China’s financial hub of Shanghai joined Beijing and Shenzhen in boosting the minimum wage this year as policy makers seek to spur consumer spending and a shrinking labor surplus pushes up salaries.
The nation’s most affluent city will increase the wage by 13 percent to 1,450 yuan ($230) a month starting in April, the Shanghai human resources and social security bureau said in a statement on its website today. It’s the 19th adjustment since the city’s minimum wage rule was established in 1993, according to the statement.
Policy makers in the world’s second-biggest economy are trying both to keep inflation in check and shift the nation’s economic growth toward domestic demand. Promoting consumption by raising wages would facilitate such a transition, said Tim Condon, chief Asia economist at ING Financial Markets in Singapore.
Increased company profits over the past decade “means producers have the wherewithal to increase salaries,” Condon said.