China-India Wage Comparison

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May 10 – UBS, a global financial services company, has recently published its exhaustive global summary of prices and earnings as part of a report released once every three years. Using their listed global benchmark of New York as a standard for comparison, we have extrapolated the data UBS produced on China and India regarding wages and salaries.

For the complete UBS report, please click here.

Salary levels

Salary levels were determined as a composite of 14 different professions after taking deductions for taxes and social security into account. Taking New York as a benchmark of 100, the weighted ratios indicate that professionals in China earn an average of about 18 percent of their New York based counterparts, while in India the ratio is just above 8 percent.

This indicates that Indian professionals earn about 50 percent less than their Chinese counterparts and some 92 percent less than the average New York-based professional.

Hourly net pay

Again, data for China’s hourly rates indicate that levels for professionals are about double that of India in the primary cities. A reason for this may be the aging demographics of the Chinese population compared to India, which is experiencing a population boom and has, as a result, released a greater number of younger workers into its workforce.

In addition, China’s minimum wage levels are also more rigidly controlled than those in India.

Working hours per annum

Staff in India are apparently the hardest working in terms of working hours, likely a result of weak legislation on working hours. Meanwhile, China is quickly approaching the levels in the United States (U.S.) due to strictly enforced labor law regulations and the legal requirement to compensate for overtime work.

Gross annual income of car mechanics

Car mechanics are defined as having completed an apprenticeship, having five years of experience and of approximately 25 years of age. Wages in New York are 6 times higher than wages in Beijing and about 5 times higher than those in Shanghai.

New York based mechanics earn an average of nearly 25 times of what their counterparts in India make, despite Indians working a work week that is nearly 20 hours longer.

Shanghai mechanics log into and out of work at roughly the same times as their New York counterparts for about 20 percent of their pay.

Gross annual income of building laborers

Building laborers are defined as single, unskilled or semi-skilled laborers aged 25.

Wages in Beijing came in a bit higher than those in Shanghai this time around, albeit being more than ten times lower than the wages of their New York counterparts.

Meanwhile, laborers in India earned less than a quarter of those in Shanghai, making India the new go to area for low cost workers.

Gross annual income of skilled workers

Skilled workers are defined as possessing vocational training with ten years of experience with a large company in the metal-working industry. They are on average 35 years old and married with two children.

The previous disparity of income for workers between China and India begins to level-out at this level, although Shanghai still remains more expensive (between two to three times as much as wages in India).

Gross annual income and working hours of engineers

Engineers are defined as being a university or technical college graduate employed by an industrial firm in an electrical engineering position with at least five years of experience. They are on average 35 years old and married with two children.

In the three years since the last report, the gap has been closed between Indian and Chinese engineers, with Indian engineers almost making as much as their Chinese counterparts.

On the other hand, New York engineers still enjoy huge wage disparities that are close to 10 times more than their Chinese and Indian counterparts.

Gross annual income of product managers

Product managers are defined as employees with at least 5 years of experience in the pharmaceutical, chemicals or food industries currently at middle management with a university or technical college degree. They are on average 35 years old and married with two children.

Chinese product managers earn about the same as their Indian counterparts this time around, yet both still earn far less than their New York-based counterparts.

A sizeable difference exists between Delhi and Mumbai, mainly as there is a current preference to work in Mumbai due to an increased number of opportunities. However, we  can expect this gap to close in the short term as sought after managerial talent drives  wages up.

Gross annual income of department heads

Department heads are defined as employees that head a production department in a sizable company in the metal-working industry, with vocational training and many years of experience in the field. They are on average 40 years old and married with two children.

The wage gap between department heads in Shanghai and India has increased, with Shanghai-based department heads making about three times as much as Indian department heads. Beijing-based department heads make roughly the same as their Indian counterparts.

The higher the level of management, the smaller the wage gap between Chinese and American employees.

4 responses to “China-India Wage Comparison”

  1. james Anderson says:

    Very interesting concerning the average wage for trades and professions. India and China’s income are still a fair way behind the Western World

    Regards

  2. Erwin den Breejen says:

    Indeed interesting comparisons, although it really starts making sense if it related to hourly productivity and even more if also the quality of this productivity is included. This might paint an entirely different picture in a number of industries.

  3. NC Shetty says:

    Interesting analysis. With around double the salary at China, compare to India, most production jobs of advanced countries go to China, probably because of higher productivity and nil union activities. Can India not do this to get work orders from advanced countries?

    • madhava says:

      Market to some extent determines the consumption of goods and services produced.If the quality and the other aspect of the product and services are not in demand due to quality of the competition and resulting in low sales ,how does reducing the labour cost increase the the sales?

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