China should slow down its wage increase to maintain its economical fitness, Xin Changxing, the vice minister of human resources, said on Friday.

By the end of June, China's unemployment rate in urban areas was about four percent up from March, according to official data, CCTV reported. The unemployment figure was obtained from data collected from the labor market and reflects the real situation, Xin said.

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While wage increase lifts workers' standards of living, it is also diminishing the country's competitiveness since Chinese wages are growing faster than the economy over much of the past decade.

"Our advantage in labor costs is no longer as clear-cut as before," Xin said. "We should ease the frequency and scale of wage increases so as to preserve our competitive advantage."

Several Chinese regions have already slowed or halted minimum wage increase because of the increasing expenses and slow demand. In the first half of this year, six regions increased their minimum wages only by 11 percent compared with the 13 areas that increased by 13.5 percent in the same period in 2015.

According to The Wall Street Journal, Xin noted that stunting the wage growth should be carried out alongside efforts to restructure uncompetitive sectors and enhance productivity in labor-intensive industries to also prevent mass layoffs.

Furthermore, lowering wage growth would also allow Chinese companies to compete better with overseas low-cost centers for exports, Channel News Asia reported.

Meanwhile, Xin admitted that he is anticipating around 800,000 laborers would be laid off this year. However, he noted made that the process of retraining and reassigning these workers is being conducted in a stable and orderly manner.

Tagssalary increase, wage growth, china, Economy, china economic slowdown