proportion of foreign
employees out of the total staff declines. In small companies,
foreign employees average 11.4 percent of the workforce;
mid-sized companies’ foreign employees account for about
3.0 percent of its headcount. In large companies, foreign
employees make up for 1.7 percent of the workforce (Figure
3.40).
When companies are asked whether they intend to replace
foreign employees with local staff in the future, 51.3 percent
indicate they have no changes planned. 24.6 percent of the
companies intend to replace some employees - 8.5 p.p.
below 2019’s results. The decline could be explained by
enterprises having already replaced a certain number of
foreign employees by local staff in the past years. However,
the intent to replace all foreign employees has slightly
increased: 5.7 percent in 2020, 2.1 p.p. above 2019 (Figure
3.41).
76.2 74.162.4 58.3
77.8 78.190.6 89.2
23.8 25.937.6 41.7
22.2 21.99.4 10.8
Figure 3.39: Share of Companies Employing Foreigners
Company Size by Number of Employees, in %
NoYes
20202019 20202019 20202019 20202019
CHINA Less 50 50-250 More 250
6.3
16.1
3.32.0
5.0
11.4
3.01.7
CHINA Less 50 50-250 More 250
Figure 3.40: Average Percentage of Foreign Employees
Company Size by Number of Employees, in %, percentage of
total employees
2019 2020
45.9
33.1
3.6
17.4
51.3
24.6
5.7
18.4
No Changes Replace Some Replace All Unknown
Figure 3.41: Intentions to Replace Foreign Employees with
Local Employees
In %
2019 2020
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Local Contract
Expat Contract
Project Based Contract
CommonVery Common
41.7
44.0
18.0
23.1
3.3
2.2
30.9
30.4
24.1
22.3
2.8
5.2
2019 2020
Figure 3.43: Common Types of Contracts for Foreigners
Ranked by Very Common + Common, in %
Figure 3.42: Reasons for Replacing Foreign Employees with
Local Employees
In %
78.1
43.0
38.3
36.7
25.8
9.4
Wage Levels
Business Contacts
Qualifications
Visa Process
COVID-19
Others
Sample: 128 companies, that have foreign employees and have indicated the intention toreplace some or all. Multiple options allowed per contributor.
The most cited reason for replacing foreign employees with
local hires is the difference in compensation levels (78.1
percent). As cost savings are now a top priority for companies
due to COVID-19, replacements with local hires due to
differences in compensation levels could be partly related to
the pandemic. 25.8 percent report directly COVID-19 as a
reason to replace foreign employees (Figure 3.42).
The most common form of labor relationship with a foreign
national is by a local labor contract, used by 72.6 percent of
participants (Figure 3.43). Project-based and expat contracts
are used by 42.1 percent and 6.1 percent of contributors
respectively on a very common or common basis.
When it comes to evaluating the visa process, 28.4 percent
of companies believe the process has improved - a decrease
of 7.2 p.p. from 2019. While the rate of contributors claiming
the visa process has worsened resembles that of last year,
the percentage of respondents for which it has significantly
worsened has gone up to 8.0 percent, a 4.1 p.p. increase
over 2019 (Figure 3.44).
Figure 3.44: Evaluation of Visa Process
In %
4.1
35.640.1
16.3
3.93.8
28.4
44.4
15.4
8.0
SignificantlyImproved
Improved Unchanged Worsened SignificantlyWorsened
2019 2020
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40.6
5.68.7 9.5 9.9
4.98.2
4.2 3.05.6
64.422.9
12.7
East
North
South & Southwest
11. About the Survey
The current report was made possible thanks to the
contribution of 576 member companies of the German
Chamber of Commerce in China to the annual labor market
and salary online survey. The number of participants - the
highest ever recorded for this survey - represents about 25
percent of the Chamber’s membership base. Results are
statistically representative with a 3.5 percent margin of error
for a confidence level of 95 percent.
Data was collected via an online questionnaire between 6
June 2020 and 17 July 2020.
12. Profile of Contributors
The majority of the contributions originate from companies
operating in the Yangtze River Delta area (64.4 percent) and
Northern China (22.9 percent). South and Southwest China
make up for the remaining 12.7 percent (Figure 3.45).
Tier-1 cities represent nearly 58.0 percent of all contributions
(Figure 3.46). This high percentage is mostly due to
contributions coming from Shanghai, which account for 40.6
percent of all participants (Figure 3.45).
Companies from the Machinery and Industrial equipment are
the industries with the highest participation rate (32.5
percent), followed by the Automotive industry (17.7 percent)
(Figure 3.47).
In this edition, small size companies make up for 41.5 percent
of all the contributions (4.2 p.p. above last year). Mid-sized
companies account for 32.9 percent (1.2 p.p. below last
year), and large companies amount to 25.6 percent of
participants (3.0 p.p. below 2019) (Figure 3.48).
Participating companies’ main business functions in China are
sales and marketing (59.2 percent); production (57.8
percent); and services (47.2 percent) (Figure 3.49).
