Both the City of Shanghai and Beijing are going to raise the minimum wage by 15% and 10% respectively on April 1.
The Province of Jiangsu is also announced that it will raise the minimum wage. The Provinces of Zhejiang and Sichuan as well as the cities of Chongqing, Guangzhou and Dongguan are also considering an increase.
The minimum wage in Beijing will rise from US$117 a month to roughly US $128 a month.
The main reason for the increase is to help residents cope with the rising cost of housing.
Shanghai has the most expensive housing prices in China. “Shanghai’s property prices are too high. It has undermined the basic interests of the public,” said the Mayor of Shanghai.
This is really a positive for companies that provide basic consumer staples such as American Dairy (ADY), Nepstar (NPD), Zhongping (HOGS), China Mobile (CHL).
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A broker in town here told me the problem with Chinese stocks is that they are split in two - the Chinese portion which receive priority and then the foreign which are paid out after the Chinese portion???????????