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Current Affairs

China to head off AI-fuelled inequality by lifting salaries, narrowing pay gap

China has made income growth and the reform of its wage-distribution system a priority within broader efforts to cushion the domestic job market against the…

By Samantha Johnson / July 10, 2026

China has made income growth and the reform of its wage-distribution system a priority within broader efforts to cushion the domestic job market against the impact of artificial intelligence over the next five years.

A new blueprint released by the Ministry of Human Resources and Social Security on Thursday laid out a detailed road map for the strategy, vowing to promote collective wage bargaining within the private sector, ensure steady wage growth, and tilt pay towards frontline workers.

Within state enterprises, the plan urges managing “excessively high earnings” while raising pay incentives for critical talent and linking compensation directly to technical expertise. To protect the bottom tier of the workforce, Beijing called for refining its mechanism for adjusting minimum wage standards and initiating legislative research on minimum wage laws.

Authorities aim to “adopt a comprehensive approach to manage how shifting external environments and AI advancements affect the workforce, prioritising job-expanding initiatives”, according to the blueprint.

The document comes as a wide income gap, especially between rural and urban areas, remains a major concern in the world’s second-largest economy. And some economists warn that the rapid rise of AI could make matters worse.

Beijing has also pledged to “combine investment in physical assets with investment in people” – a new slogan introduced in its 15th five-year plan – to tap into the spending power of lower-income groups while grappling with weak domestic demand.

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