Until recently in China labour was so cheap that lots of labour was the answer.
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"Younger workers are definitely more aware of their rights and more demanding, " said Geoff Crothall, a China Labour Bulletin spokesman.
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If wages continued to rise at this pace, it would mark a hairpin turn in China's labour market.
The ageing of China's labour force matters, because older workers are less willing to move to the coastal factories that depend on migrant labour.
This would be the first such exercise at a large company in China, where labour unions have traditionally been controlled by management and local government.
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Since then it is largely because China's unit labour costs have grown much faster than America's.
For several years now there has been a rising shortage of labour in China.
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But by far the greatest worry is China's tightening labour market.
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There are no official statistics on China's unit labour costs.
There will be an aggressive narrowing of the competitive advantage China now wields in labour costs, the report predicts, as wages for Chinese factory workers rise by between 15pc and 20pc a year.
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China still has perhaps 200m underemployed rural workers who could move to factories over the next two decades, so wages for low-skilled workers are rising more slowly than productivity, reducing China's unit labour costs.
When production jobs moved en masse to China and other cheap labour destinations, rich-world governments did not worry unduly because they thought that their workers could glide painlessly from manufacturing jobs to service jobs.
"The market for relatively unskilled labour in China has been tightening, and now there is even more incentive for companies to relax their standards, so they try and fill up their work spaces, " he said.
However, wages are held back by a large pool of surplus labour, and China's partially convertible currency is pegged to the dollar.
"There are relatively big inflationary pressures this year, mainly because there are pressures on China's land, labour, agricultural products and services, " he said.
If productivity, the efficiency of the use of labour, in China was the same as it was in the US then Chinese wages would be the same as they are in the US. Running it backwards, we can look at wages in China.
As one factory boss said to me last month, wages for factory workers in China are now five times higher than in Vietnam, so he's moved all his labour-intensive work out of China.
Now China is making inroads into such labour-intensive sectors as textiles, shoes and toys, too.
We came back because we can make this product here for about a tenth of the labour we use in China.
Like other manufacturers in China, Hon Hai faces rising labour costs, though it is better placed than most. (Mr Yang reckons that labour accounts for only 4.5% of the cost of goods sold.) A move up the value chain may help.
But calculating that would require timely estimates of unit labour costs for all of China's trading partners.
Add in higher domestic food and energy prices and surging labour costs, and the China price may soon be a good deal higher.
Employers in China's coastal factories have suffered labour shortages and strikes.
Called Made in America, Again, it focused on China and concluded that by 2015 it will be just as cheap for companies to produce goods with a high labour content in the US as it is in China.
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China is already pushing down the prices of labour-intensive manufactured goods, thereby boosting the real incomes of consumers in developed countries.
In January, China imposed one of the most far-reaching labour laws in the world.
China is no longer just a source of cheap labour, says Ms Xu.
But there is also a longer-term explanation, based on the weakened power of labour after the entry of countries like China into the global employment market.
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Foxconn, the contract manufacturer whose biggest customer is Apple, is preparing genuinely representative labour union elections in its factories in China for the first time, a powerful sign of the changes in the workshop of the world demanded by an increasingly restive workforce.
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