Chongqing - Chongqing Shuda Feed Co., Ltd. recently successfully implemented e-CNY or digital RMB wage payments for 13 migrant workers at its feed additive production site.

At the site, workers showcased wages in digital wallets, highlighting secure and timely payments— a key milestone in Chongqing's pilot program for paying migrant workers with digital currency.

The scenery of Liangping District in Chongqing. (Photo/Liangping District)

Wage arrears are a recurring issue in the construction industry, and the Chinese government has been actively addressing it. 

According to the Zhejiang Academy of Human Resources and Social Security, there are three leading causes: the industry's organizational structure, irregular employment practices, and the low education levels among migrant workers, which result in limited awareness of their legal rights.

The construction sector commonly uses a subcontracting model that creates a pyramid-like structure: "Construction Unit - General Contractor - Subcontractor - Migrant Workers." In this setup, migrant workers, who are the most involved in the construction, are positioned at the bottom and farthest from receiving financial benefits.

Some unqualified construction teams, typically made up of fellow migrant workers, operate on trust and often skip formal procedures. This leads to issues like foremen controlling documents and wages, irregular attendance records, and wage arrears. 

The 2023 Migrant Worker Monitoring Survey Report from China's National Bureau of Statistics reveals that the average age of migrant workers has risen to 43.1 years, with 66.7% having only a junior high school education or less. Data from the Hohhot survey team in Inner Mongolia shows that just 15% of construction workers are under 30, while nearly 43% are over 50. 

This older, less educated demographic often has difficulty obtaining proof of employment and asserting their rights, especially in wage disputes, which can lead to the use of unconventional measures.

With the use of E-CNY, the digital currency issued by the People's Bank of China, wage payments have become quick and direct. This currency combines the advantages of legal currency with a digital format.

Chen Junjun, a representative of Chongqing Shuda Feed Co., Ltd., explained that the company has set up an e-CNY account to facilitate wage payments directly to workers’ digital wallets, bypassing third parties like subcontractors and foremen and ensuring rapid disbursement. 

Staff from the Liangping District Human Resources and Social Security Bureau explain the use of e-CNY to workers at the feed additive production project site of Chongqing Shuda Feed Co., Ltd. (Photo/Zhou Jie)

This central bank digital currency acts as a cash-equivalent payment tool, ideal for everyday transactions. It is particularly advantageous for migrant workers, who primarily use their wages for daily expenses and savings.

Chen noted, “e-CNY is similar to WeChat Pay and Alipay.” While it shares functionality with mobile payments, e-CNY operates independently of bank accounts.

The Liangping District Bureau of Human Resources and Social Security in Chongqing said E-CNY streamlines the payment process and addresses issues like delays caused by large-scale wage distributions, cross-bank transfers, and lost or missing bank cards.

However, some workers have reported difficulties in using digital wallets and noted that not all merchants and platforms accept e-CNY, indicating a need for broader adoption and education on its use.

(Zhou Jie from Liangping District Converged Media Center also contributed to the report)