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Salary Trends in China Present New Business Opportunities

Good article. I must add that benefits could also add to the compensation costs significantly. Beijing and the first tier cities have much higher benefit costs for medical, unemployment insurance, housing funds, etc. For example, Jinan have lower percentage of salary for medical insurance premium cost while Beijing's premium rate is 33% higher than Jinan on a higher base and higher ceiling. Unless your company needs to contact the central government frequently, there is not much point of being in Beijing. The benefits of being in Shanghai may not be justifiable either.

Average annual salary for a city means very little because they are pulled down by small private enterprises and some borderline companies who pay very low. Our average in Beijing for local staff is USD33k per person per year (including bonus) for an office staff of 35 of which our lowest paid receptionist costs about USD10k per year (including benefits and bonus). I know we are not the highest paying foreign company here. The city average is almost irrelevant for foreign companies, only good as an indicator.