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Apple maker vow 'to hike China pay'

A pledge by the manufacturer of Apple's iPhones and iPads to limit working hours at its factories in China could force other global corporations to hike pay for the Chinese workers who produce the world's consumer electronics, toys and other goods.

Foxconn Technology's promise comes as Beijing is pushing foreign companies to share more of their revenues with Chinese employees. It follows a report by a labour auditor working for Apple that found Foxconn was regularly violating legal limits on overtime, with factory employees working more than 60 hours per week.

"I think whatever Foxconn did will have an impact, certainly, on all Chinese workers in all trades," said Willy Lin, managing director of Hong Kong-based Milo's Knitwear, which makes clothing in three factories in China for European clients.

Foxconn promised to limit hours while keeping total pay the same, effectively paying more per hour. Foxconn is one of China's biggest employers, with 1.2 million workers who also assemble products for Microsoft and Hewlett-Packard.

China has long been a low-cost manufacturing centre for goods sold under foreign brand names. Wages were already rising quickly as companies compete for workers and communist leaders try to push the country up the technology ladder to make more profitable products.

After a lull following the 2008 global crisis when Beijing froze the minimum wage to help exporters compete, Chinese workers have received big pay hikes over the past two years, though salaries are still low by Western standards.

Foxconn responded to a spate of suicides by employees at one of its factory campuses in 2010 by more than doubling its basic monthly salary to 1,800 yuan (£178). The same year, Toyota and other Japanese carmakers granted pay hikes following a wave of strikes that had tacit government support.

Communist leaders have promised to double the country's minimum wage from 2010 levels by 2015.

Beijing has tightened enforcement of wage and hour rules "because there has been a general lack of compliance - greater than in other countries," said K Lesli Ligorner, head of the China employment group for law firm Simmons and Simmons.

"China is trying to make sure that at least at the lowest level of unskilled workers there are greater protections in place for them," she said. She added that higher wages at Foxconn "will have a ripple effect".

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