Foreign Companies In China Pay System Change And Its Impacts

Since the reform and open policy of China, the massive foreigncapitals and enterprise are entered to china. There has been enormousbut regardless changing in Chinese economic history in the marketpattern. At the same time, the foreign enterprise are also developedfollowing rapidly development of Chinese economy. What are they relyon, and how are they expand their business in just 20 years? It isimportant attribute without doubt that using the inexpensive laborforce of Chinese market to their development.Because the wages of foreign companies are obviously higher thanthe Chinese companies, it becomes one kind of pursuit and yearning forthe Chinese people to enter the foreign company. Therefore foreigncapitals and enterprise can rapidly employ a large quantities ofChinese people who has excellent ability. But along with the endlessenhancement of the economical level, in the long term point of view, aproblem has discovered to the Chinese employees of the foreigncompanies. Up to the recent years, the wages of Chinese state-ownedenterprise and government department are also highly rising ,moreover the social securities of Chinese employees and many otherenvironment over the Chinese employees are better than the past. Onthe other sides, the development of the privately operated enterprisecause employees' work enthusiasm and rising their wage. Because ofthese, these years wage disparity between the state-owned enterprise,the government enterprise, the privately operated enterprise, andforeign enterprise is reduced. This incur losses of labor cost to theforeign enterprise that has superiority about benefits of the laborcost for the past long term. If the foreign enterprise maintain theirtalented Chinese human resource, their cost benefits to the wages aredecreased, therefore their advantage of competitions are alsodecreased.This article contain the recent typical wage system of American,German, and Japanese enterprise in China, and derives the changes andenhancement of Chinese wage system comparing with the wage system offoreign enterprise. Since the reform and open policy of China, thisarticle analyze the change tendency of Chinese wages, compare with theaverage wages between China and foreign countries, laborproductivities between China and foreign countries, and wage systemabout the foreign enterprise in China with charts and numeralcomparison.From the result of these analyze, I made a derivation to therelationship between the change about wage system of the foreignenterprise and development of Chinese labor productivities,furthermore how the changes of developments can effects to the foreignenterprise.China is still has the low position of the productivity component, butthere are already pass through the time of the capital and labor.Investment environment changes more worse. Hence the foreignenterprise must be fully aware of these details.