By Guan Xiaofeng (China Daily)
Updated: 2007-07-18 09:17

Giving workers regular and steady pay rises will sharpen companies' competitiveness and quicken economic growth, a senior official said yesterday.

"Cheap labor has long been an economic advantage for our country," Qiu Xiaoping, from the Ministry of Labor and Social Security said in a Web-cast on the government's website (www.gov.cn).

"However, if average pay levels remain low or increase only slowly over a long period, the economy will be damaged by the widening income gap, which will stifle consumption and lead to a high trade surplus," he said.

Qiu said that in the long run, by paying staff decent wages, companies will benefit from both technological advancements and by being more competitive.

Qiu expressed concern that the wage gap across different parts of the country and within different industries was widening, despite recent figures suggesting average annual salaries had risen.

He said statistics that pointed to rapid pay growth were misleading as they hid the fact that some low-income groups had received no such increments, and in some cases had actually seen their wages slide.

According to the Beijing bureau of statistics, in 2006, the average annual pay (before tax) of a Beijing worker was 36,097 yuan (about $4,770).

However, almost 61 percent of workers earned less than that.

The figures also showed that workers in the security, banking, legal services, shipping, civil aviation, oil and natural gas industries had the highest average annual salaries (100,000 yuan and above), while those in the garment and textile industries received an average of just 16,000 yuan.

Qiu said last year, local governments across the country introduced new regulations on minimum wage rates in a bid to boost the salaries of the nation's lowest paid workers.

Twenty-nine of the 31 provinces, municipalities and autonomous regions on the mainland upped their minimum wage rates by an average of 30 percent.

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