China: 10 Provinces have Updated the Minimum Wage in the First Half of 2018
Over the past two years, minimum wage adjustments have tended to be steady and conservative. In 2018, 10 provinces have increased minimum wage levels by an average of 10%.
SAFEGUARDS | Labor Standards NO. 112/18
The legal minimum wage is the lowest amount which employers may pay to employees for work performed within the legal standard working hours, or specific working hours in accordance with their employment contract. According to the new Provisions on Minimum Wage, the minimum wage is one of 2 types – the monthly minimum wage and the hourly minimum wage. The monthly minimum wage applies to full-time employees, and the hourly minimum wage applies to others such as part-time and temporary employees.
Over the past two years, minimum wage adjustments have tended to be steady and conservative. Official data from China’s National Bureau of Statistic (NBS) and the Ministry of Human Resource and Social Security showed that 19 regions increased the minimum wage in 2014 and 27 regions in 2015. Although only 9 regions adjusted the minimum wage in 2016, this number increased to 20 in 2017. To date in 2018, about 10 regions have raised their minimum wage, however there are still differences in whether the minimum wage standard should include social insurance premiums and housing provident funds paid by individuals.
As of July 1, 2018, 10 provinces and cities have updated their minimum wages. Further information is listed in the following table: (sorted by Class area from highest to lowest)
|Provinces/Cities||Class||Effective date||Monthly (full-time)||Hourly (part-time)|
|2018 (CNY)||2017 (CNY)||Increase rate （%）||2018 (CNY)||2017 (CNY)||Increase rate （%）|
|Shanghai||A||2018/04/01||2420||2300 (2017 data)||5.2%||21||20 (2017 data)||5%|
|Guangdong||A (Shenzhen)||2018/07/01||2200||2130 (2017 data)||3.3%||20.3||19.5 (2017 data)||4.1%|
|A (Guangzhou)||2100||1895 (2015 data)||10.8%||20.3||18.3 (2015 data)||11%|
|B||1720||1510 (2015 data)||13.9%||16.4||14.4 (2015 data)||13.9%|
|C||1550||1350 (2015 data)||14.8%||15.3||13.3 (2015 data)||15%|
|D||1410||1210 (2015 data)||16.5%||14||12 (2015 data)||16.7%|
|Shandong||A||2018/06/01||1910||1810 (2017 data)||5.5%||19.1||18.1 (2017 data)||5.5%|
|B||1730||1640 (2017 data)||5.5%||17.3||16.4 (2017 data)||5.5%|
|C||1550||1470 (2017 data)||5.4%||15.5||14.7 (2017 data)||5.4%|
|Xinjiang||A||2018/01/01||1820||1670 (2015 data)||9%||18.2||16.7 (2015 data)||9%|
|B||1620||1470 (2015 data)||10.2%||16.2||14.7 (2015 data)||10.2%|
|C||1540||1390 (2015 data)||10.8%||15.4||13.9 (2015 data)||10.8%|
|D||1460||1310 (2015 data)||11.5%||14.6||13.1 (2015 data)||11.5%|
|Sichuan||A||2018/07/01||1780||1500 (2015 data)||18.7%||18.7||15.7 (2015 data)||19.1%|
|B||1650||1380 (2015 data)||19.6%||17.4||14.4 (2015 data)||20.8%|
|C||1550||1260 (2015 data)||23%||16.3||13.2 (2015 data)||23.5%|
|Jiangxi||A||2018/01/01||1680||1530 (2015 data)||9.8%||16.8||15.3 (2015 data)||9.8%|
|B||1580||1430 (2015 data)||10.5%||15.8||14.3 (2015 data)||10.5%|
|C||1470||1340 (2015 data)||9.7%||14.7||13.4 (2015 data)||9.7%|
|D||--||1180 (2015 data)||--||--||11.8 (2015 data)||--|
|Guangxi||A||2018/02/01||1680||1400 (2015 data)||20%||16||13.5 (2015 data)||18.5%|
|B||1450||1210 (2015 data)||19.8%||14||11.5 (2015 data)||21.7%|
|C||1300||1085 (2015 data)||19.8%||12.5||10.5 (2015 data)||19%|
|D||--||1000 (2015 data)||--||--||9.5 (2015 data)||--|
|Yunnan||A||2018/05/01||1670||1570 (2015 data)||6.4%||15||14 (2015 data)||7.1%|
|B||1500||1400 (2015 data)||7.1%||14||13 (2015 data)||7.7%|
