China's minimum wages to increase

The Chinese cabinet is promising to raise minimum wages by 13 per cent a year until 2015, as the country's leaders face growing pressure to spread the country's prosperity more widely.
The Chinese leadership is under pressure to deal with the widening income gap between workers such as these migrant labourers, shown in August living in a tent near Hefei, and the more affluent elite. (STR/AFP/Getty)

The Chinese cabinet is promising to raise minimum wages by 13 per cent a year until 2015, as the country’s leaders face growing pressure to spread the country’s prosperity more widely.

The government also pledged Wednesday to launch initiatives to create 45 million jobs.

It froze wages after the 2008 global financial crisis in an effort to help companies stay afloat as the plunge in global demand wiped out tens of millions of jobs in manufacturing and other export-linked industries.

The minimum wage in China ranges from the equivalent of $200 a month in cities like Shanghai and Beijing to the equivalent of $100 a month in the country's poorest provinces.

But it has hiked minimum pay in many areas over the past two years following protests by workers.

Communist leaders have been confronted by a widening gap between a wealthy elite and the poor majority.

Wednesday's announcement also promised tax breaks and loans for small employers and for jobless workers who want to start their own businesses.

25 million need jobs

The government said 25 million urban workers need to find jobs each year and millions of people in the countryside are moving from farm work to other employment.

It covered the period of the Communist Party's five-year development plan that took effect last year.

Many laid-off workers found new jobs in projects financed by the government's stimulus spending in 2008 but the urgency of generating employment increased as the impact of the spending faded.

Entrepreneurs were also hit hard by credit curbs imposed to cool China's overheated economy while the bulk of stimulus money flowed to state-owned construction and other companies.

Thousands of private companies were driven into bankruptcy and the survivors cut payrolls, raising the threat of unrest.

The latest initiatives are part efforts to revive growth in the private sector that creates most of China's new jobs and wealth. Last week, Beijing announced the creation of a $2.5 billion fund to finance start-up companies.

With files from The Associated Press