Beijing hikes minimum wage by 20 per cent

Authorities in Beijing have hiked the minimum wage in the capital by about 20 percent for the second time in six months amid soaring food costs, rising property prices and China's widening wealth gap.

The minimum monthly salary in the city will be increased to 1,160 yuan from 960 yuan on January 1, according to a statement posted on the government's website Tuesday.

In July, Beijing increased the minimum wage by 20 percent to 960 yuan.

China launched a round of minimum wage hikes this year after a spate of labour disputes and a string of employee suicides highlighted growing discontent among the country's millions of low-paid workers.

This latest increase in the nation's capital comes amid growing official and consumer anxiety over rising inflation, which topped five percent in November for the first time in more than two years.

Food costs soared nearly 12 percent year-on-year last month while property prices continued to rise, defying government efforts to cool the red-hot real estate market.

Ever-fearful of inflation's historical potential to spark unrest in China, top leaders have been pulling on a number of policy levers to rein in consumer prices and tame runaway house prices.

On Saturday, the central bank hiked interest rates for the second time in less than three months after ordering lenders to keep more money in reserve, effectively limiting the amount of funds they can lend.

Premier Wen Jiabao went on national radio at the weekend to reassure listeners that the government would be able to tackle inflation and house prices that have risen out of the reach of many ordinary Chinese.

Wen said Sunday he understood that recent price rises had "actually made life even more difficult for people on low and medium incomes".

But he stressed that thanks to government intervention, "we are fully able to control the general level of prices" and said he was confident that housing prices would come back down to a "reasonable level".

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