China minister shrugs off labor unrest concerns

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China's commerce minister has shrugged off concerns that recent labor unrest in the so-called "workshop of the world" will scare investors away, state media reported Saturday.

Factories in run by foreign firms such as Toyota and Honda have recently been hit by a wave of labor unrest that has forced some companies to raise wages for their workers.

"A small proportion of the contracts may be transferred to countries with lower costs but China has yet to lose its labor cost advantage," Chen Deming was quoted as saying by the official China Daily newspaper.

The unrest has sparked fears of a snowball effect that could signal the days of cheap Chinese labor are over for foreign investors, who might start transferring their manufacturing contracts to cheaper countries.

Chen told Hong Kong-based Pheonix TV that the recent strikes were "isolated cases".

"We want to ensure workers get an appropriate wage increase but also want to pay attention to the capacity of enterprises to bear the burden (of rising personnel costs)."

Japan's Toyota Motor, which became the latest company to be hit by strikes this week, said Friday its largest assembly plant in China had to be suspended due to work stoppages.

Honda has also been impacted. The firm offered a 24 percent pay rise to staff at its main parts factory to end a strike while employees at another plant have agreed to go back to work as wage talks continue.

And in response to 11 suicides among its Chinese work force, Taiwanese firm Foxconn -- which counts Apple, Dell and Sony among its clients -- doubled salaries.

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