Wages offered to Chinese workers in major cities declined by the most on record, underscoring persisting deflationary pressures and sluggish consumer confidence in the world’s second-largest economy.
Average salaries offered by companies to new hires in 38 key Chinese cities fell 1.3 per cent to 10,420 yuan (US$1,458) in the fourth quarter of 2023 from a year ago. That was the worst drop since at least 2016, according to data from online recruitment platform Zhaopin compiled by Bloomberg.
It was also the third straight quarter of decline, the longest run since data on yearly changes were first available in 2016.
In Beijing, the wages decreased 2.7 per cent from a year ago in the fourth consecutive quarter of contraction. Salaries in the southern metropolis of Guangzhou fell 4.5 per cent.
The data highlights the mounting deflation risks faced by China going into 2024, which weigh on its growth outlook. A gloomy job market means residents could pare back their spending, adding to downwards pressure on consumer prices that are already falling at the steepest pace in three years.
It also bodes ill for the property market, which is extending its worst slump in history. With an uncertain income outlook, households could continue to delay their home purchases and avoid taking out mortgages.
China saw widespread salary cuts in various sectors last year including technology, finance and among local government workers, a result of regulatory crackdowns and strained public finances. Beyond that, companies are also under pressure from weak domestic and overseas demand for their products.
Entry-level salaries have been falling in the so-called new-economy sectors, including electric vehicles, batteries, and solar and wind power. The average salary fell 2.3 per cent to 13,758 yuan in December from a year earlier, according to data from a private survey by Caixin Insight Group and Business Big Data Co.
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‘Let it rot’: surviving China’s high unemployment and cost of living
‘Let it rot’: surviving China’s high unemployment and cost of living
A breakdown of the official jobless rate showed more than one in five young people could not find a job as of June, before the statistics authorities stopped publishing the numbers. That was in part due to companies’ increasing preference for experienced workers, who appear to have accepted lower wages and longer working hours due to concern over their job prospects.
The government says it is ironing out complexities in the jobless data.
A consumer confidence index compiled by the National Bureau of Statistics shows sentiment hovered around a historical low as of November, the most recent month for which data is available.
The index takes into account peoples’ assessment of their income, employment and willingness to spend. It shows confidence is yet to improve from the levels seen in 2022, when lockdowns due to Covid-19 were still in place.