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In recent decades, China became the “factory of the world” thanks to the large-scale supply of industrial production worldwide, supported by the cheap labor. But the economy is growing and wages are now approaching the levels in Europe. The payment in Chinese factories increased to 3.60 USD per hour last year. This may not seem so much compared with the US where pay is about 26 USD per hour, but is an impressive illustration of how Chinese economic growth affects ordinary citizens, improving the quality of life of large groups of people. At the same time it should be stressing the question of how it will be maintained a breakneck growth.

The wages at manufacturing sector in China are now higher than those in Brazil, Argentina and Mexico. The average salary in China is five times higher compared to India, higher or equal to some salaries in countries such as Portugal or South Africa.

Given the threats by the US president Donald Trump for punitive duties on Chinese goods, the analyst believes that jobs could simply be moved from China to other countries with an abundance of cheap labor, rather than return to the United States.

That’s what happened when former President Barack Obama had in 2009 high tariffs on products manufactured in China tires. The deliveries from South Korea, Thailand and Indonesia are doubled at the expense of Chinese production.

The rising wages are good news for active population of China, which will have more opportunities for consumption and recreation. But at the same time it is a serious challenge to China’s economy, because in wage growth opportunities for attracting investors reduced. Countries such as Cambodia and Myanmar are about to displace China as a destination for cheap production.

The Chinese labor market is increasingly vulnerable. The situation there can repeat what happened in the US manufacturing sector, which have seen a marked rise in unemployment after the migration of jobs to China.

Chinese jobs could be reduced at the expense of those in Sri Lanka, where hourly wages in manufacturing is only 50 cents.

The Communist Party is concerned that if the continuous growth of quality of life stop for large groups, this will dramatically increase the risk of social unrest.