BEIJING – China’s manufacturing job growth accelerated to the fastest pace in at least five years over the past three months, signaling more employers may be forced to follow Honda in offering higher wages.

The Federation of Logistics and Purchasing said Monday in Beijing that its average factory employment index for the past three months reached 52.7 even as its measure for manufacturing growth slid.

The release came a day after Honda offered a 24 percent pay increase to workers at a factory in the aftermath of a strike that shut down its Chinese production. Hon Hai Group, the assembler of Apple’s iPhones, said last week it may raise wages in China by 20 percent.

Faster job growth and higher wages will help Premier Wen Jiabao’s government rebalance the world’s third-largest economy away from export dependence. The shift may also stoke inflation, making it more important that officials contain prices in part by ending China’s currency peg to the dollar, said Peng Wensheng, head of China research at Barclays Capital.

“Honda’s just the tip of the iceberg, and it reflects the urgency of adjusting China’s growth model,” said Huang Yiping, an economics professor at Peking University. “After three decades of rapid growth partly driven by cheap labor, China must adjust” to higher wages, he said.

 

Copy the Story Link

Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.