Shanghai, Shandong, Sichuan and Tianjin hike up minimum wage levels in 2012
Feb. 28 – A number of local governments across China have recently announced plans to further raise minimum wage levels in an effort to keep up with the national minimum wage growth target of 13 percent per year, set in the latest 12th Five-Year Plan on Employment Improvement.
In addition, the northern Municipality of Tianjin also announced plans to lift its monthly minimum wage levels by 13 percent, from the existing level of RMB1,160 to RMB1,310.
According to the “Minimum Wage Provisions (MHRSS  No.21),” minimum wages shall not include the following payments:
The Minimum Wage Provisions also say that local governments should measure their minimum wage levels based on a combination of regional variables, including: average living costs, employees’ personal contributions to the social insurance and housing funds, average wage levels, unemployment rates, and regional economic growth rates.
However, despite regional differences, all four of the areas mentioned above have boosted their minimum wage levels by around or more than 13 percent this year, and this trend will likely continue for the next three to four years, as 13 percent is the annual increase rate the central government has aimed for in its 12th Five-Year Plan.
Seeing the fast increasing operational costs in China’s coastal areas, many investors may consider relocating their factories to China’s western regions, not only to take advantage of the low labor costs there, but also to enjoy the growth potential introduced by the country’s “Go West” Campaign. However, it is worth noting that the local residents’ revenue in those regions may grow even faster than the national average level within the next few years, as it is a specific request made in the “12th Five Year Plan for Further Promoting the Economy of the Western Regions.” For instance, it can be seen that the minimum wage growth rate in Sichuan Province’s first-tier area – which is currently on the government’s priority list for economic development – has reached 23.5 percent this year, almost doubling the national wage development goal.
Dezan Shira & Associates is a specialist foreign direct investment practice and can advise international companies investing in China on the country’s complete legal, tax and operational issues. The firm was established in 1992 and maintains 12 offices throughout China, in addition to practicing in Hong Kong, India, Vietnam and Singapore. For advice on all matters of China HR, payroll and costs, please contact the firm at email@example.com or visit our web site at www.dezshira.com.
This article is also available on Dezan Shira & Associates’ online business resource library. To view the article, and other regulatory updates, please click here.
Human Resources in China
Specifically designed to cover the most important issues relating to managing a Chinese workforce, this guide details the HR issues that both local managers in China and investors looking to establish a presence on the mainland should be aware about.
China Approves 12th Five-Year Plan for Western Regions
Minimum Wage Levels Across China
China Vows to Increase Wages and Improve Employment
Shenzhen, Beijing Raise Minimum Wage Standards
Beijing Looks to Hike Average Wages
Previous Article « China Law Deskbook Legal Update – Feb. 2012
Next Article Following Shanghai, Beijing to Roll out VAT Reform in July »
Dezan Shira & Associates´ brochure offers a comprehensive overview of the services provided by the firm. With its team of lawyers, tax experts, auditors and...
Doing Business in China 2022 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates in...
With the scope and penalties of China’s social credit system being further clarified in 2021, legal and regulatory compliance has become more important than...
As a legitimate tool for reasonable tax planning and cost saving, tax incentives play an important role. Companies also use tax incentives as a useful...
A firm understanding of China’s laws and regulations related to human resources and payroll management is absolutely necessary for foreign businesses in...
Over the last few months, China has been quickly expanding the pilot program on electronic special value-added tax (VAT) fapiao (hereafter special VAT...
Dezan Shira & Associates helps
businesses establish, maintain,
and grow their operations.
Stay Ahead of the curve in Emerging Asia. Our subscription service offers regular regulatory updates,
including the most recent legal, tax and accounting changes that affect your business.