Minimum wage for workers in Shanghai will be raised to 1,820 yuan or US$293 per month, the highest in mainland China, starting April, state media reported.

According to Xinhua News Agency, Shanghai's decision to raise minimum wage followed the recent announcements of Shandong province and the city of Shenzhen to raise minimum pay rate.

Like Us on Facebook

City and provincial governments in China have the free hand to set minimum wage standards. More regions are expected to announce salary increases in the next few days, the state-run news agency reported.

Analysts expressed concerns that the recent wage increases will further bring the economy to a slowdown as manufacturers begin to look for other Asian locations where labor is cheaper.

The state media said the rise in minimum wages will be implemented in areas that have fewer new workers entering the labor force. Raising the minimum wage rates, experts said, is now being used address labor shortages.

Increasing minimum wages is also seen as part of the government's urbanization plan, an ambitious project to move millions of Chinese into cities from rural areas by 2020. A city with the highest minimum wage rate is sure to attract more workers, experts said.

Stephen Orlins, head of the National Committee on US-China Relations, said the raising of minimum wages is also a part of the government's effort to equalize and take the poorest Chinese in the country and move their standards of living up.

A recent analysis conducted by the Bank of America Corp showed that the country's wages are expected to go up by 10 percent or more this year, which could mean driving low-cost manufacturers out of China.

In a survey conducted by the Hays' Asia Salary Guide 2014, the agency said that 67 percent of Chinese employers said they will raise employees' salaries by more than 6 percent this year, a 1 percent rise from a year ago.