{"nid":3709,"uuid":"57034eba-4358-420c-803a-cf14c57de357","vid":3722,"langcode":"en","type":"node:article","uid":13185,"title":"A Guide to Minimum Wages in China in 2020","created":1588730106,"changed":1588731262,"promote":0,"sticky":0,"revision_default":1,"path":"\/article\/guide-minimum-wages-china-2020-0","metatag":[{"tag":"meta","attributes":{"name":"title","content":"A Guide to Minimum Wages in China in 2020 | Amcham"}},{"tag":"meta","attributes":{"name":"description","content":"Minimum wages in China continue to grow. So far, in 2020, Fujian, Qinghai, and Guangxi have raised their minimum wages. While the provinces of Qinghai and Fujian had announced their 2020 minimum wage increase last year, Guangxi is the only province to announce and implement an increase to their statutory wage after the coronavirus outbreak. Last year, seven regions (Chongqing, Shaanxi, Shanghai, Beijing, Hebei, Fujian, and Qinghai) in China announced an increase in their minimum wage."}},{"tag":"link","attributes":{"rel":"image_src","href":"http:\/\/www.amcham-shanghai.org\/sites\/default\/files\/styles\/max_650x650\/public\/2020-05\/shutterstock_177062339.jpg?itok=WONIp4DO"}},{"tag":"meta","attributes":{"property":"og:image","content":"http:\/\/www.amcham-shanghai.org\/sites\/default\/files\/styles\/max_650x650\/public\/2020-05\/shutterstock_177062339.jpg?itok=WONIp4DO"}}],"body":"\u003Cp\u003EMinimum wages in China continue to grow.\u003C\/p\u003E\n\n\u003Cp\u003ESo far, in 2020, Fujian, Qinghai, and Guangxi have raised their minimum wages.\u003C\/p\u003E\n\n\u003Cp\u003EWhile the provinces of Qinghai and Fujian had announced their 2020 minimum wage increase last year, Guangxi is the only province to announce and implement an increase to their statutory wage after the coronavirus outbreak.\u003C\/p\u003E\n\n\u003Cp\u003ELast year, seven regions (Chongqing, Shaanxi, Shanghai, Beijing, Hebei, Fujian, and Qinghai) in China announced an increase in their minimum wage.\u003C\/p\u003E\n\n\u003Cp\u003EIn 2018, 15 out of the 31 regions in mainland China increased their minimum wages, while 20 provinces did so in 2017.\u003C\/p\u003E\n\n\u003Cp\u003ELocal governments in China are required to update their minimum wages at least every few years but have the flexibility to adjust wages according to local conditions.\u003C\/p\u003E\n\n\u003Cp\u003EMost provinces set different classes of minimum wage levels for different areas depending on the given region\u2019s level of development and cost of living.\u003C\/p\u003E\n\n\u003Cp\u003EFor example, a higher minimum wage class for the provincial capital and the most developed cities, and a lower class for smaller cities and rural areas.\u003C\/p\u003E\n\n\u003Cp\u003EA complete guide to China\u2019s minimum wages can be found below.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cimg alt=\u00221\u0022 data-entity-type=\u0022file\u0022 data-entity-uuid=\u0022cac85787-1768-42f6-8473-b32ea1b6b4ca\u0022 src=\u0022\/sites\/default\/files\/inline-images\/pic1_11.jpg\u0022 width=\u0022900\u0022 height=\u00225762\u0022 loading=\u0022lazy\u0022\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cstrong\u003EChina\u2019s minimum wage: Understanding regional variation\u003C\/strong\u003E\u003C\/p\u003E\n\n\u003Cp\u003EHunan, Gansu, Guizhou, Tianjin, and Zhejiang are among the regions likely to adjust their minimum wages in mid to late 2020, given that they have not done so in the past two years.\u003C\/p\u003E\n\n\u003Cp\u003EChinese regions often opt to increase minimum wages to keep pace with the cost of living increases, so other regions may also adjust their wage standards later this year.\u003C\/p\u003E\n\n\u003Cp\u003EThat being said, 2020 might see fewer wage increases than usual given the coronavirus pandemic, which has shifted the need to reduce the financial burden on enterprise and job stabilization to the forefront. The reorientation of priorities are also set against the backdrop of an ongoing US-China trade war and an economic slowdown.\u003C\/p\u003E\n\n\u003Cp\u003ERegions may opt to freeze local wages in order to maintain their economic competitiveness amid the uncertainty.\u003C\/p\u003E\n\n\u003Cp\u003ECurrently, the highest minimum wages are in parts of Guangdong, Jiangsu, and Zhejiang provinces, which have all surpassed the RMB 2,000 (US$289) mark, as well as in the municipalities of Beijing, Shanghai, Shenzhen, and Tianjin.\u003C\/p\u003E\n\n\u003Cp\u003EShanghai continues to have the highest minimum wage in China, at RMB 2,480 (US$358) per month, followed by Shenzhen and Beijing, both at RMB 2,200 (US$318) per month.\u003C\/p\u003E\n\n\u003Cp\u003EAt the lowest end, the minimum wage in certain rural areas of Liaoning (RMB 1,120\/US$162), Hunan (RMB 1,130\/US$163), and Anhui (RMB 1,150\/US$166) slightly higher.\u003C\/p\u003E\n\n\u003Cp\u003EHowever, while China is still among the most unequal countries in the world in terms of income inequality, it has made some progress over the past decade.