Summary of China Wage Tracker Conference Call Industry Overview - The focus is on the **Chinese labor market**, specifically wage growth trends and their implications for household income and consumption [3][4][26]. Key Points and Arguments 1. **Wage Growth Trends**: - The revamped wage tracker indicates a **downward trend in wage growth** since Q1 2023, following the exit from the zero-Covid policy. Wage growth dropped to **3.9% year-over-year (yoy)** in Q2 2025, the lowest reading outside of the Covid pandemic [3][26]. - In Q1 2025, wage growth was **4.2% yoy**, down from **4.5% yoy** in Q4 2024 [26]. 2. **Challenges in Data Collection**: - Tracking wage data in China is challenging due to **scarcity and measurement issues**. The release of the PBOC survey data has been significantly delayed, with the most recent data available being from **2024Q4** [3][4][5]. - The online recruiting platform Zhaopin.com ceased data publication in Q4 2024, further complicating data tracking [5]. 3. **Revamped Wage Tracker Methodology**: - The new wage tracker incorporates two alternative labor market indicators: - **Employment sub-indices from various PMI surveys**, which correlate highly with wage growth and indicate the labor market is near its weakest in a decade [3][11]. - **Unemployment insurance expenditure**, which correlates positively with the official unemployment rate and negatively with wage growth [14][19]. 4. **Economic Implications**: - Despite a **5.3% real GDP growth** in the first half of 2025, sluggish wage growth may pose headwinds to consumption growth in the latter half of the year [11][26]. - The correlation between increased labor market pressure and declining wage growth has become more pronounced since the onset of the Covid pandemic [19]. 5. **Comparison with Official Data**: - The new wage tracker suggests that the reported wage growth figures are around **1 percentage point lower** than the official figures provided by the NBS, which reported **5.2% and 4.7% yoy** for Q1 and Q2 2025, respectively [26]. Additional Important Insights - The revamped wage tracker was first introduced in **2016** and last modified in **June 2024**. The current modifications aim to provide a more accurate reflection of the labor market conditions in China [4][24]. - The unemployment insurance program serves as a valuable indicator of labor market pressure, with increased expenditure often coinciding with slower wage growth [14][19]. - The methodology for the new wage tracker includes regression analysis based on historical data from **2020 to 2024**, ensuring that the new estimates are grounded in empirical evidence [24][26]. This summary encapsulates the critical insights from the conference call regarding the state of wage growth in China, the challenges faced in data collection, and the implications for the broader economy.