China Pushes Minimum Wage Hikes to Spur Sluggish Consumption
By Tang Hanyu
A wave of minimum-wage increases is sweeping across China, with major economic hubs like Beijing and regions such as Hunan province announcing fresh hikes as part of a national push to lift incomes for the country’s lowest-paid workers.
The moves, which will affect millions, signal a renewed effort by authorities to address wage stagnation and stimulate consumer spending. Nearly half of China’s provinces have now announced or prepared for increases this year.
The Beijing Human Resources and Social Security Bureau announced that its monthly minimum wage for full-time workers will rise to 2,540 yuan ($350) from 2,420 yuan ($334), effective Sept. 1, 2025. The hourly minimum will increase to 27.7 yuan ($3.82).
Hunan province will implement its new standards on Sept. 1 of this year, with its three-tiered monthly minimum wages rising by 100 yuan ($14) to 2,200 yuan ($303), 2,000 yuan ($276), and 1,800 yuan ($248), respectively.
Other regions have already acted. Shanghai raised its monthly minimum wage on July 1 to 2,740 yuan ($378), the highest in the country, though the 50 yuan increase was smaller than in previous years. The provinces of Guangxi and Qinghai also implemented increases that pushed their top-tier minimum wages above the 2,000 yuan mark for the first time.
The campaign follows directives from Beijing. The Special Action Plan to Boost Consumption, released in March by the central government, called for a mechanism to “scientifically and reasonably raise the minimum wage standard.” Li Chunlin, vice chairman of the National Development and Reform Commission, said at a press conference that the goal was to ensure the minimum wage is adjusted “on time and steadily.”
A report from the commission later specified that all provinces should, in principle, adjust their minimum wages in 2025.
This marks a potential acceleration. While regulations from the Ministry of Human Resources and Social Security mandate adjustments at least every two years, many provinces have stretched the cycle to three years or more in recent practice. Xinjiang’s last increase was nearly four years ago.
The scale of the current round of hikes varies. While Beijing’s increase of 120 yuan is larger than its previous 100 yuan bump in 2023, some regions are seeing smaller gains. Chongqing and Sichuan, for instance, raised their top-tier minimum wages by 300 yuan ($41) in 2022 but by only 230 yuan ($32) in the latest adjustment this January.
A critical detail complicating national comparisons is what the wage figure includes. In most regions, the stated minimum wage is a gross figure that includes mandatory employee contributions for social insurance and housing funds.
However, in major cities like Shanghai and Beijing, the minimum wage is a net figure, with those deductions made separately. This means the take-home pay for a minimum-wage worker in those cities is higher than a direct comparison would suggest.
Anhui province has previously clarified this distinction. In 2023, it reported its top-tier minimum wage at 2,060 yuan ($284), but noted that this figure included personal deductions.
Even so, a significant gap remains between minimum wages and the minimum base for calculating social-security payments. In provinces including Tibet, Yunnan, and Shandong, the minimum contribution base is more than double the local minimum wage, according to a Caixin analysis. In Tibet, it is 3.3 times higher. This means that even as wages rise, the cost for low-income workers to participate in the state-run social security system remains a heavy burden.
Contact editor Lu Zhenhua (zhenhualu@caixin.com)
caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.
Image: Hyejin Kang – stock.adobe.com