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Wen says Japanese companies' wages too low in China

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Because only a small part of the population participates, the scale of the pension system in China is small. Putting money aside for a pension is a new phenomenon for much of the population.

Seems you answered your own question.... Good thing about that is, if the Chinese Premier decided to be aggressive on Chinese pension plan, you can give yourself a pat in the back =/

I'm happy to leave it at that...

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jruaustralia at 02:29 PM JST - 31st August. Let me say, if I run China I'll definitely do this....(ref: retirement pension).

Why? Do you have any opinion rather than a one line sentence? Problem is that if you change jobs in China, you usually lose your pension as a result of poor administrative implementation. This means that many people do not see any point in contributing. Because only a small part of the population participates, the scale of the pension system in China is small. Putting money aside for a pension is a new phenomenon for much of the population. In addition, China has a strong, centuries-old, family-oriented social model, in which grown-up children care for their parents. The result is that Chinese employees would rather have an increase in net wages than save for a pension. And if you run company, you still want to implement retirement package? Why don't you elaborate what you mean and what is the advantage of the company?

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Japan has currently over 1400 main companies there and will increase substantially in the near future. The Japanese will be building a bullet train soon and they recently bid for building a nuclear power plant. There are many large projects that are currently being discussed and negotiated with the Vietnamese Govenment.

Trolling and lobbying at the same time.... I like that ./cough

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Retirement packages? Why should any foreign companies get into long term liablity when you have many millions of Chinese that are out of work? Why should the company spend when you don't need it?..... If you ran a company in China, would you want to do this? This is stupid.

Let me say, if I run China I'll definitely do this....

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"Like I said before, Vietnam will be a main focus. Japan has currently over 1400 main companies there and will increase substantially in the near future. The Japanese will be building a bullet train soon and they recently bid for building a nuclear power plant. There are many large projects that are currently being discussed and negotiated with the Vietnamese Govenment. There is an accelation of exploration studies for Vietnam by many Japanese companies"

Can you say "colonization" ?

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presto345 at 10:00 PM JST - 30th Augus. I predict that a number of Japanese companies will pack up in the coming 5 years or so and return to the home country where they have control over R&D, manufacturing and marketing with a dedicated work force and without the threat of their technology being stolen, copied or surrendered in return for empty promises.

Well, I doubt it. how many people work in R&D? Very few and this will still take place like Silicon Valley in the U.S. However, for Japan, most of the manufacturing will remain overseas to reduce cost. Like I said before, Vietnam will be a main focus. Japan has currently over 1400 main companies there and will increase substantially in the near future. The Japanese will be building a bullet train soon and they recently bid for building a nuclear power plant. There are many large projects that are currently being discussed and negotiated with the Vietnamese Govenment. There is an accelation of exploration studies for Vietnam by many Japanese companies that feel that within 10 to 15 years, China will no longer be a attractive option and they might have to relocate.

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jruaustralia at 10:25 AM JST - 30th August. Naw-- preferably Japanese companies should introduce better retirement packages (such as superannuation) for Chinese laborers.... I would have espoused that instead of wage hikes...

Retirement packages? Why should any foreign companies get into long term liablity when you have many millions of Chinese that are out of work? Why should the company spend when you don't need it? You can get any workers to fill the position and just about everybody is replaceable. If you didn't know, most of the job is in manufacturing and only few are in super hi-tech that require specialized qualifications. If you ran a company in China, would you want to do this? This is stupid.

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I'm sure they are, maybe Japanese companies should think about bringing some production back home since they are facing rising wages in China anyway.

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Labor unrest in China is a real threat to its stability. Wen should know that as soon as Japanese companies start raising wages, counterparts in the China sweat shops will rise to the occasion and demand more too. Imagine the scenario when the millions and millions in the hinterlands begin to realize what's going on and that they are being left out. I predict that a number of Japanese companies will pack up in the coming 5 years or so and return to the home country where they have control over R&D, manufacturing and marketing with a dedicated work force and without the threat of their technology being stolen, copied or surrendered in return for empty promises.

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China is compensating workers at bare minimum levels: just enough to keep labor unrest low but not enough to build a strong middle class or internally driven mass consumer economy. It keeps the companies and the upper classes happy, but obviously the upwardly mobile and less fortunate aren't content.

Its fair to say that China's ambition hasn't abated yet... and whilst I somewhat agree with your position that all these talks (from an outsider's view) sounded superficial.... it'll be an inspired choice for the Chinese to now mull a sound superannuation scheme for its vast workers...

