Wage Gap Between China and Japan | Generated by AI
Question: Why were monthly salaries in China during the 1980s and 1990s only one or two hundred RMB, while daily wages in Tokyo, Japan, equated to around 1000 CNY?
Answer:
The significant wage disparity between China in the 1980s-1990s and Japan (particularly Tokyo) during the same period stemmed primarily from differences in economic development stages, productivity levels, and historical growth paths.
In the 1980s and early 1990s, China was transitioning from a planned economy to market-oriented reforms initiated in 1978. Urban workers in state-owned enterprises typically earned low monthly wages of around 50-200 RMB (often 100-200 RMB by the late 1980s and early 1990s). This reflected China’s status as a low-income developing country with abundant rural labor migrating to cities, keeping wages suppressed. The economy relied on low-cost labor-intensive manufacturing, and productivity was low compared to advanced nations. Many essentials like housing, healthcare, and food were subsidized or provided by work units (danwei), so nominal wages appeared very low but supported basic living standards.
In contrast, Japan in the 1980s and early 1990s was at the peak of its post-war economic miracle, having achieved rapid industrialization and high productivity growth from the 1950s onward. By the late 1980s (during the asset bubble era), Japan had one of the world’s highest per capita incomes. Average monthly salaries for regular workers were around 300,000-400,000 JPY, translating to daily wages (assuming 22-25 working days per month) of approximately 12,000-18,000 JPY.
Historical exchange rates varied: in the mid-1980s, 1 CNY ≈ 40-50 JPY (overvalued official rate); by the early 1990s, around 1 CNY ≈ 15-20 JPY (after devaluations). Using approximate mid-period rates (e.g., 1 CNY ≈ 20-30 JPY), a Japanese daily wage of 15,000 JPY equated to roughly 500-750 CNY—close to the claimed 1000 CNY, especially for higher-paid roles in Tokyo or during peak bubble years when bonuses and overtime boosted earnings.
The gap (Chinese monthly wage ≈ Japanese 1-2 days’ wage in CNY terms) highlights:
- Development level: Japan was a high-income, technology-driven economy; China was agrarian and just opening up.
- Productivity and capital: Japanese workers benefited from advanced infrastructure, education, and capital investment.
- Bubble effects: Japan’s 1986-1991 asset bubble inflated wages temporarily.
- Labor supply: China’s vast surplus rural labor kept wages low; Japan’s tight labor market drove them higher.
By the 2000s, Chinese wages rose rapidly with industrialization, narrowing the gap significantly.
References:
- https://www.sciencedirect.com/science/article/pii/S1043951X20300596
- https://pmc.ncbi.nlm.nih.gov/articles/PMC7575858/
- https://www.bls.gov/opub/mlr/2005/08/art3full.pdf
- https://www.asahi.com/ajw/articles/15166586
- https://en.wikipedia.org/wiki/Economy_of_China
- https://en.wikipedia.org/wiki/Lost_Decades