China sets target of average 13 percent annual minimum wage rise

The annual average growth of China's minimum wages should be at least 13 percent in the five years to 2015, according to a government job market plan for the period published on Wednesday.

Raising pay is key to the jobs blueprint, part of Beijing's 12th five-year economic plan, which aims to boost employment in the world's No.2 economy.

Minimum wages in China range from 1,500 yuan ($240) per month in Shenzhen to 870 yuan in Chongqing. The government wants minimum wages to be 40 percent of average local salaries by 2015, according to the plan posted on its website (www.gov.cn).

Labour shortages are a problem in China's main export manufacturing bases, requiring millions of migrant laborers to fill the gaps. But the government said it expected pressure from an overall labor oversupply to increase in coming years.

"Every year there are 25 million urban residents needing jobs and there are still significant amounts of excess rural labor needing to find jobs," the plan said.

The Chinese government has always been sensitive to employment due to concerns about social unrest, and Beijing, which did not recognize the existence of unemployment until the late 1990s, does not publish a national jobless rate.

The only official jobless rate complied by the labor ministry covers permanent urban residents and the quarterly indicator is widely regarded by investment bank economists as irrelevant.

"All levels of governments making fiscal, financial and industrial policies must consider the impacts on employment and pay close attention to unemployment risks," the plan said.

Demographic data from China's statistics agency shows that the Chinese population is ageing quickly and the rural labor pool shrinking, which many economists cite as the fundamental reason for the sharp wage rises in recent years.

The average monthly wage of China's 158 million migrant workers in 2011 surged 21.2 percent from 2010 to 2,049 yuan.

In the five-year period from 2006 to 2010, the average minimum wage in China increased 12.5 percent per year, official data showed.

($1 = 6.3049 yuan)

[Source: Reuters, Beijing, 08Feb12]

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