I for one don't think hiking wages for the Chinese, right now, is sensible, and that doing so might further fuel the nation's inflation-- it being contagious would have been devastating not only for the Chinese but also for Asian countries like Indonesia, the Philippines... and even Australia and New Zealand :(

For the Chinese to strategically implement a superannuation scheme, however, would have been more sound. Whether with the aid of foreign companies or on its own is for them to decide.... And not only would it be more sensible for them to now grasp that their 'cheap natural resources' (your words) will soon enough retire, the Chinese could eventually rival the largest of US pension funds...

Wen's comments are probably politically motivated, the first in a series of orchestrated signals on the world stage leading to something planned on the Chinese agenda.

Well... we better watch out then, huh!?

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Everybody's got their own take on China, but I think gaijinfo said it best. China doesn't give a damn about workers' rights and that, coupled with stable and developed infrastructure, is exactly why so many companies have been rushing to exploit this cheap labor "natural resource".

China is compensating workers at bare minimum levels: just enough to keep labor unrest low but not enough to build a strong middle class or internally driven mass consumer economy. It keeps the companies and the upper classes happy, but obviously the upwardly mobile and less fortunate aren't content. China's "three treasures" a la Japan hasn't happened yet and they've a long way to go.

Wen's comments are probably politically motivated, the first in a series of orchestrated signals on the world stage leading to something planned on the Chinese agenda. Everybody has been briefed and will understand the statement, otherwise the hypocrisy might make some laugh out loud. They expect the rest of the world to pick up the monetary slack with the workers while the government coddles its own industries and companies.

Conversely, could the problem with India (from a cold-blooded capitalist-pig point of view) be that it cares too much about its workers? Trying to leap-frog over manufacturing into the services industry without paying its dues in their workforce's sweat and blood?

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Word on the street is China only allowed the strikes at foreign owned company. Message to the world: Chinese ain't your sweatshop workers any more.

Yes, seems like it...

Hey pay them more money, the more Chinese goods cost the more jobs will be saved in America and Japan. Also the more they can buy.

Naw-- preferably Japanese companies should introduce better retirement packages (such as superannuation) for Chinese laborers....

I would have espoused that instead of wage hikes...

So they're trying to boost up consumer purchasing power to build up a good internal economy made to address the needs of their own citizens. The present crisis is just pushing them to move in that direction a bit faster, as the safety of exporting goods to America is starting to erode, as doubts spread about the future ability of American consumers to buy more and more goods since most of their spending of the last 10 years has been fueled by debt.

Good observation-- but again, a better retirement packages for Chinese laborers are much preferable imo =/

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The Chinese aren't idiots. They know an export-only economy is a very bad idea because you come to depend too much on the countries that import your goods. They see what happens to African and Asian countries that try to go that way, and how they never escape utter poverty.

So they're trying to boost up consumer purchasing power to build up a good internal economy made to address the needs of their own citizens. The present crisis is just pushing them to move in that direction a bit faster, as the safety of exporting goods to America is starting to erode, as doubts spread about the future ability of American consumers to buy more and more goods since most of their spending of the last 10 years has been fueled by debt.

In a way, I can't but admire the cunning of present Chinese leaders on economic issues. While the western leaders have fallen into the trap of dogmatic economic thinking (neoliberalism), the Chinese have instead adopted more pragmatic policies. This is a reversal of the Cold War, where it was the Soviet and Chinese leaders that were dogmatic and the western leaders who were ready to adopt pragmatic policies from either capitalism or socialism to get the best results.

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Hahahahaha!

um, Mr. Wen, make the wage increase across the board (i.e., Minimum wage laws that cover both foreign and domestic companies) and let's see if that addresses the problem...

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"Hey pay them more money, the more Chinese goods cost the more jobs will be saved in America..."

Actually, the hope is that the more money chinese consumers have in their control will be spent "buying" more imported goods from countries like the USA. Driving up costs of chinese goods is a pipe dream- there are simply too many chinese workers who will do the job for lower wages- much like the situation in the US with Mexican migrants.

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Hey pay them more money, the more Chinese goods cost the more jobs will be saved in America and Japan. Also the more they can buy.

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American companies don't trust China with R&D work. It's an invitation to have your product stolen. Things like hard drives are assembled in China, but the super complex and precise drive head is made in the USA. They'll help china work on advanced manufacturing technology that drive quality and output, but you'd have to be pretty dumb to just hand everything over to the Chinese. I know people that have send production over to Chinese factories only to find knock-offs on ebay a month later. You can't trust the factory owners and there isn't the legal infrastructure in China to go after people who steal intellectual property. If anything China should be kicked out of the WTO for not implementing the IP controls.

