Beijing Leads the Charge for Wage Growth

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Chinese' wages are higher than they have ever been.
May 29, 2025
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China’s General Office of the CPC Central Committee and the State Council has jointly issued a document calling for reasonable wage growth. This isn’t the first time a top-level policy document has mentioned “wage growth.” At the beginning of this year, the State Council executive meeting emphasized the need to “vigorously support household income growth and promote the reasonable increase of wage income.” A later policy document aimed at boosting consumption went even further, placing the “urban and rural income growth initiative” at the top of a wide array of policy measures. So what does the repeated mention of “wage increases” within a single year actually signal?

I. Why Keep Emphasizing Wage Growth?
Consumption is a function of income. Without income growth as the fundamental driver, there’s no real starting point for boosting consumption or stimulating domestic demand. One notable shift this year is that policy documents—from the central government down to local levels—have stopped focusing solely on issuing coupons or subsidies and are instead prioritizing income growth.

However, the significance of wage increases goes beyond mere consumption. It’s about shaping expectations and breaking out of the deflationary cycle. As long as income continues to grow, people will have growth expectations for the future, and that naturally boosts willingness to spend and keeps the production-consumption loop flowing.

In China, wage income accounts for about 60% of total household income and is the sole income source for the vast majority of people. Therefore, promoting “reasonable wage growth” holds a unique and irreplaceable priority in policymaking.

The logic is simple—everyone wants a raise—but wage increases obviously aren’t just a matter of will. Income levels are closely tied to the broader economic climate and to business performance. Still, this doesn’t mean policy is powerless.

The current policy consensus is: “Curb the top, expand the middle, lift the bottom”—in other words, limit excessive incomes among high earners, grow the size of the middle-income group, and raise the earnings of low-income earners. This year, many regions have raised their minimum wage. Shanghai’s went from 2,590 to 2,690 yuan, while underdeveloped Qinghai province saw a jump from 1,880 to 2,080 yuan—an increase of 10.6%. For the middle class, wage growth depends more on macroeconomic and sectoral trends, while policy can focus on stabilizing employment and sustaining growth. Many provinces and cities have also issued wage guidance lines, suggesting increases between 3% and 9%, with some regions even removing upper limits.

However, as the name implies, these are only guidelines, with no binding force. That said, reducing burdens is also a form of income growth, and pension payouts likewise count as “income.” For example, rural pensions, middle-class birth subsidies, and making early childhood education free all constitute meaningful forms of “income increase.” Promoting reasonable wage growth therefore requires a comprehensive approach—focused not just on economic expansion, but also on income growth policies, burden reduction, and targeted transfer payments.

II. Stabilizing The Housing and Stock Markets
For most people, income comes from two major sources: wages and property income. And real estate and the stock market are the two biggest property channels. Rising home and stock prices bring a clear wealth effect—when assets appreciate, people are more inclined to spend.

When it comes to property income, there’s a saying: “Real estate in China is like stocks in the U.S.” In China, about 70% of household assets are tied up in real estate. In contrast, American and European households hold a much larger share of their wealth in stocks, mutual funds, and other financial instruments. Even though property income only makes up about 8% of total household income in China—far below the 15% to 20% range in Western countries—there’s still room to grow. That’s why, beyond wage growth, expanding property income channels has become crucial. It also explains why major policy meetings have increasingly emphasized “stabilizing the housing and stock markets.”

We used to hear more about stabilizing the housing market—but why is the stock market now getting equal priority? In the past, real estate prices soared, and despite the strain on household finances (the so-called “six wallets” effect-the idea that the purchase of a piece of real estate drains wealth accumulated by all members of the entire family), the wealth effect was real and did boost consumption. But now, as the wealth effect from real estate fades and price volatility even starts to undermine income expectations, the underutilized stock market is expected to step in and fill the gap.

What’s more, the stock market is widely seen as a barometer of the economy—closely tied to public expectations and confidence. The more critical the moment, the more urgent the need for a bull market to reverse sentiment. Whether to reshape expectations, shore up confidence, or create stronger wealth effects and raise household incomes, a larger and more robust stock market has become essential.

III. What’s The Actual State of Wages Across China’s Various Industries?
Just last week, China’s National Bureau of Statistics released new data on average wages for urban employees in 2024. According to the figures, the average annual wage for employees at urban non-private employers was 124,000 yuan, while private sector employees averaged 69,000 yuan. On a monthly basis, that translates to over 10,000 yuan for the former and about 5,700 yuan for the latter—a near twofold gap.

The reason for this disparity is that “urban non-private employers” include, but are not limited to, government-affiliated jobs. They encompass state-owned enterprises, collective organizations, shareholding firms, and even foreign-funded companies—essentially, larger and more stable employers. In contrast, private-sector jobs are largely concentrated in small and medium-sized enterprises, which are more vulnerable to macroeconomic swings.

Looking at industry-level breakdowns, wage disparities are stark—across non-private urban employers, the gap between the highest- and lowest-paying industries is nearly fourfold. The top three industries in terms of average wage are information technology, finance, and scientific research services, with the highest reaching 239,000 yuan annually. The bottom three are accommodation and food services, agriculture/forestry/fisheries, and water/environment-related industries, with wages as low as 60,000 yuan.

One key point: these are pre-tax wages, not accounting for social insurance or housing fund deductions, and they’re averages, not medians, which better reflect the typical experience.

Also, this data only covers employed personnel in registered entities—individual entrepreneurs and gig workers aren’t counted. In any case, the fundamentals vary greatly across sectors, and industries are hit differently by external forces. Wage growth, therefore, is a systemic project—it needs multi-pronged efforts and, above all, economic growth as its ultimate support.

Editor: Zhiyu Wang

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An information platform focused on technology and innovation.
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Top picks selected by the China Academy's editorial team from Chinese media, translated and edited to provide better insights into contemporary China.
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