One of the leaders in The Economist this week focused on the changes in the Chinese labour market. The average monthly wage is still about 5% of the average monthly wage in the US – approx $197. But shortages of labour especially in the export focused areas, a new labour law, and the forces of supply and demand has pushed up the wages.

This extra income to Chinese workers will hopefully increase spending in the economy – A 20% rise in Chinese consumption might well lead to an extra $25 billion of American exports. That could create over 200,000 American jobs. The article suggests that this extra spending will return the world economy to full employment which I consider very optimistic. Click here for the full article from The Economist.