Wages in Beijing 81% above national average: Bank survey

~~SINGAPORE - Workers in Beijing are paid 81% more than the national average wage, according to ANZ Bank’s Greater China Economic Update. The bank found that provinces like Gansu and Yunnan paid less, but there is evidence that the less affluent provinces will experience more rapid wage growth.

Workers in private enterprises in Gansu received an average pay rise of 25% in 2012, and were followed by Shanxi, Guangxi, Fujian and Shaanxi. China’s Xi administration has a policy of orderly fair income distribution, to reduce social inequity by 2020. Chinese wages have risen an average 14% a year over the past decade, and will continue to grow at least until 2020.

ANZ found that faster wage growth occurred in the State-owned sector. While foreign-funded entities are required to pay a 15% premium to their staff, the bank put average annual wages paid by foreign firms at RMB55,888 in 2012, compared with RMB48,357 by State-owned enterprises.

The research found that apparent wage levels of the more developed Chinese provinces and cities are much higher than those of the less affluent provinces. 

Wage growth in Shanghai was “only 10.4%” between 2009 and 2012. “We believe it is a sampling issue because the official data also showed the private sector in Shanghai was paid less (RMB28,898) than average (RMB78,673). We are unclear whether this wage level represents the reality in Shanghai,” says the report.

By comparison, Jiangxi saw the highest rise in minimum wages of 41% in 2013. Shenzhen and Shanghai topped the league in terms of minimum wage, although the level of RMB1,500 per month can barely cover the cost of living in those cities, according to the bank.

ANZ’s senior economist, Raymond Yeung, wrote: “The study is only a high level analysis based on national statistics. We hope it will help inform the decision-making of potential foreign investors. Specific industries and provinces should be faced with their unique labour market conditions and talent profiles, requiring deep analyses by human resource expertise. www.live.anz.com (ATI).