China, the world’s most populous country and a global economic powerhouse, is a hub for outsourcing and business opportunities. Understanding the average salary in China is crucial for businesses looking to tap into this market.
As of 2023, The average salary in China is about 29,400 CNY per month, which translates to approximately 4102 USD. This Chinese average salary is very much lower than that of the developed countries like the US and the UK.
In this comprehensive blog, we will discuss the statistics and trends surrounding the average salary in China, factors affecting these salaries, legal provisions for employment and wages, and the top three industries to consider when outsourcing to China.
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Statistics and Trends Around China’s Average Salary
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What is the Average Salary in China?
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A. Average Salary
The average salary in China tells a unique story, impacted greatly by various factors such as geographical location, field of work, and specific job responsibilities. As of 2023, a typical employee in China earns about 29,400 CNY per month (4102 USD), which annualizes to approximately 353,000 CNY (49252.15 USD). However, this figure varies widely, with the lowest average salary around 7,410 CNY and the highest average reaching up to 131,000 CNY monthly.
This variation highlights the economic diversity within China. Thriving metropolises such as Beijing, Shanghai, and Guangzhou boast higher salaries in comparison to other areas, demonstrating the dynamic growth and expense of living within these bustling cities.
When looking at the global landscape, it becomes evident that China’s average salary numbers fall short of those seen in more advanced economies, such as the United States and Japan.
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B. Median Salary
The most recent data reveals that the median salary in China is 26,900 CNY per month, making it a key indicator of the country’s economic landscape. This figure signifies that half of the population earns less than this amount, while the other half earns more, highlighting the uneven distribution of income within the workforce.
This disparity between the median and average salaries can be attributed to several factors, such as differences in living costs across cities, the level of industrialization, and the overall economic climate of each region.
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C. Maximum and Minimum Salary Range
The salary range in China displays a considerable gap, ranging from 7,410 CNY as the lowest average salary to a maximum average salary of about 131,000 CNY per month. This clearly highlights the considerable disparity of income among different job positions, industries, and regions within the country. The actual maximum salary is higher than the maximum average salary.Â
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D. Legally Mandated Minimum Wage
The lowest legally acceptable salary that employers can pay their workers is known as the minimum wage. This serves as a baseline, preventing workers from being underpaid for their labour.Â
However, China does not have a uniform minimum wage for the entire nation due to varying standards of living across different regions. This responsibility falls on the local governments, who must consider the specific circumstances of their respective provinces, municipalities, or regions when determining their own minimum wage.Â
As of February 21, 2023, Shanghai boasts the highest monthly minimum wage at 2,590 RMB and Beijing has the highest hourly wage at 25.3 RMB. In contrast, Liaoning has the lowest monthly minimum wage at 1,420 RMB and Heilongjiang has the lowest hourly rate.
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Note: Renminbi (RMB) is the official currency name of China. However, the Renminbi (RMB) and Chinese Yuan (CNY) are the same and these are interchangeable terms, Chinese Yuan (CNY) is the popular, international name for the money.
2. Factors Affecting Average Salary
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A. Average Salary by Sector
In China, the average salary greatly fluctuates among various industries. For instance, lucrative sectors like banking, energy, and information technology typically provide better pay raises, indicative of the high demand for proficient workers in these areas.
| Sector | Average Salary/Year |
|---|---|
|
Accounting and Finance |
365,000 CNY |
|
Construction / Building / Installation |
218,000 CNY |
|
Customer Service |
254,000 CNY |
|
Engineering |
298,000 CNY |
|
Health and Medical |
524,000 CNY |
|
Human Resources |
339,000 CNY |
|
Information Technology |
362,000 CNY |
Source:Â SalaryExplorer.com
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B. Average Salary by City
| City | Average Salary/Yea |
|---|---|
|
Yantai |
539,175 Yuan
|
|
Suzhou |
420,389 Yuan
|
|
Keelung |
414,894 Yuan
|
|
Shanghai |
369,304 Yuan
|
|
Chengdu |
367,128 Yuan
|
|
Tianjin |
364,951 Yuan
|
|
Changzhou |
348,388 Yuan
|
|
Shenzhen |
317,347 Yuan
|
|
Luoyang |
313,020 Yuan
|
|
Dalian |
307,344 Yuan |
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C. Average Salary by Education
The average salary change based on education is not a fixed number and varies significantly across different locations. However, the data presented here represents the overall average of multiple job positions.
