Expat and Local Wages in China in 2022

Wages in China are a big concern and a big draw for many foreigners and for many foreign businesses, too. The cost of labor will be a big part of many expenses no matter how long your company has been operating in China or how new it is. It's a good idea to learn about Chinese labor laws and the state of the market in 2022 and beyond.

Since the early 1980s, China has opened up and grown its economy very quickly. Because there was so much cheap labor available, this helped the country move forward. The phrase "the world's factory" was a good one. Companies and investors were drawn to the low-cost manufacturing possibilities.

This has changed in the last decade. Economy: The strengths of China have moved away from low-cost manufacturing and toward high-tech manufacturing and service industries, which are becoming more important to the country. To inbound investors, a rapidly rising domestic market has become more important than cheap labor. The cost of living in the country has also gone up because of these changes. Wages have also gone up because of this.

Even today, wages are rising at a slower rate than the country's GDP. Prices keep going up and skills and education keep getting better. The economy is still growing, so people are getting better at their jobs and getting better at school. These big differences between cities and regions are expected to get smaller over time. The government is focusing a lot on reducing poverty in rural areas right now.

Employment and labor law in China

Since the 1980s, China has made a lot of changes to its laws and economic rules. Employment and labor are currently regulated by two main types of law. People sometimes call the 1995 Labor Law and the 2008 Labor Contract Law (also called "Employment Contract Law") "Employment Contract Law." They were changed in 2012. Together, these laws set out the main rules for jobs, contracts, termination, wages, and more.

Some of the main things these laws cover are:

Contract: All employees must have a written agreement with their employer that lays out what they do, where they work, how much they get paid, when they can take time off, and more.

A standard 40-hour work week, with overtime restrictions and higher pay for those who work extra.

Wages must be paid and can't be put off.

It should be paid for time off for statutory holidays, marriage or funeral leave; it should also be paid for time off from work.

The rules for ending a contract, like how much severance pay you get, are set out.

It is not easy to find work in China.

The new laws in 2008 made it more common for businesses to offer contracts or flexible work to avoid some of the new rules. Efforts have been made by the government to control this, but in difficult labor markets, many employees are left with unsatisfactory temporary arrangements.

In light of such challenges, the Interim Provision on Labor Dispatch (2012) and the 2014 amendments to the Labor Contract Law were introduced in an attempt to protect and manage temporary workers.

There are still challenges for employees and employers, however, China is striving toward fair employment laws; between protections of the workers and a competitive business environment for the employers which are supported by two main vehicles to hire staff in China, employment solutions, and company formation.

Wages must be set in China.

Minimum wages are set across China, and these are controlled by the local government. Each province sets a minimum hourly (for part-time workers) and monthly minimum wages appropriate to that province. There are still large differences in living costs in China (certainly between but also within provinces), and this differential wage setting is likely to continue.

So, what is the minimum wage in China?

These minimums for each region are different and are changed by the local government every year. As of January 2022, the level in the city of Shanghai is 2,420 RMB per month (and 20RMB per hour). Because of this, they can be as low as 1,120 in Liaoning and 1,300 in Sichuan.