Some provinces increase minimum wage again after one year hiatus

29 March 2021

After a one-year freeze engendered by the Covid-19 pandemic and the attendant economic slowdown, a few regional governments have finally announced plans to increase their statutory minimum wage.

However, no major cities or any economically developed provinces like Guangdong have thus far released definitive minimum wage adjustment plans for this year.

Provincial and regional governments are responsible for setting minimum wage rates in their jurisdictions according to national guidelines. The authorities typically set different tiers to account for economic disparities, such as lower rates in smaller cities.  

Heilongjiang, in northeast China, will increase its minimum wage rates this week, on 1 April. The highest monthly rate will be 1,860 yuan, but the lowest rate will still only be 1,450 yuan, an amount more than 1,000 yuan lower than Shanghai, which currently boasts China’s highest minimum wage rate of 2,480 yuan per month.

The inland province of Jiangxi will likewise increase its monthly minimum wage rates on 1 April. The highest monthly rate in the provincial capital, Nanchang, will rise from 1,680 yuan to 1,850 yuan, with the hourly rate increasing from 16.8 yuan to 18.5 yuan.

On 1 May this year, the western province of Shaanxi will increase its monthly minimum wage rates across the board by 150 yuan, bringing the highest rate to 1,950 yuan and the lowest rate to 1,750 yuan per month.

The municipal governments of Tianjin and the Sichuan capital of Chengdu have indicated that their minimum wage rates will increase this year, but no details have been provided so far.

Last year was the first year since the global economic crisis in 2009 that none of China’s provinces and regions announced a minimum wage increase. Major cities, including Beijing, Shanghai and Shenzhen, announced minimum wage freezes for the whole of 2020 and have yet to indicate whether there will be an adjustment this year. 

The last time Guangdong increased its minimum wage rates was 1 July 2018. The provincial government has stated that it will make adjustments every three years - as opposed to the recommended biennial increase - but so far there has been no announcement of a raise this year.

The central government has released optimistic economic forecasts for 2021, and it is possible that more provincial and regional governments will make minimum wage adjustments this year. However, any increase will likely be quite modest, especially compared to the double-digit increases seen in 2010 and 2011.

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