Shanghai Raises Minimum Wage 14%

Local authorities across China have been raising minimum wages to help boost domestic consumption and relieve pressure on households struggling to keep up with rising food and property prices.

At a time when the country's leaders struggle to control inflation, and it tries to ease the impact of high prices on the poor, Shanghai said on March 2 that it would raise the minimum wage 14%.

The increase, due to take effect in April, will see the minimum monthly wage jump to 1,280 yuan ($194) from 1,120 yuan, the municipal government said.

Local authorities across China have been raising minimum wages to help boost domestic consumption and relieve pressure on households struggling to keep up with rising food and property prices.

Guangdong, China's main export region in the south, has raised minimum wages by an average 18.6% starting from March, marking its second hike in less than a year.

The official Xinhua news agency said on March 1 more provinces would make similar moves this year, with double-digit increases expected in Jilin province in the northeast and impoverished Ningxia in the north.

But higher incomes also help fuel inflation, which topped 5% in November for the first time in more than two years and are now at 4.9%, well above the government's target ceiling.

Ever fearful of inflation's historical potential to spark social unrest, authorities have already pulled on a variety of levers to try to rein in consumer prices and tame the red-hot real estate sector. The government is especially keen to keep prices down as it seeks to avoid the kind of unrest seen across the Middle East and North Africa that has resulted in the ouster of two long-term despots.

China's inflation hit 4.9% in January, up from 4.6% in December and well up from its full-year target of 4%.

Copyright Agence France-Presse, 2011

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