BEIJING (Reuters) – Wages in China kept pace with economic growth in the first half of 2016 but maintaining that will be difficult, the country’s statistics bureau said on Sunday.

It cited issues such as overcapacity in China’s coal and steel sectors as well as some declining agricultural prices as taking a toll on salaries.

Maintaining the relationship between the pace of growth and that of wage increases is a challenge requiring “close attention”, Wang Pingping, head of the National Bureau of Statistics’ (NBS) household survey office said, according to the bureau’s website.

Disposable household income, adjusted for inflation, rose 6.5 percent in the first half of the year, compared with economic growth of 6.7 percent, the statistics bureau reported on July 15.

Workers rest outside a construction site in Beijing’s central business district, China, July 15, 2016. REUTERS/Jason Lee

Economic growth in the second quarter was faster than expected as a government spending spree and housing boom boosted industrial activity, but a slump in private investment growth points to a loss of momentum later this year.

Several Chinese provinces have slowed or halted increases to minimum wages, as companies face pressure from rising expenses and weakening demand. China’s human resources vice minister this month called for a slowdown in wage increases in order to maintain competitiveness.

China plans to allocate 100 billion yuan ($14.96 billion) to help local authorities and state-owned firms finance layoffs in the steel and coal sectors this year and in 2017. Layoffs from the two sectors are expected to total 1.8 million people, according to official estimates.

($1 = 6.6865 Chinese renminbi)

(Reporting by Nick Heath and Winni Zhou; Editing by Richard Borsuk)

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