Major China Export Hub Raises Minimum Wages

Shenzhen, a boomtown in China's southern manufacturing hub, will increase the minimum wage by 13.6 percent in February, the local government said, adding further pressure to exporters who are grappling with falling demand from the West.

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The wage hike, following rounds of increases over the past few years, came after a series of major strikes at factories across China's export power houses in the Pearl River Delta in recent months, demanding better wages and benefits.

Minimum monthly wage will rise to 1,500 yuan ($240) in the city next to Hong Kong on Feb. 1, the Shenzhen municipal human resources and social security bureau said in a statement on its website.

Some factory owners in Shenzhen expressed disappointment at the decision, saying Chinese authorities have ignored their lobbying for a one-year freeze on plans for wage hikes, the South China Morning Post reported Wednesday.

"We are disappointed at the sudden pay increase, which came at a very inappropriate time and hit badly our confidence in the prospect of the manufacturing sector," Jimmy Kwok Chun-wah, who runs Rambo Chemicals, a petrochemical plant in Shenzhen, was quoted as saying in the newspaper.

China's export-oriented manufacturing industry is already struggling with falling orders amid the eurozone debt crisis and rising labor and raw material costs.

The Federation of Hong Kong Industries, which represents around 3,000 industrialists running factories in China, said in November that up to a third of Hong Kong's 50,000 or so factories in China could downsize or shut by the end of the year as exporters get hit by cost rises and darkening global demand for Chinese goods.

The industrial body expected orders in the first half of 2012 to fall between 5-30 percent.

Minimum monthly salaries in Sichuan, a southwestern province in China and a major food producer, will rise to between 800 yuan and 1,050 yuan ($130-$170) in 2012, the Sichuan provincial government said in December.