December 3, 2007 (LPAC)--"China's economy cannot continue to grow in the unbalanced condition," in which already-low workers' wages rise more slowly than the overall economy, states a signed commentary just published in the Beijing News, the China Securities Journal reported today. The article appears as the Chinese government launches its most important annual economic policy meeting, the Central Economic Work Conference, in Beijing today. 

The Beijing News article says that China is going to enter an era of "wage increase and tax reduction." This year, "government taxes and enterprise profits both grew faster than the growth rate of GDP, while the growth rate of workers' wages is lower than that of GDP. We can probably say that the large growth of enterprise profits and financial revenues is happening at the expense of workers' low wages." The governments of both Shanghai, China's largest industrial city, and Guangdong Province have recently announced that they will directly take on the problem of low wages. In Guangdong, which had been the center of China's low-cost exports to the rest of the world, the government will initiate wage laws next year, to force enterprises to increase wages. Policies initiated in Guangdong and Shanghai have "exemplary meaning" for the rest of China, the Beijing News states. "What Guangdong and Shanghai did is just to answer the call of ... President Hu Jintao" at the recent Communist Party National Congress, when Hu said that the government had to ensure rising wages for the workforce.

"The building of a long-term system to raise wages should be deemed as a crucial reform to effectively stimulate domestic needs, remedy the imbalance of China's economic development and the national income distribution, and boost the sustainable development of the national economy," the Beijing News wrote.