Ten Chinese Provinces Update Minimum Wage Level in First Half of 2018

Until July 1, 2018, ten regions of China have increased the minimum wage level. The rise, an average of ten percent, continues the conservative trend seen in recent years. End Quote

(1888PressRelease) August 22, 2018 - Following the conservative minimum wage adjustments seen in recent years, so far, in 2018, ten Chinese provinces have increased minimum wage levels. The increase, on average, has been ten percent.

These regions are:

• Shanghai
• Guangdong
• Shandong
• Xinjiang
• Sichuan
• Jiangxi
• Guangxi
• Yunnan
• Xizang
• Liaoning

According to official data from the National Bureau of Statistics (NBS) and the Ministry of Human Resource and Social Security, the upwards adjustments made by the ten provinces in the first half of 2018 compare to only nine regional minimum wage increases in the whole of 2016 and 20 in the whole of 2017.

The Chinese minimum wage is the lowest amount an employer can legally pay for work performed within the legal standard working hours or specific working hours in accordance with their employment contract. The new ‘Provisions on Minimum Wage’, states that minimum wage can be one of two types:

• Monthly – applies to full-time employees
• Hourly – applies to part-time or temporary employees

Currently, only five regions have exceeded the 2000CNY level – Beijing, Tianjin, Shanghai, and A class regions in Zhejiang and Guangdong. Shanghai continues to raise its minimum wage standard steadily, a trend that begin in 2010. The monthly standard for Shanghai is now 2420CNY, making it the highest minimum wage level in China. At the same time, its hourly standard is 21CNY, making it second to Beijing. It should be noted, the Shanghai government has stipulated that the monthly minimum wage standard should not include “social insurance premiums and housing provident funds paid by individuals according to law”, and the hourly minimum wage standard should not include “social insurance premiums paid by individuals and employers according to law”.

In 2004, the former Ministry of Labor and Social Security issued The Minimum Wage Regulations announced that the Chinese minimum wage must be updated at least every two years. This was altered in 2015, when the Ministry of Human Resources and Social Security stipulated that provinces and cities should consider the local economy and the realities of local enterprise when making their decisions, thus allowing them to adjust the frequency of minimum wage increases to ensure a steady rise, through intervals of two or three years. Following this Notice, regions such as parts of Guangdong province, Xinjiang Uygur Autonomous Region, Sichuan province, Jiangxi province, Guangxi Zhuang Autonomous Region, Yunnan province, and Tibet Autonomous Region, have all slowed down their rate of increase on the basis of the 2015 announcement.

So far in 2018, Guangxi Zhuang Autonomous Region and Sichuan province have had the highest percentage increases, both increasing by 20%. Other areas, for example Shanghai and Shandong have seen lower increases but also increased their levels in 2017.

The latest figures also show that Guangdong province has the largest wage gap, for monthly wage and hourly wage between Class A areas and Class D areas – 790CNY and 6.3CNY. Liaoning province is second with a monthly wage gap of 500CNY and hourly wage gap of 5.4CNY.

Stakeholders are advised to check their businesses and suppliers are compliant with the local minimum wage level to ensure compliance with responsible purchasing policies.

For a more comprehensive review of Chinese Minimum Wage data, see Safeguard 112/18.

For detailed information on the different regions, cities and towns, see SGS China’s Minimum Wage Map. (https://www.sgsgroup.com.cn/zh-cn/app/china-wages-map)

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SGS SafeGuardS keep you up to date with the latest news and developments in the consumer goods industry. Read the full China: 10 Provinces have Updated the Minimum Wage in the First Half of 2018: [www.sgs.com/en/news/2018/08/safeguards-11218-china-10-provinces-have-updated-the-minimum-wage-in-the-first-half-of-2018] SafeGuardS.

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For further information contact:

Olina Cai
Marketing Executive
Supply Chain Assessments & Solutions
Tel: +86 (0)755-2532 8137
Email: crs.media ( @ ) sgs dot com
Website: www.sgs.com/sas

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