Like Japan in the 1980s, China Poses Big Economic Challenge
: Key statistics: "China has 10 times the population of Japan, with more unemployed adults in rural areas than the entire American work force. Raising the wages of so many people to the levels found in industrial nations will take a long time.
Through the 1970's and 80's, Japanese wages rose 70 percent faster than American wages, according to data from the International Labor Organization. That, together with rapid appreciation in the value of the yen, helped push up Japanese factory wages from one-third of American levels to rough parity.
Chinese wages, though, were no more than 4 percent of American and Japanese wages in 2002, the most recent year available. While official Chinese statistics show that wages doubled from 1996 to 2002, some factory owners say pay has been flat — or even declined slightly — in recent years, as rural migrants continue to pour into the cities.
In the meantime, China's productivity gap is being closed by a rapid investment in infrastructure, as China puts a third of the world's steel production and half its cement into extending modern roads, power grids and telecommunications links across the country." 11:35:04 PM