Shoppers walk past small shops at an underground mall in Zhuhai, neighboring Macau, April 29, 2013. Reuters-Yonhap

After a few years of belt-tightening, millions of Chinese civil servants are expected to bring home a much-delayed pay rise ahead of Lunar New Year later this month.

Several civil servants and workers at public institutions in China said they had been notified their finance or human resources departments about an increase in their basic monthly pay.

They said the amount, ranging from 300 to 500 yuan ($41 to $69), would be effective before the holiday, also known as the Spring Festival, which this year falls on January 29. But the exact amount will vary depending on location, local budgets, position and seniority.

An official in the central government in Beijing said he and his colleagues were formally notified about the pay rise in the last week of December.

"It certainly helps to improve morale in the office as the festive season is just around the corner. But we are also reminded not to openly discuss it," he said, declining to be named due to the sensitivity of the issue.

For those whose pay will rise by 500 yuan, the net increase in take-home pay is around 350 yuan after social security contributions.

Administrative officials working for the Jiangsu, Jiangxi, Zhejiang and Fujian provincial governments confirmed a similar increase in their base pay.

Several doctors at public hospitals and public school teachers said they were also included in this round of pay adjustments and reported pay rises similar to those of administrative officials.

A doctor from the northwestern province of Gansu said medical workers and administrators cheered when the hospital's finance department issued a formal pay rise notice on Monday.

"I am very happy because we had no pay adjustment for more than five years as our hospital has been struggling with its finances, especially after the pandemic," said the doctor, who also requested anonymity.

She said she would take her husband and son out for a good meal and buy gifts for her mother.

The authorities have remained tight-lipped about the pay adjustments so far. Civil servants' pay is a particularly sensitive topic as the country copes with economic challenges that have resulted in private sector pay cuts and rising overall unemployment, especially among young people.

China last publicly announced civil service pay increases in 2015 and 2006.

In 2015, the basic monthly salary for national-level officials — a group that consists of the seven members of the Politburo Standing Committee, including President Xi Jinping - rose from 7,020 to 11,385 yuan — an increase of about 60 percent. Meanwhile, the salaries for the lowest-level civil servants more than doubled from 630 yuan to 1,320 yuan, according to a China Daily report.

But several civil servants noted that the small increase would not make up for pay cuts in the past few years.

A man walks in the Central Business District on a rainy day, in Beijing, China, July 12, 2023. Reuters-Yonhap

The Post previously reported that government workers in China had faced de facto pay cuts since 2021 as part of belt-tightening measures to free up funds for tax cuts and other moves to boost business and energize the economy.

A Jiangsu civil servant said his yearly bonus was cut by more than 50,000 yuan starting in 2021, so the increase in base pay would only make up for "about 15 to 20 percent" of the previous cuts.

"Thinking of that, there's little to celebrate actually. But, it is still better than none," he said.

The latest pay adjustments only apply to base salary, one of three components of Chinese civil servants' total compensation, which also includes bonuses and allowances. Base salaries tend to be relatively low compared to bonuses and allowances.

Ministerial officials earn a monthly base pay of less than 9,000 yuan, while departmental-level cadres, who form the backbone of the civil service as they are responsible for most of the work and daily operational decisions, earn about 5,000 yuan each month in base pay on average.

Year-end bonuses and subsidies for housing, transport, education, telecommunications, childcare and medical benefits, which are usually not disclosed to the public, form the lion's share of their compensation.

Alfred Wu, an associate professor at the National University of Singapore's Lee Kuan Yew School of Public Policy, said the pay increase for government workers might be part of Beijing's overall plan to boost consumption and workers' income as a share of the economy.

"Beijing's priority is to pump up consumption, and a pay rise to tens of millions under government payroll is the most direct and effective way in China's party-state political system and state-led economy," he said, adding that various local governments had also increased the minimum pay for private sector jobs in recent months.

In a 24-point set of guidelines focused on employment issued in September, the State Council, China's cabinet, said it would push for "reasonable growth" of wages and improve the proportion of wages as part of the total income pie.

According to the latest government statistics available, China had 7.1 million civil servants and more than 30 million people working for public institutions such as schools and hospitals.

But Wu cautioned that the civil service pay rise might have a "minimal economic impact", noting that research on previous pay adjustments in China's public sector showed inflation had followed and nullified the real effect of higher salaries.

Read the full story at SCMP.