China raises civil servants' salaries for the first time in 10 years

(CLO) Millions of Chinese civil servants were announced to receive a pay raise this week. This decision is expected to help increase consumer spending and contribute to economic growth.

The last time China publicly announced a nationwide pay rise for civil servants was in 2015, when the government increased local officials' salaries by more than 30% as part of efforts to fight corruption and boost consumer purchasing power.

Illustration: GI

According to information gathered by Reuters, the average monthly salary of civil servants increased by 500 yuan ($68.50). Some lower-level civil servants reported monthly increases of nearly 300 yuan ($41).

Beijing's strategy is aimed at stimulating consumers with higher spending power, according to Xu Tianchen, senior economist at the Economist Intelligence Unit.

Economic support policies focus on providing cash handouts to low-income earners and increasing wages for public employees. Low-income earners tend to consume more, while public employees, with higher social benefits, are also more likely to spend.

Beijing did not provide details of the move. It is unclear how the wage increase will be funded, how much it will cost, or what percentage it will be.

Last month, China agreed to run a budget deficit equivalent to 4% of gross domestic product (GDP) this year, Reuters reported.

The move is aimed at supporting the 5% economic growth target by 2025, despite major challenges such as the real estate crisis, price declines and trade tensions with the US.

Ha Trang (according to GI, Reuters)

Source: https://www.congluan.vn/trung-quoc-tang-luong-cho-cong-chuc-lan-dau-tien-sau-10-nam-post328838.html