South China's Guangdong Province will raise its minimum salary levels in September, in attempt to make the province a more appealing destination for migrant workers.

The increased monthly pay will benefit more than 23 million migrants workers who are currently employed in the province, said Fang Chaogui, director general of Guangdong Provincial Bureau of Labour and Social Security.

"Guangdong will once again lead the way in minimum salary levels," Fang told a press conference in Guangzhou, capital of Guangdong Province, yesterday.

After the new standard comes into effect September 1, workers in Guangzhou will earn a minimum of 780 yuan (US$97.5). In Shenzhen it is increased to 810 yuan (US$101.25), while in cities Zhuhai, Foshan, Dongguan and Zhongshan the minimum will be 690 yuan (US$86.25).

The increase is on average 17.8 per cent, Fang said.

"This is the seventh time Guangdong has raised its minimum salary in the past 12 years," Fang said. "This is the biggest increase yet."

Currently, the minimum monthly salary in Shanghai and Jiangsu Province is 690 yuan (US$86.25), higher than the 640 yuan (US$80) in Beijing. These places are also reported to be considering an increase.

Fang urged all companies in Guangdong to strictly implement the new standard and further protect the legal rights of migrant workers.

"We will seriously punish those who fail to adopt the new minimum salary standard," he warned.

The large number of foreign-funded companies, joint ventures and private companies registered in the province are suffering a shortage of more than 1 million workers.

Low salaries are blamed as one reason many workers are leaving the area for the Yangtze River Delta region.

Local companies and workers welcomed the announcement,

Peter Chu, who runs a shoe factory in Guangzhou's suburbs, said: "The new minimum salary will certainly help us recruit more workers for business expansion, without significantly increasing business costs in the near future."

The Hong Kong investor said workers' salaries accounted for about 10 per cent of his company's total production cost.

"Many companies could reduce production costs through scientific and technological innovations," Chu told China Daily.

Chen Zhihua, a local migrant worker, said the higher salary would benefit workers.

"The increase will help the many migrant workers in the province, and encourage us to work harder."

(China Daily July 13, 2006)