Inflation and a lack of highly skilled labor are prompting Chinese companies to boost their payrolls next year by nearly 10%, according to the 2007 China Compensation Report released recently, the official Xinhua News Agency reported. The estimate was based on information from over 500 business entities in China. The report said the companies surveyed, including foreign-funded, state-owned, and joint venture firms, plan to raise salaries by 9.4% on average in 2008, the highest rate for the past three years. Taking inflation into account, the net increase will be 6.4%. Blue-collar workers can expect to enjoy a bigger increase than their white-collar counterparts for the first time in three years, largely due to intensified demand for trade staff. Insurers and banks will dole out higher-than-average increases in 2008, compared to other sectors like chemical, oil and gas, agriculture, logistics, and retail. Rapidly industrialized cities like Suzhou and Tianjin should expect bigger salary increases than the national average as they have attracted many large-scale foreign investments from companies like Airbus.

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