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Factory owners in Guangzhou are bracing for an increase in the minimum wage, speculated to be as high as 1,000 yuan (HK$1,135) a month, up from 860 yuan, reports the South China Morning Post, adding that a 16% rise would align Guangzhou's minimum pay with that of Shenzhen, which has among the highest salaries on the mainland.

The Post reveals that the minimum wage was frozen last year to help manufacturers battered by the downturn following a directive by the Ministry of Human Resources and Social Security in November 2008.

A pay rise would add to the operating costs of manufacturers, which are still battling the repercussions of the global financial crisis, notes the Post.

"Any increase below 10% is manageable for factory owners, but a sharper increase will be damaging," Dennis Ng Wang-pun told the Post. Ng runs a jewellery factory in Panyu.

Nelson Siu Nai-sun, the president of the Hong Kong Professionals and Executives Association, a human resources body with 2,500 corporate members in Hong Kong and the mainland, told the Post that a rise in the minimum wage in Guangzhou was necessary because of rising living standards and looming inflation.

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