As the primary means of initial distribution, reasonable wage growth mechanisms and structures are keys to present fairness and efficiency in the initial distribution. At present stage, China's wage share of GDP remains low, and the growth rate is relatively slow. To answer the questions about how to improve the residents' wage income, how to improve the proportion of total wages in GDP, and how to establish a normal wage increase mechanism, we need a deep understanding of the Chinese wage formation mechanism.

Since approved in January 2009, the National Natural Science Foundation Funded Project --" China’s Wage Formation Mechanism since the Reform and Opening-up" (Project Approval Number: 70873022) led by Professor Zhang Jun of Fudan University has formed a research team. The members include Professor Chen Zhao, Associate Professor Luo Changyuan, Chen Shiyi,Zhang Yuan, Fang Hongsheng,  Fan Ziying, Dr.Zhan Yubo and other graduate students such as Xie Lulu, Tang Dongbo, Liu Xiaofeng, Zhang Xiaomu, Huang Bo and Tang Maohu and so on. Their researches mainly focus on the following subjects: changes of the labor income share in China, the evolution of the wage system and its impact on the staff wages, the impact of fiscal decentralization and local government policies on wage differentials between regions, economic structural adjustment and the impact of inter-professional wage spillover on inter-professional wage differentials，and social capital's impact on the staff salaries. They have completed more than 20 papers, some have been published in influential academic journals both international and domestic，such as China Economic Review (forthcoming), China and the World Economy (2010, Vol.18, 6), Social Sciences in China (2009, No.4), China Social Sciences (2009,No.4, 2010,No.3), Economic Research (2009,NO.7,2009,NO.10,2009,NO.12), Management World(2009,NO.5, 2009,NO.7, 2010,NO.2), China Industrial Economy (2010,No.12) and World Economic Papers(2010,NO.2) and so on.

Based on industry data, the research group studied the phenomenon that the labor income share had been decreasing since mid-1990s. After decomposition of the labor income share, they found that compared to 1993, the increase of the labor income share in 1996 was mainly caused by the increasing share of the secondary industry labor income, while compared to 1996, the decrease of the labor income share in 2003 was mainly related to the declined proportion of the first industry, and the severe decline of labor income in 2004