\u003C\/p\u003E\n\n\u003Cp\u003EAccording to China\u2019s National Bureau of Statistics, the country\u2019s Gini Coefficient dropped from 0.491 in 2008 to 0.465 in 2016, where a higher number denotes larger inequality.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cstrong\u003EImpact on China\u2019s labor costs\u003C\/strong\u003E\u003C\/p\u003E\n\n\u003Cp\u003EMinimum wages only tell part of the story of labor costs in China.\u003C\/p\u003E\n\n\u003Cp\u003EAs China\u2019s economy moves up the value chain and transitions to innovation and services, most workers employed by foreign-invested enterprises earn above the minimum wage.\u003C\/p\u003E\n\n\u003Cp\u003EFor example, workers in Shanghai made an average of RMB 9,723 (US$1,405) per month through the first quarter of 2019 \u2013 over four times the local minimum wage.\u003C\/p\u003E\n\n\u003Cp\u003EMoreover, employer social insurance and housing fund obligations add an additional 37.25 percent to an employee\u2019s salary on average.\u003C\/p\u003E\n\n\u003Cp\u003EChina\u2019s rapidly rising wages are partly explained by the country\u2019s labor pool which, while enormous, is gradually shrinking.\u003C\/p\u003E\n\n\u003Cp\u003EIn 2018, China\u2019s employed population declined for the first time ever, falling by 540,000 for a total of 776 million.\u003C\/p\u003E\n\n\u003Cp\u003EThis trend is exacerbated in China\u2019s wealthy coastal regions \u2013 the traditional hotbed for foreign investment and manufacturing \u2013 which migrant workers are leaving in favor of inland China.\u003C\/p\u003E\n\n\u003Cp\u003EAccording to the National Bureau of Statistics, in 2016 the migrant worker population in coastal provinces fell by 0.3 percent, while that of Western provinces grew by 5.3 percent.\u003C\/p\u003E\n\n\u003Cp\u003EFor foreign investors, rising wages are an unavoidable feature of doing business in China.\u003C\/p\u003E\n\n\u003Cp\u003ENevertheless, when other factors like productivity, infrastructure, transportation costs, and access to a massive domestic market are considered, China may still emerge as the more cost-efficient option compared to countries with lower statutory labor costs.\u003C\/p\u003E\n\n\u003Cp\u003EWhen comparing locations for foreign investment into China, minimum wages are a helpful barometer to gauge labor costs across different regions.\u003C\/p\u003E\n\n\u003Cp\u003EFrom there, identifying industry-specific wage levels, availability of talent, and access to regional incentives offer a more nuanced view of ultimate labor costs within a given region.\u003C\/p\u003E\n\n\u003Cp\u003E\u0026nbsp;\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cem\u003E(The latest version of this article was published April 29, 2020. The article was originally published in November, 2018.)\u003C\/em\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u0026nbsp;\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cem\u003EThis article was first published by China Briefing, which is produced by Dezan Shira \u0026amp; Associates. The firm assists foreign investors throughout Asia from offices across the world, including in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to info@dezshira.com for more support.\u003C\/em\u003E\u003Cbr\u003E\n\u0026nbsp;\u003C\/p\u003E\n","field_author_informations":"Alexander Chipman Koty and Qian Zhou, China Briefing, Dezan Shira \u0026 Associates","field_featured":0,"field_popular":0,"field_slider_advertisement":0,"field_stick_home_slider":0,"field_theme":[{"id":1170,"type":"taxonomy_term:theme","name":"Business Partnership"}],"field_thumbnail":{"alt":"","title":"","src":"http:\/\/www.amcham-shanghai.org\/sites\/default\/files\/2020-05\/shutterstock_177062339.jpg"},"_embedded":{"taxonomy_term:theme":{"1170":{"tid":1170,"uuid":"14a8b38d-b79b-46b8-8415-cc6ee9ba23ad","langcode":"en","vid":{"id":"theme","type":"taxonomy_vocabulary"},"name":"Business Partnership","description":"","changed":1769160310,"revision_default":1,"path":"\/taxonomy\/term\/1170","metatag":[{"tag":"meta","attributes":{"name":"title","content":"Business Partnership | Amcham"}}],"field_featured":0,"_embedded":{"taxonomy_vocabulary":{"theme":{"uuid":"39cab172-dab7-4886-9c31-fce39b05d215","langcode":"en","name":"Theme","vid":"theme","description":null,"new_revision":false}}},"_links":{"self":{"href":"http:\/\/www.amcham-shanghai.org\/api\/taxonomy\/term\/1170"}},"field_template_key":"taxonomy_term.theme"}}},"_links":{"self":{"href":"http:\/\/www.amcham-shanghai.org\/api\/article\/guide-minimum-wages-china-2020-0"}},"field_member_only":0,"field_template_key":"node.article","author":{"id":13185,"type":"user","display_name":"andyxie-admin"},"breadcrumb":[{"text":"Home","uri":"\/"},{"text":"Publications","uri":"\/content"},{"text":"Business Partnership","uri":"\/taxonomy\/term\/1170"},{"text":"A Guide to Minimum Wages in China in 2020","uri":"\/article\/guide-minimum-wages-china-2020-0"}],"category":{"id":"1170","name":"Business Partnership","path":"\/taxonomy\/term\/1170","type":"node:article"}}