HR managers (28.5 percent) and general managers (27.0
percent) are the two most common roles from the
representatives of the companies participating in the survey.
HR specialists / supervisors (14.2 percent) and C&B
specialists / supervisors (10.4 percent) follow (Figure 3.50).
Most of the contributors are Chinese nationals (78.0
percent); 17.2 percent are German nationals (Figure 3.51).
Figure 3.46: Distribution of Contributors by City Tier
In %
32.5
17.7
7.3
5.6
4.9
4.3
3.3
2.6
2.4
1.9
1.7
1.2
1.2
1.2
0.9
0.7
0.3
0.2
0.2
0.2
0.2
9.5
Sample: 576 companies. TAI / KUN: Taicang and Kunshan; Other YRD: Other YangtzeRiver Delta areas; Other PRD: Other Pearl River Delta areas.
Shanghai TAI/KUN Beijing Other North Guangzhou
Suzhou Other YRD Tianjin Shenzhen Other PRD
Figure 3.45: Regional Distribution of Survey Participants
In %
57.8
33.5
8.7
Tier 1
Tier 2
Tier 3
Sample: 576 companies.
Figure 3.47: Distribution of Contributors by Industry
In %
Sample: 576 companies.
Machinery / Industrial Equipment
Automotive
Electronics
Consulting / Legal Services
Plastic / Metal Products
Chemicals
IT / Telecommunications
Logistics
Consumer Goods
Medical Supplies
Construction
Environmental Products & Services
Finance
Tourism & Hospitality
Education
Pharma
Aerospace
Other Industries
Mining
Textiles
Industrial Automation
Food Production
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Figure 3.48: Distribution of Contributors by Company
Size
Company Size by Number of Employees, in %
41.5
32.9
25.6Less 50
50-250
More 250
Sample: 576 companies.
59.2
57.8
47.2
28.6
27.6
22.7
16.3
3.8
Production
Sales & Marketing
Services
Trading
Sourcing/ Procurement
Production-related Engineering
R&D
Others
Figure 3.49: Main Focus of Contributor’s Activity
In %
Sample: 576 companies. Multiple activities allowed per contributor.
78.0
17.2
4.8
28.5
27.0
14.2
10.4
5.3
4.74.6
5.3
Figure 3.50: Profile of Contributors by Role
Position of the Company Representatives Participating in
the Survey, in %
General Manager
HR Manager
Other
Figure 3.51: Profile of Contributors by Nationality
Nationality of the Company Representatives, in %
Chinese
German
Other Nationality
HR Specialist / Supervisor
C&B Specialist / Supervisor
HR Director
Finance Director / Manager
C&B Manager
Sample: 576 companies & 636 contributors. An organization’s survey might have beencontributed for more than one individual.
Sample: 576 companies & 636 contributors. An organization’s survey can be contributedfor more than one individual.
48
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Specific position or level ofseniority for professionals withinthe specific Functional Area.
FUNCTIONAL AREA
Specific Position
Total Cost per Employee
Median values. Monthly in RMB based on a 12-month yearperiod, tax included. Includes gross base salary plus variable costssuch as: mandatory social security & housing fund by theemployer, meal & transportation allowances, company car,subsidies studies to employees, overtime, supplementary medicalinsurance, annual medical check-up, life & accident insurance,critical illness allowances, supplementary pension plan,supplementary housing fund, annual variable bonus / salesincentives, other bonuses (skill, retention, management).
Unless otherwise indicated, only results with a minimum of 10individual observations are presented. Cells with value n.a. (notavailable) indicate that the total number of responses collecteddid not meet the minimum quantity.
Expected Wage Increase in 2021
Average expected wage increase for 2021.Collected in the survey as the expected TotalCost per Employee change from 2020 to 2021(in percent).
Production, Administration, Sales,Purchasing, Finance, HR, QualityControl, Engineering / R&D,Logistics, Consultant / ProjectManagement, Senior Management,Specialists.
CHINA
Total Cost per Employee (TCE) in 2020(RMB/month) is obtained from thesurvey. The TCE in 2021 is obtained as aresult of applying the Expected WageIncrease in 2021 to the 2020 TCE. TheExpected Wage Increase in 2021 isobtained from the survey.
Segmentation Variable
Results are segmented by Region, CityTier, Industry, and Company Size.Survey results are shown for eachcategory of the respectivesegmentation variable when samplesize is sufficient.
IV. COMPENSATION DATA
1. Introduction
In the compensation tables following this section, we will
present specific compensation details both for China and
segmented levels for 39 particular positions covered in the
survey.
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2. Wages and Wage Increases
1) Total Company Cost per Employee. Definition
The gross base salary, including the mandatory social security
and housing fund contributions by the employer plus any
other extra benefits the employer is providing: supplementary
health insurance, life insurance, variable bonuses, sales
incentives, overtime, children allowances, meal and
transportation allowances, supplementary housing funds, skill
allowances, retention bonuses, etc. Monthly in RMB based
on a 40-hour working week and a 12-month year period.