|C||1350||1180 (2015 data)||14.4%||13||12 (2015 data)||8.3%|
|Xizang||A||2018/01/01||1650||1400 (2015 data)||17.9%||16||13 (2015 data)||23%|
|Liaoning||A||2018/01/01||1620||1530 (2016 data)||5.9%||16||15 (2016 data)||6.7%|
|B||1420||1320 (2016 data)||7.6%||14||13 (2016 data)||7.7%|
|C||1300||1200 (2016 data)||8.3%||11.8||10.8 (2016 data)||9.3%|
|D||1120||1020 (2016 data)||9.8%||10.6||9.5 (2016 data)||11.6%|
*The monthly minimum wage and hourly minimum wage standards in Jiangxi and Guangxi Zhuang Autonomous Region were adjusted to 3 levels.
**The minimum wage standard in Tibet Autonomous Region is unified in the whole province.
***A、B、C、D mean regional level in each province.
Up to now, the minimum wage standards in 5 regions have exceeded 2000CNY, including Beijing, Tianjin, Shanghai, A class regions in Zhejiang, and A class regions in Guangdong. Since 2010, Shanghai has been raising its minimum wage standard steadily every year. The monthly standard in Shanghai has reached 2420CNY, still ranking first in China, and the hourly standard is 21CNY, second only to Beijing. In addition, Shanghai government 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”.
The Former Ministry of Labor and Social Security issued The Minimum Wage Regulations in 2004, which stipulated that the minimum wage in China must be updated at least every two years. According to the economic situation, the Ministry of Human Resources and Social Security revised the regulations in 2015, and issued the Notice about Readjustment of the minimum wage standard. The Notice required provinces and cities to fully consider the development of local economic situations and the actual situation of enterprises, grasping the adjustment step steadily, modifying the adjustment frequency of minimum wage standard to ensure each update interval is two to three years at least. Regions have slowed down the pace of adjusting the minimum wage gradually according to the Notice, such as some regions in Guangdong province, Xinjiang Uygur Autonomous Region, Sichuan province, Jiangxi province, Guangxi Zhuang Autonomous Region, Yunnan province, and Tibet Autonomous Region, all of which raised the minimum wage standard on the 2015 basis.
In the table, we can see that in the 10 provinces and cities, the adjusted minimum wage in Class A areas has exceeded 1600CNY. Guangxi Zhuang Autonomous Region and Sichuan province hold the maximum adjustment in the first half of 2018, and the increasing rates of both reached 20%. The adjustments in some regions are relatively small considering they had raised the minimum wage standard in 2017, for example, the increase rate is between 5% to 6% in Shanghai and Shandong, and the monthly minimum wage growth rate is just 3.3% in Shenzhen. After the adjustment, Guangdong province has the largest wage gap, for the monthly wage gap and the hourly wage gap between Class A areas and Class D areas is 790CNY and 6.3CNY respectively within province. The second is Liaoning province, in which the monthly wage gap is 500CNY and the hourly wage gap is 5.4CNY.
In addition, considering the development of economy, employment situation, price index, the situation of low-income workers, and income distribution gap in regions, Jiangxi province and Guangxi Zhuang Autonomous Region reduced the minimum wage standard from original four classes to three classes.
Data source: Human Resources and Social Security department (bureau) websites of provinces and cities listed in the table
Table design: SGS SAS 
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