The minimum wage in Guangdong will jump by an average of 19 per cent from May 1 - making it the nation's highest by some margin.
The provincial government's announcement yesterday startled some local manufacturers who expected the rate to be about 15 per cent, but others said the increase would have little effect as they had already been paying more than that.
The latest adjustment would bring the monthly salary of a general worker to 1,550 yuan (HK$1,928) in Guangzhou, 1,310 yuan for so-called second-tier cities including Zhuhai, Foshan and Dongguan, and 1,130 yuan for third-tier cities like Shantou and Weizhou.
The Federation of Hong Kong Industries said the increment - higher than both Beijing and Shanghai - was inevitable as Guangzhou froze the minimum wage last year in response to pleas from foreign investors there. The federation welcomed a grace period of three months which will allow Hong Kong companies in Guangzhou to make adjustments.
The Chinese Manufacturers' Association of Hong Kong, which represents over 3,000 industrial companies, said the increase was unlikely to have a big impact on the manufacturers there.
"Those who can't survive the changes have already left and those who remained have begun cutting manpower for the past two years," said vice-president Edward Tsui Ping-kwong.
"For example, I have nearly halved my workforce to about 700 from 1,300."
Tsui said he had long been paying more than 2,000 yuan in monthly wages for a general worker due to labour shortages in Guangzhou.
Han Zhipang, a member of Guangzhou People's Political Consultative Conference, told Yangcheng Evening News that a pay rise of 19 per cent still lagged behind inflation on food and housing accumulated over the past two years, and the fact that the new rate would not be enforced until May 1 meant it violated central government's requirement to review the minimum wage every two years.
Guangzhou's minimum wage was last re-evaluated in March 2011.