For example, in Shanghai, the average salary for an ESL teacher (English as a Second Language) stands at 15,952 Yuan.
Furthermore, employees with a diploma certificate tend to earn 17% more compared to those who just completed high school.
Similarly, employees with a Bachelor’s degree earn 24% more than those with a diploma.
Interestingly, the gap widens even more for professionals with a Master’s degree, with a 29% higher salary than those with a Bachelor’s degree.
And for Chinese employees with a Ph.D., their income can increase by a significant 23% compared to someone with a Master’s degree.
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D. Average Salary by Experience
One’s salary is heavily influenced by their level of experience, as having more experience often leads to higher wages.
In China, it is common for employees with two to five years of experience to earn an average of 32% more than entry-level and junior workers across all industries.
For those with over five years of experience, this gap widens even further with an average of 36% higher earnings.
As one’s career progresses, salaries also increase with a 21% raise after ten years of work and an additional 14% increase for those who have been in the workforce for over 15 years.
While these numbers provide a general idea, it is important to consider specific job titles for a more accurate assessment.
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Annual Average Salary Increase in China
a. Average Annual Increase by Industry
Salary raises in China differ between various industries. The banking sector, for example, typically enjoys an average yearly increase of 8%, while the construction industry experiences a lower rate of 3% according to SalaryExplorer.
b. Average Annual Increase by Experience Level
Additionally, an employee’s level of experience also has an impact on their salary increase. Junior employees can typically expect a raise of 3-5%, while those in higher management positions may see a larger increase of 15-20% in their annual salary.
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Legal Provisions for Employment and Wages in China
China’s labour laws, embodied in the Labor Law of 1995 and the Labor Contract Law of 2008 (updated in 2013), lay the groundwork for regulating employment, salaries, and worker protections. Prominent elements of these laws encompass:
1. Employment Contracts: When it comes to employment contracts, maintaining open and fair labour practices is crucial. That’s why employers must adhere to the requirement of drafting written agreements with their employees.
These contracts should outline important details such as work terms, compensation, workplace location, and safety protocols. By establishing clear terms, both parties can engage in a positive and transparent working relationship, ensuring the protection of workers’ rights.
2. Working Hours and Overtime: In China, the average workweek consists of 40 hours and includes two days off for employees. To uphold fair compensation for employees, any hours worked beyond this standard must be compensated at specific rates, such as 150% for workdays, 200% for days off, and 300% for national holidays. This practice ensures that hard-working employees receive the recognition they deserve for putting in extra effort.
3. Wage Payment: Ensuring timely and consistent income for employees, it is mandated that salaries be paid every month with no unjustified delays or withholding of wages.
4. Mandatory Leaves: Employees are entitled to paid leaves during statutory holidays, marriages, and funerals, reflecting respect for personal and cultural needs.
5. Contract Termination Compensation: When a contract ends and an employee loses their job, they should receive compensation based on their length of service. This helps to provide a safety net for those who may find themselves without employment.
In China, strict legal guidelines have been put in place to uphold labour rights and foster a fair and ethical work environment. This serves as a testament to China’s dedication to promoting fair employment practices. Any businesses operating in China or considering outsourcing must adhere to these regulations to comply with Chinese labour laws and uphold a high standard of ethical labour practices.
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Top 3 Industries to Outsource to China
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1. Manufacturing/Production
China is well-known for its highly efficient manufacturing industry, attracting countless multinational corporations to outsource their production there.
The average hourly wage for factory workers is significantly lower than in developed countries. As an example, the average hourly wage for factory workers in 2018 was only about USD 5.51.
This combination of affordability and China’s vast manufacturing capacity makes it a prime destination for global businesses seeking to cut down on production expenses without compromising on quality.
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2. Software Development/IT
China’s vibrant startup ecosystem and ample supply of tech graduates make it a prime location for software development and IT outsourcing.
