China Minimum Wage Update

Recently, soaring costs in China’s traditional manufacturing clusters, including land prices, tightening environmental regulations, and wage overheads, have been posing challenges for manufacturers.

The Chinese government is apparently shifting from creating preferential policies for foreign investors towards instead favoring its local labor pool due to the country’s widening income gap. In addition, wage hikes will boost domestic consumption to keep the country’s economy expanding while overseas markets remain weak.

To that end, China’s Ministry of Human Resources and Social Security revealed the latest minimum wage levels across China in a press conference last month. The table below shows that most provinces and cities have set up minimum wage levels of more than RMB1,000.

The minimum wage levels of each province, municipality, and autonomous region are set in accordance with each region’s local conditions.

Under the Minimum Wage Law of the PRC, provinces should revise the minimum wage levels on an annual basis, but some provinces, such as Hainan and Tibet, have not changed their minimum wage levels since July 2010. Last year, the Ministry of Human Resources and Social Security reported that as of December 2011, 24 provinces and cities had raised minimum wage levels at an average growth rate of 22 percent.

Sources say that Hainan and Tibet are in the process of revising their minimum wage levels, as well.

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