Page 56 - QEB_2_2016_lowres

Figure 19 % wage Growth in South Africa and China, 2004 – 2014

Source: Quantec, National Bureau of Statistics China, Own Calculations

Lower wage rate growth coupled with the fact that the rand depreciated by more
than 67% against the Chinese Yuan between 2004 and 2016 (from RMB 1.45 to the rand
to RMB 0.46 to the Rand, means that the average Chinese worker, in rand terms no
longer offers significant cost advantage over the South African worker. As illustrated by
the figure below, the average South African manufacturing worker earned more than
five times of South African manufacturing worker in 2004. By end 2015, the premium
paid for a South African manufacturing worker, in Rand terms, was only 37%. Over the
last three years alone, Chinese manufacturing wages increased by 29.

Figure 20 Average Yearly Manufacturing Wages for South Africa and China (Rand)

200 000 100%
180 000 90%
160 000 80%
140 000 70%
120 000 60%
100 000 50%
80 000 40%
60 000 30%
40 000 20%
20 000 10%
0 0
12/1/2004 12/1/2005 12/1/2006 12/1/2007 12/1/2008 12/1/2009 12/1/2010 12/1/2011 12/1/2012 12/1/2013 12/1/2014 12/1/2015

China (ZAR) South Africa (Rands) % Difference in SA and Chinese Manufacturing Wages

Source: Quantec, National Bureau of Statistics China, Own Calculations & IHSs

52 QUARTERLY ECONOMIC BULLETIN 2016