Software developers in China can expect a salary of 189,000 to 357,000Â Yuan per year, making it an attractive and cost-effective option for companies seeking top-notch development services. This impressive industry is fueled by China’s emphasis on tech education and its vast pool of skilled professionals.
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3. Customer Service
One area where China excels is in outsourcing customer service, specifically for those who speak Mandarin or Cantonese. The average annual salary for call centre agents in China is only USD 31,283, making it a cost-effective option compared to many Western countries. This, combined with language proficiency in Mandarin and Cantonese, makes China an advantageous choice for businesses seeking quality customer support in these languages.
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Key Benefits of Outsourcing to China
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1. Skilled Talent Pool:Â
China’s skilled talent pool is a major attraction for companies looking to outsource. With a vast array of technicians and engineers, this valuable resource is enriched by graduates from top Chinese and global universities, delivering a wide range of expertise and abilities. Employers reap the benefits of this top-notch workforce, equipped to handle complex tasks in manufacturing, software development, and customer service.
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2. Government Support:
The outsourcing industry in China receives extensive backing from the government, which offers various incentives including tax rebates and infrastructure enhancements. These beneficial policies make China even more alluring for outsourcing, as they reduce operational expenses and improve the overall business atmosphere for international corporations.
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3. Access to Vast Consumer Base
One of the biggest advantages of expanding into China is its large and thriving consumer market, as well as its close proximity to other major markets in Asia. Partnering with China through outsourcing presents endless possibilities for businesses to grow and connect with customers in the region. This strategic move can prove to be highly beneficial for companies looking to reach new heights and expand their global reach.
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4. Robust Infrastructure
China’s advanced infrastructure is a vital advantage for outsourcing, as it enables smooth operations in areas like manufacturing, IT development, and customer service. This leads to increased productivity and operational excellence. From supply chain management to technology implementation, this infrastructure facilitates seamless business operations.
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Conclusion
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As China’s economy continues to evolve, it offers a wealth of both promise and potential roadblocks for companies seeking to outsource. With its vast array of skilled workers, government incentives, and top-notch infrastructure, China remains a prime choice for industries such as manufacturing, IT, and customer service.
Yet, navigating China’s complex salary market can be a challenge, influenced by factors like location, experience, education, and industry. As the country’s role in the global outsourcing landscape grows, businesses must carefully evaluate the advantages and potential obstacles before committing to outsourcing.
Fortunately, resources like Time Champ can help streamline the management of a remote workforce, giving companies the edge they need to succeed in outsourcing to China.
Frequently Asked Questions
 The average salary in China is around 29,400 CNY per month. This figure varies significantly based on factors such as location, industry, and job role, with major cities like Beijing, Shanghai, and Guangzhou offering higher wages.
A good salary in China typically exceeds the median salary of 26,900 CNY per month. It varies depending on the city’s cost of living and individual needs.
 The basic salary, or minimum wage, in China, varies regionally, influenced by the local cost of living and labour market conditions. For example, Shanghai offers one of the highest minimum wages
The minimum wage in China is set by local governments and differs across regions.Â
As of February 21, 2023, Shanghai boasts the highest monthly minimum wage at 2,590 RMB and Beijing has the highest hourly wage at 25.3 RMB. In contrast, Liaoning has the lowest monthly minimum wage at 1,420 RMB and Heilongjiang has the lowest hourly rate.
 The top outsourced industries in China are manufacturing/production, software development/IT, and customer service, due to the country’s cost-effective labor, skilled workforce, and developed infrastructure.
Key benefits include access to a skilled talent pool, government support through tax rebates and infrastructure improvements, a vast consumer base, and robust infrastructure supporting efficient operations.
 China’s Labor Law and Labor Contract Law provide comprehensive regulations on employment contracts, working hours, overtime, wage payment, mandatory leaves, and contract termination compensation, ensuring fair labor practices.
Yes, with its vibrant startup ecosystem and numerous tech graduates, China offers competitive opportunities for IT outsourcing, particularly in software development, at attractive salary levels for skilled developers. But, one should also consider the challenges of outsourcing in China.