Chinese wages now have grown higher than in Argentina, Brazil and Mexico and also beaten about 70 percent of the weak Eurozone. It has shown that the improvement in Chinese productivity has contributed the improvement of the Chinese living; however, it also has shown that the economies in Latin America have fallen. The Chinese wages in manufacturing have increased by 200% in the last decade. With the incomes increase, the Chinese consumption power has increased significantly over the last few years that the Chinese tourists have been welcome and believed to have great impacts on the other countries' exports.
Not only the Chinese tourists' consumption help other countries, the increase in Chinese incomes will accelerate the Chinese domestic consumption as well. Some experts argue that the Chinese economy has been too dependent on the investment driven by the expansionary government expenditure; once the Chinese average income level increases, the consumption will increase as well. In the developed world, the high-income level is the most important factor that drives the domestic consumption. In some areas of China, the average incomes have been higher than some developed countries' average income levels.
The increase in the average incomes could lower some advantages of cheap labour costs; however, the improvement in productivity counters the effect from increasing labour costs. In addition, the scale of the Chinese market gives incentives to some companies to locate their factories and offices in China in order to get faster access to the Chinese market.
Overall, the increase in the Chinese average income level and productivity should make people more confident about the future Chinese economy.
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