Wu Haifeng, head of the A-shares research department at Noruma, said pay rises are believed to increase the cost of production and squeeze companies' profits, but these negative impacts can be offset by many factors, most importantly, increased labor productivity.
Wu said in his column on the country's leading financial media caiing.com that China has witnessed an average annual salary rise of over 15 percent in the past 10 years, but the pressure of salary hikes may have generally been absorbed by increasing labor productivity.
"We have not found any industries hit by salary rises and suffering continuous decline in share values in the past 10 years," he said.
Analysts say as China pays increasing attention to the balance of economic structure and accelerate income distribution reform, salary rises will become a trend. It will force Chinese companies to speed up industrial upgrading and increase the contribution of consumption to GDP growth.
Wu said he expects machinery manufacturing, consumer goods, and medical industries to benefit most from the adjustments.