2010-07-23 15:23

BEIJING - Companies should strike a balance between pay increases, job creation and their long-term development, China's Ministry of Human Resources and Social Security said Friday.

Ministry spokesman Yin Chengji said at a press conference that a timely and moderate rise in salaries would help spur domestic consumption, improve people's livelihoods and help establish stable and harmonious labor relations.

But he also warned that a sharp rise in salaries may increase companies' costs and weigh on their profitability, forcing them to cut jobs and undermine their long-run development.

"Some companies may not be able to bear the rising labor costs if salaries jump too fast," he said.

Companies should strengthen management and technology innovation as well as increase labor productivity to raise employees' income and improve their livelihoods, Yin added.

When asked about the ministry's investigation into Foxconn Technology Group whose Shenzhen plant has seen a series of employee suicides in recent months, Yin said the matter was "resolved" after active measures were taken by local governments, related central departments, unions and the company. He didn't elaborate.

Yin said the ministry would strengthen labor dispute mediation and arbitration and protect employees' interests.