China raises minimum wages amid drive to boost household spending
Most provinces increased pay for low-paid jobs in 2025, part of nationwide efforts to tackle deflationary pressures
“Consumption capacity is directly related to income distribution. If residents have sufficient income, they will be able to consume,” said the authors of a research note by Yuekai Securities on January 11.
“To fundamentally solve the issue of weak consumption, the key still lies in reforming [the] income distribution system.”
Hebei province in northern China recorded the largest increase, raising its minimum wage to 2,080 yuan (US$299) per month from 1,800 yuan – a 15.6 per cent rise since the start of 2025.
Fujian in southeastern China followed, raising it in January 2025 from 1,660 yuan per month to 1,895 yuan – a 14.2 per cent increase. Guizhou increased it to 1,890 yuan from the same level as Fujian, marking a 13.9 per cent rise.
Local governments in China set their own minimum wages, reflecting varied living standards across the country. The Ministry of Human Resources and Social Security typically updates and publishes data every three months, detailing the latest adjustments.
Shenzhen, a tech hub in Guangdong province, also raised its minimum wage to 2,520 yuan per month in 2025, up from 2,360 yuan. Beijing, the capital, increased it to 2,540 yuan per month from 2,420 yuan, while Shanghai, China’s financial centre, mandated a minimum wage of 2,740 yuan per month, up from 2,690 yuan.
Regions that did not raise the minimum wage over the past year include Shanxi province, the centrally administered city of Chongqing, its neighbouring Sichuan province, and the far-western autonomous region of Xinjiang.
At the tone-setting central economic work conference in December, Chinese leaders also announced plans to boost urban and rural incomes – a top priority this year.
According to a note by Guolian Minsheng Securities published in December, increasing the pay of low-income groups would provide a minimum social safety net and boost the capacity of households to consume.
“Steadily raising the basic wages of certain benchmark groups can strengthen the stabilising role of the income distribution system and enhance its guiding function,” the note’s authors said.
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On Monday, data released by the National Bureau of Statistics showed that China’s per capita disposable income had reached 43,377 yuan (US$6,229) in 2025, up 5 per cent year on year. Per capita income from wages alone rose 5.3 per cent year on year, to 24,555 yuan, accounting for 56.6 per cent of household disposable income – a slight increase from 56.5 per cent in 2024.
Among the mainland’s 31 provincial-level regions, Shanghai topped the list with an average annual per capita disposable income of nearly 92,000 yuan, followed by Beijing at more than 89,000 yuan. Zhejiang, Jiangsu, Tianjin, Guangdong and Fujian ranked third through seventh, while the remaining regions all reported annual per capita disposable incomes below 50,000 yuan.
As a result, private consumption as a share of GDP would “quite likely” increase further, said Nicholas Lardy, the note’s author and a non-resident senior fellow at PIIE. It could even approach the average of upper-middle-income countries, provided the “government follows through on the promised accelerated increase in pension benefits and other social expenditures” over the next five years, he added.