Claims that labour shortages and rising cost pressures are seriously imperilling China's manufacturing competitiveness have become a hardy perennial in recent years. This spring has produced another crop. Just like earlier ones, they will almost certainly turn out to be greatly overblown.

One supposed alarm signal is the proposed rise of up to 23 per cent in the minimum wage in Shenzhen, the prosperous special economic zone bordering Hong Kong. In fact, it is a sign of success, not of problems. Shenzhen's minimum wage has traditionally been among the highest in the country, rising repeatedly by double-digit annual amounts since 1992. The region knows that, to maintain rapid growth, it must keep on attracting labour. If local industry were in deep trouble, it would be demanding a freeze, not accepting increases as an economic fact of life.