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"I think it is unfair to bash only Japan over this."

Nonsense ! The countries you mentioned don't have the clout over Japan that the Chinese do- if they want to demand better treatment from the Japanese then that is surely their right. And coming on the heels of Japan's insistance that Chinese create more transparancy within its labor organizations is simply "tit for tat" politics... Japan once again finding themselves overplaying their hand ! Get used to it people, I sense a repeat of how Japan acted towards the US in the 80's- only to find themselves biting the hand that fed them ! Amazing that they haven't learned their lesson.

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Umm... I do not think it is just Japanese companies. I mean, Western companies are going to India, Vietnam, China, etc... because of cheap labor, right? I think it is unfair to bash only Japan over this.

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"actually, american companies and european ones won't give chinese workers higher wages ."

And where does it say such in this article ???

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actually, american companies and european ones won't give chinese workers higher wages .

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"Cripes, if the Chinese feel their pay at Japanese companies is too low, they can quit and work for Chinese companies, no?"

No ! Japanese companies were brought in with the understanding they would help "drive" the economy through superiour tech, better R and D, advanced factories, and higher wages ! If they cannot live up to their negotiated agreements with the chinese then they should pack their bags and return to Japan. This obvious scenerio of J companies trying to take advantage of cheap chinese labor for the sake of Japan Inc. went out the door when Japan's bubble burst in 1990. It's been a slow climb to respectability ever since- and now Wen is calling Japan to the carpet for their outdated mind set. Japan best show some respect here... they are no longer the master on this here plantation !

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Cripes, if the Chinese feel their pay at Japanese companies is too low, they can quit and work for Chinese companies, no?

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Hmmm, China gets a taste of being American for a short stint and now they want it all. Tough, try working the way you use before everything went so rosey if you can't handle today's pay and standards. I'm sure they are far better than the crap hole that was China before the rise before the fall.

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I tought that low wages was the main selling point that the chinese government used for attract foreigner companies.

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In Japan, too.

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Then why doesn't the politburo stop bitching and introduce minimum wage legislation?

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Yeh, I wish he showed the same concern for the workers in his own state factories and in various Chinese sweat shops. Nope. Won't happen but it is EASY to do with Japanese factories. In fact, it is almost patriotic to exploit the Japanese a bit more. If I was listening to this, I would agree if he raised the wages overall in the entire industry. That would put a quick end to this discussion. Though, I do agree, that the Chinese workers are worked to death, and I do hope that they strike and strike and strike so that these malicious corporations learn a little bit of humanity.

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Word on the street is China only allowed the strikes at foreign owned company. Message to the world: Chinese ain't your sweatshop workers any more.

They prefer to keep their resources to themselves, with China's dismal human rights record, sweatshop workers in China are a natural resource, only to be exploited by the Chinese.

Which, from a cold hearted business standpoint, makes perfect sense.

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Sounds like simple-minded Wen san is making a simple-minded comment now that China is getting to be in the driver's seat, literally.

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Its time to shift production to Vietnam like the Europeans do.

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Now that Chinese are getting a better life style and freedoms, they want more money. Japanese companies that can expect near slave labor hourly wages time is at an end. Continue paying the Japanese peanuts but the rest of the world is moving on. As for the comments above, Salaries have gone down in the last 10 years not up. It is the Japanese way. (they live in their own world)

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This ties in well with yesterday's article about 60% of Japanese businesses having to send their manufacturing overseas, specifically to China. I guess they'll be looking for another country now.

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thats the whole point isnt it - cheaper production costs than japan - its called capitalism....

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@escape artist I moved back to japan a few months and took a job in a factory while i sort out a teaching job.The average japanese person i work with work their ass off for next to nothing and then have to pay over the top prices in day to day living. For Wen to complain about japanese companies is a bit rich..chinese record growth and new found wealth over the past few years has led a lot of exploited workers in china to strike for a better share of the riches generated.Id imagine most companies in china whether homegrown or foreign owned have up to now a rich supply of cheap migratory labour to tap into. The ruling communist party will obviously have more problems in the future as chinas middle class grows and consumerism and capitalist ideas expand.Labour groups are only now realising how much power they can have.

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For many, wages are too low in Japan too. Haven't had a raise myself in over 10 years now, and am continually expected to work for free (by always expecting professional work at lower-than-fair prices) and take pay cuts as well. Low wages in China by Japanese firms just sounds like part of Japanese companies' export package, except possibly that people in China are louder about getting taken advantage of than people in Japan are.

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