Vietnam, a country with a lower per capita income than China, now pays its workers a higher minimum wage. In 2024, Vietnam's monthly statutory minimum wage stood at $692, compared with China's $543 - a disparity that highlights what MIT economist Yasheng Huang called a system that "shortchanges its workers" as a matter of policy.
The comparison is drawn from International Labor Organization data cited by Huang in a Foreign Affairs analysis, as "Hvylya" reports. Vietnam has consistently raised its minimum wage as it integrated into the global economy. China has not - and at times has moved in the opposite direction.
During the 2008 global financial crisis, Beijing actually lowered the minimum wage. The ratio of China's minimum wage to per capita GDP fell from 0.37 in 2000 to 0.27 in 2024, a decline that points to deliberate wage restraint even as the broader economy grew rapidly. Beijing did raise the minimum wage by 3.3 percent during the COVID-19 pandemic, but the overall trajectory has been downward relative to economic growth.
Huang argued this chronic underpayment is not incidental but structural. By keeping wages low, China can "compete on both the high and low ends of the manufacturing spectrum" - putting up capital to rival U.S. firms in solar panels and electric vehicles while maintaining labor costs low enough to compete with African countries in textiles.
The contrast with Vietnam underscores a broader imbalance. China's share of global manufacturing dwarfs its share of global consumption - a gap that Huang attributed directly to decades of suppressed wages keeping Chinese households too poor to buy what they produce.
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