China province raises minimum wage by 23%

image captionAuthorities say they expect China's average minimum wage to grow at least 13% annually

Sichuan province in southwest China has increased the minimum wage sharply to try and attract workers amid a rapidly rising cost of living.

Sichuan raised the minimum monthly wage by 23.4% starting on 1 January, state news agency Xinhua said on Thursday.

That is one of the biggest increases, with most other provinces raising wages in line with government advice of 13%.

Severe labour shortages in Chinese cities have prompted wage rises in many provinces this year and last.

Sichuan province is a major source of migrant workers for cities across China, in particular for the eastern coastal manufacturing centres.

Minimum monthly salaries in Sichuan will rise to between 800 yuan and 1,050 yuan ($130-$170; £80 -£100) according to the sector, the provincial human resources and social security office said.

In the major industrial city of Shenzhen, in the export province of Guangdong, Xinhua reported that the minimum wage would rise by 15%.

Rising wages have prompted analysts to predict that China, previously known for its low cost of labour, could lose its edge as a manufacturing hub.

Manufacturers could look to countries such as Vietnam, Bangladesh and Cambodia where wages are still low.

However, Chinese authorities have been trying to boost domestic consumption and be less export dependent, and a rise in wages will encourage spending.

Xinhua said 21 Chinese provinces, autonomous regions and municipalities have raised minimum monthly wages by nearly 22% this year.

Authorities have said that they expect China's average minimum wage to grow at least 13% annually over the next five years.

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