The Economist Intelligence Unit (EIU), part of the Economist publishing group, has said manufacturing labour costs in China will continue to increase steeply on an annual basis, albeit at a more moderate rate than in recent years.

Wages have been rising rapidly since 2000, when national average manufacturing labour earnings stood at an estimated $0.4 per hour. This had risen to US$2.1 per hour in 2012 – growing 14% annually.

The EIU expects annual earnings growth of 12% in the period from 2013 to 2020. “However, even against established emerging markets, China is likely to remain price-competitive in manufacturing labour costs for a number of years to come,” it said.

Manufacturing employees in the central provinces of Henan, Hebei and Shanxi saw their earnings rise significantly. The earnings of workers in the central province of Anhui rose more than six-fold between 2000 and 2012, due to a government policy of moving manufacturing inland.

“Among provinces, we anticipate that the gap between manufacturing earnings will continue to narrow,” it added. “The EIU forecasts that by 2020 the earnings of factory workers in Beijing, which are anticipated to be the highest in the country, at nearly Rmb42.7/hour, will be 1.8 times greater than those in the southern island province of Hainan.”