Guangdong will raise the minimum wage by an average 21 per cent, fuelling fears it will weaken the competitive strength of the Pearl River Delta and not solve the region's chronic labour shortage.
The Guangdong Labour and Social Security Bureau announced earlier this week that the average minimum wage in the province would be raised by between 19.5 per cent and 24.5 per cent from May this year. That is the biggest rise since the province introduced standard minimum wages in 1994.
The increase aims at narrowing the income gap and relieving the labour shortage that has plagued the province's manufacturing industries in recent months.
But the Federation of Hong Kong Industries said the 'higher than expected' wage rise would add extra cost to employers and even weaken the competitive strength of some labour-intensive industries.
Some Hong Kong factory owners said the new measure would be of little help in attracting more migrant workers as many manufacturers still face labour shortages even after paying their employees more than what the government requires.
New standards for the five levels of minimum wages have been set for different parts of the province based on the local employment rate, income level, inflation rate and social security level.