The minimum wage in the country's largest export hub will be increased by 19.5-24.5 percent from May, said a statement posted Thursday on the Guangdong Labour and Social Security Bureau.

The rise will translate into a minimum wage of up to 1,030 yuan (151 dollars) in the provincial capital of Guangzhou, and about 660 yuan in some smaller towns, according to the statement.

It comes as China tries to put a cap on surging inflation, with Premier Wen Jiabao recently saying he did not want it to rise above three percent.

Hong Kong's South China Morning Post said the rise was the biggest since Guangdong introduced standard minimum wages in 1994.

The government did not introduce a pay hike last year as it sought to help companies in the region weather the global downturn, previous state media reports said.

The financial crisis hit exporting regions such as Guangdong, as foreign demand for Chinese goods plummeted.

But factories in Guangdong's Pearl River Delta region have been flooded in recent months with new orders as the global economy recovers.

Many are now suffering from an acute labour shortage as large numbers of migrant workers have refused to return to work after going home for Lunar New Year in February, the nation's most important holiday.

Many laborers have said rising prices have bitten hard into their low incomes and they had opted to find jobs closer to home amid Chinese policies aimed at boosting development in the vast interior.

The minimum wage hike is expected to "improve Guangdong's attractiveness to job seekers, guide workers to come back, and alleviate the labour shortage problem in some sectors", the provincial labour department's statement said.

By March 10, plants in Guangdong were 700,000 workers short.

All rights reserved. © 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.