Gross base salary in the survey is defined as basic monthly
salary in RMB (taxes included) based on a 40-hour working
week and a 12-month year period. The gross base salary is
the base for the calculations of the individual income tax. It is
clearly stated in the labor contract. If yearly one-off
payments (i.e. a 13th month or a 14th month) are included in
the contract, they are also part of the base salary.
2) Forecast Salary Change from 2020 to 2021
Salary increase in percentage of Total Company Cost per
Employee. Includes merit increase and market adjustments.
3. Segmentation Variables
The results are segmented by:
Region: Shanghai, Other East, Beijing, Other North, Shenzhen
/ Guangzhou (SZ / GZ), Other South. Other East locations
include cities such as Taicang, Suzhou, Kunshan, Changzhou,
Changshu, Wuxi, Hangzhou, Ningbo, and more. Other North
locations include Tianjin, Shenyang, Qingdao, Dalian,
Changchun, Langfang and more. Other South locations
include Jiangmen, Huizhou, Chongqing, Foshan, Zhuhai,
Dongguan, Kunming, and more.
East China: Shanghai, Suzhou, Taicang / Kunshan (TAI /
KUN), Other Yangtze River Delta areas (Other YRD).
North China: Beijing, Tianjin, Other North.
South and Southwest China: Shenzhen, Guangzhou, Other
Pearl River Delta areas (Other PRD).
City Tier: Tier 1, Tier 2 and Tier 3 cities. First tier cities are
Shanghai, Beijing, Guangzhou, and Shenzhen. Second tier
cities are provincial capitals and cities in the vicinity of first
tier ones, such as Suzhou, Wuxi, Taicang, Hefei, Nanjing,
Dalian, Qingdao, Chongqing and others. Third tier cities are
smaller cities, mainly in the Yangtze and Pearl River Delta.
Industry: Machinery, Automotive, Plastic / Metal Products,
Electronics, Chemicals and Others – the latter combines all
industries for which we did not have enough observations
(minimum 10) at the position specific level.
Company Size: (by number of employees): less than 50,
between 50 and 250, and more than 250.
To facilitate comparisons, the overall value for China is
provided along the categories of each segmentation variable.
China: Median and Percentiles: Median, Percentile 25,
Percentile 50 and Percentile 75 of Total Cost per Employee
values for each position in overall China.
50
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PRODUCTION Shanghai Other East Beijing Other North SZ / GZ Other South
Blue Collar
2020 6,297 7,000 6,300 6,326 6,500 5,925 5,000
2021 6,547 7,265 6,545 6,568 6,773 6,158 5,229
Increase % 3.98 3.79 3.88 3.82 4.21 3.93 4.58
Operator
2020 7,500 8,500 7,000 8,250 7,000 7,256 6,000
2021 7,795 8,856 7,256 8,547 7,287 7,563 6,261
Increase % 3.94 4.19 3.65 3.60 4.10 4.24 4.34
Shift Leader
2020 9,753 10,500 9,500 10,899 9,860 9,875 7,300
2021 10,133 10,918 9,854 11,315 10,258 10,276 7,607
Increase % 3.90 3.98 3.72 3.82 4.03 4.06 4.21
Production Supervisor
2020 15,400 16,800 15,650 15,950* 15,200 13,374 12,010
2021 15,991 17,435 16,201 16,748 15,804 13,985 12,514
Increase % 3.84 3.78 3.52 5.00 3.98 4.57 4.19
Production / Plant Manager
2020 34,836 39,240 32,000 34,648 39,803 31,960 28,712
2021 36,106 40,576 33,104 36,121 41,370 33,019 29,981
Increase % 3.65 3.40 3.45 4.25 3.94 3.31 4.42
` CHINA EAST NORTH SOUTH
ADMINISTRATION Shanghai Other East Beijing Other North SZ / GZ Other South
Junior
2020 8,298 10,000 6,740 9,000 7,441 7,960 6,078
2021 8,623 10,402 6,980 9,383 7,773 8,214 6,329
Increase % 3.92 4.02 3.57 4.25 4.46 3.19 4.13
Mid-Level
2020 12,000 15,500 9,200 14,325 9,500 12,000 8,000
2021 12,468 16,141 9,540 14,882 9,868 12,420 8,307
Increase % 3.90 4.13 3.70 3.89 3.87 3.50 3.83
Senior
2020 21,084 24,911 18,000 24,000 21,600 21,975 15,558
2021 21,839 25,855 18,591 24,744 22,524 22,662 16,132
Increase % 3.58 3.79 3.28 3.10 4.28 3.13 3.69
` CHINA EAST NORTH SOUTH
Total Cost per Employee in RMB/month (Median values)
4. Region
*Median from 8 observations.
This is for reference only. The full version is member-exclusive
51
Labor Market
2020 | 2021& Salary Report
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