The minimum wage in China's capital city will go up by 21 percent next year, state media said on Monday, a sign that labour costs in the world's second-largest economy are on track to rise strongly again in 2011. Beijing will lift the floor for wages by 200 yuan to 1,160 yuan ($175) a month from January 1, following a 20 percent increase just six months earlier, the official Xinhua news agency reported.
Cities and provinces throughout the country have steadily increased minimum wages over the past decade, but the gains have picked up momentum in the last year. With China's economic boom spreading more deeply into the hinterland and its once-seemingly infinite labour pool growing more slowly, different regions have been thrown into competition for increasingly scarce workers.
Beijing city will also increase pension payments for retired workers by 10.2 percent to 2,268 yuan per month, Xinhua said. China's top leadership has repeatedly pledged that it will increase labour's share of national income as part of efforts to stimulate greater consumption. Rising wages are adding to inflationary pressure, but productivity has been rising faster in most industries and labour costs remain far lower than in developed economies.
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