Wages in China in 2024: expanding inequalities and slowing down wage growth

chiny24.com 3 months ago

In 2024 China continued to face the economical slowdown, resulting in wage increases. According to data published by the National Statistical Office of China (NBS), the average yearly wage of urban workers increased, but the pace of this increase was slower than in erstwhile years. At the same time, there was a clear gap between the private and public sectors, as well as between different professional groups.

Average wages in China in 2024

1. Public and private sector breakdown

According to NBS data, the average yearly wage of employees in non-private sector (including in state enterprises, government institutions and large companies) 124 110 yuan (approx. 17 220 USD), which means an increase by 2.8% compared to 2023.

W private sector, where the majority of Chinese employees are employed, the average wage was 69 476 yuan (about 9 640 USD), which represents an increase only by 1.7%.

This means that Public sector workers averaged 78% more than those in the private sector. This imbalance has persisted for years and is 1 of the main sources of social inequality in China.

2. Wages in enterprises above a certain scale

Companies ‘over a certain scale’ (i.e. large companies gathering certain income criteria) offered average remuneration at the level of 102 452 yuan (approx. 14 215 USD), which represents an increase by 4.4% compared to the erstwhile year.

In this group, they made the most money:

Senior management: 203 014 yuan (approx. 28 169 USD)
Specialists and technicians: 148 046 yuan (approx. USD 20 542)
Administrative staff: 93 189 yuan (approx. $12,930)
Service staff: 77,584 yuan (approx. USD 10,765)
Production workers: 78,561 yuan (about USD 10,901)

Apparently, the difference between the earnings of the management staff and the production workers was as much as 2.6 times, which shows a strong income differentiation in Chinese companies.

Regional pay gap

China is simply a country with immense regional disparities, as is besides seen in wage data:

1. Non-private sector

Eastern China (including Beijing, Shanghai, Guangdong): 143,712 yuan
Central China: 98,090 yuan
Western China: 110 376 yuan
North-East China (so-called ‘old industrial centres’): 98 889 yuan

2. Private sector

Eastern China: 77 585 yuan
Central China: 57 363 yuan
Western China: 60 047 yuan
North-East China: 53 058 yuan

The difference between the east and northeastern regions in the private sector was as much as 46%, which shows how much economical improvement is concentrated in richer coastal provinces.

Industry with highest and lowest wages

Top 5 best paid industries (non-private sector)

IT and IT: 238,966 yuan
Finance: 201 883 yuan
Scientific and method research: 175 425 yuan
Energy: 150 285 yuan
Mining: 140 706 yuan

5 worst paid industries (non-private sector)

Residential and repair services: 68 159 yuan
Management of water resources and the environment: 68 315 yuan
Agriculture: 67 475 yuan
Hotels and gastronomy: 60 240 yuan
Culture and entertainment: 126 040 yuan (although higher than in another groups, decreased by 1%)

In the private sector, the highest wages were in IT (123 193 yuan) and finance (135 339 yuan), at the lowest – in Agriculture (46 433 yuan) and municipal services (49 007 yuan).

Why is rising wages slowing down?

Economic slowdown “China faces lower GDP growth, a real property crisis and a fall in exports.
Over-work – In any sectors (e.g. production) competition for jobs keeps wages low.
Company savings policy – Many companies reduce labour costs due to lower profits.
Structural inequalities – The public sector and large companies proceed to dominate wages, while smaller private companies offer importantly lower wages.

Consequences for society and the economy

Growing Social Discontent – Young people, especially university graduates, are increasingly having difficulty uncovering a well-paid job.
Internal migration – Workers from poorer regions proceed to decision massively to large cities in the east.
Consumption decreased – Slower wage growth can reduce household spending, which in turn will slow economical growth.
Challenges for Authorities "The government will gotta find ways to reduce inequalities, e.g. through taxation reforms and private sector support.

In 2024 Chinese wages grew, but at a slower rate than in erstwhile years. The biggest salaries are inactive concentrated in the public sector, large companies and richer regions, while private sector workers and inland provinces gain much less.

If China wants to keep social and economical stability, they will gotta find ways to reduce these inequalities. Otherwise rising income fragmentation can become a serious problem in the coming years.

Will the wage situation in China improve? Much depends on whether the government undertakes effective reforms and whether the economy regains momentum. For now, however, inequalities stay 1 of the biggest challenges for Beijing.

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