China orders rise in minimum wage rates

17 June 2010

17 June 2010 | Andy Allen

The Chinese government is to raise the minimum wage in key manufacturing areas.

In Guangdong province, the minimum wage will increase by 10 per cent to 1,100 yuan per month (around £110) from 1,000 yuan (£100).

The province is home to the city of Shenzhen, a manufacturing powerhouse. It is also the province where recent protests and strikes have hit factories belonging to Taiwanese IT supplier Foxconn and Japanese auto manufacturer Honda.

The minimum wage in Beijing will rise by 20 per cent to 960 yuan (£95) a month from 800 yuan (£80) from 1 July.

The Chinese government did not give a reason for the move, merely saying it “follows a series of pay rises around China”. However, it is believed the rises were linked to China’s desire to stimulate internal demand through increased domestic spending power.  

Chinese state news agency Xinhua said the “arrogance” of management at Honda’s plants had contributed to the recent strikes.

“Its inexpensive labour force has become one of the major factors in China attracting overseas investment,” said Xinhua. “However, behind the glory there exists mounting complaints and discontent of Chinese workers.”

The Chinese authorities, who normally ban independent industrial action, let recent strikes and protests go ahead.

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