Know all the information regarding the statutory minimum wage rise in Shanghai from July 1, 2021

Employment Contract Conflicts With the New AZ Employee Rights

Shanghai will increase its statutory minimum wage from 2,480 yuan ($383) to 2,590 yuan per month from July 1, bringing it to one of the highest levels in the country, local authorities announced on Wednesday. The hourly minimum wage will increase from 22 yuan to 23 yuan, according to the municipal human resources and social security department.

The legal minimum wage is the lowest amount which employers may pay to employees for work performed within the legal standard working hours, or specific working hours in accordance with their employment contract.

 

According to South China Morning Post, concerns over rising costs and the trade war with the United States may be hastening the exit of firms from China, but that has not stopped four provincial-level administrations from raising their monthly minimum wage for local workers this year.

 

So far, in 2021, the provinces of Jiangxi, Heilongjiang, Shaanxi,  Xinjiang, and Tibet as well as the cities of Beijing and Tianjin have raised their minimum wage standards. Meanwhile, the province of Jilin and the city of Chengdu stated they would adjust their minimum wages this year.

 

Currently, Shanghai has the highest monthly minimum wage among 31 provinces (RMB 2,480/US$382 per month) and Beijing has the highest hourly minimum wage (RMB 25.3/US$3.9 per hour). Six regions – Shanghai, Guangdong, Beijing, Tianjin, Jiangsu, and Zhejiang – surpassed the RMB 2,000 (US$308) mark in their monthly minimum wage standards.

 

Shanghai will increase its statutory minimum wage from 2,480 yuan ($383) to 2,590 yuan per month from July 1, bringing it to one of the highest levels in the country, local authorities announced.

 

Shanghai, like Beijing, has updated the minimum wage in line with the high cost of living each year since 2015. Guangdong province and other prosperous regions update minimum wage levels less frequently. It is the first time the city has raised its statutory minimum wage since the outbreak of COVID-19.

 

Regional governments in China aim to find a balance between increasing wages for low earners and keeping business costs down.

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Stop your China Manufacturer Becoming your Competitor

chinese law firmIntellectual property protection is perhaps the most challenging issue in China for almost all the distributor agreements. In order to protect the IP of our American clients, we have come up with a “no registration” provision in our distributor agreements. According to this provision, our clients exclusively hold all the rights for trademarks and other IP and the distributors can’t claim any of these rights. Distributors will not be allowed to register any IP in any way related to our client’s IP. You need to register your trademarks immediately in China, that’s why we have kept the “further protect” term in our contract.

 

Because of China’s strong Anti-Monopoly law, a distributor has to sell goods to third parties at a minimum resale price. For this reason, our China distribution agreements should not require your Chinese distributor to sell your goods at a certain price.

 

Tips on selling high-value equipment to China-

In spite of making rapid economic progress, the mindset of the Chinese companies towards the purchase of foreign equipment has not changed a great deal. Their thought process remains the same as it was twenty years ago. But if you have sharp knowledge about how they behave while purchasing high-value foreign equipment, you could easily sell your product to them and take home huge profits. The success lies in understanding their purchasing mentality and dealing with them properly.

 

Along with registering your trademark and design patent, take a look at the list of contacts you can ask your Chinese partner to sign as a preventive measure:

  • China Manufacturing Contracts: OEM, CM, and ODM Arrangements
  • China NNN Agreements
  • China Product Development Agreements

 

As selling products online have become so easier, there is a great chance that the manufacturer you have trusted with the technology, know-how, and molds of your product, might betray and directly sell them to your target audience. After acquiring the complete knowledge of your product, it takes only seconds for your Chinese manufacturer to become your biggest challenger. As it is you who is giving your product idea to the Chinese farm, it is always a clever idea to impose some sort of restriction on them in case they betray you someday. Do keep in mind that while doing business in China, prevention is always better than cure.

 

Foreign companies doing business in China have to keep in mind that flight delays are the most common incident in China and you are definitely going to get affected by it. So you need to prepare yourself well in advance, schedule your meeting accordingly and be ready to face mass delays and flight cancellations in China.

 

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