Back to Cheap Labour? Increasing Employment and Wage Disparities in Contemporary China

Abstract After nearly two decades of rising wages for those in the unskilled sectors of China's economy, in the mid-2010s employment and wages in China began to experience new polarizing trends. Using data from the National Bureau of Statistics of China, this paper examines trends in multiple sectors and subeconomies of China, revealing the substantial rise of employment in informal, low-skilled services as well as the steady decline of wage growth in the informal subeconomy. At the same time, we find that although employment growth in the formal subeconomy is relatively moderate, wage growth in high-skilled services is steadily rising. These two trends pose a challenge for China, presenting a new and uncertain period of economic change.