The capital of Guangdong province raised its minimum monthly salary to 1,300 yuan ($198), which was the greatest amount seen among mainland cities.

The change amounted to an 18.2 percent rise above the city's previous minimum monthly salary of 1,100 yuan. Guangzhou's minimum hourly wage was also increased to 7.47 yuan an hour from 6.32 yuan an hour.

Local labor authorities said the city made the change after considering whether local companies could afford to pay higher minimum monthly salaries.

"The production and operation of most local companies will not be affected by the salary growth, as workers' salaries usually account for about 10 percent of their operation cost," unidentified labor officials said.

The city government also denied rumors that authorities are attempting to force labor-intensive businesses out of the southern metropolis by increasing the local minimum wage.

Guangzhou is not the only place in Guangdong province to institute such an increase.

The minimum salaries in Foshan, Zhuhai, Zhongshan and Dongguan in the Pearl River Delta region, all of them industrial hubs, have been lifted to 1,100 yuan a month.

As for Guangdong, the latest increase in minimum salaries took place in May.

Ou Zhenzhi, director of the Guangdong provincial department of human resources and social security, said the province's minimum salaries were increased in accordance with a rise in the local prices of various goods and services.

"And the rise in minimum salaries will help make Guangdong a more appealing destination for migrant workers from around the country," Ou said.

The increased monthly pay will benefit more than 23 million migrant workers in the province, which is often called a "world factory", he added.

He encouraged all companies in Guangdong to strictly enforce the new rule and further protect the legal rights of migrant workers.

Early this year, Ou predicted that Guangdong, which contains a large number of foreign companies, joint ventures and private companies, will suffer a shortage of more than one million workers this year. Guangzhou alone is expected to see a labor shortage of 150,000.

Lin Jiang, a professor of public finance and taxation from Lingnan college of the Guangzhou-based Sun Yat-sen University, said the increase in minimum monthly salaries will likely place pressure on the province's small and medium-sized enterprises.

"Many employers will also have to increase the monthly salaries of their senior executives," Lin said.

Large numbers of local companies and workers have welcomed the new move.

Yao Shijun, who runs a paperboard factory in Foshan's Nanhai district, said the increase in minimum wages will certainly help attract more migrant workers to Guangdong and help employers recruit more workers in the future.

Chen Xingwen, a migrant worker, said the increase is good news for the large number of migrant workers in Guangdong.

"The higher pay will benefit the migrant workers in the province and encourage them to stay in Guangdong," Chen told China Daily on Wednesday.

"Many migrant workers have found it difficult to afford the cost of living because of their low incomes."

Four cities and provinces in China have raised their minimum salaries since the beginning of the year.

The minimum monthly salary in Beijing was increased to 1,160 yuan from 960 yuan in January, while East China's Jiangsu province raised its minimum salary level to 1,140 yuan a month.

Shanghai will raise minimum monthly wages by 14 percent, to 1,280 yuan a month, in April, the city government said on Wednesday.

The central government has been encouraging wage hikes in the hope of boosting consumer spending and reducing the economy's reliance on exports.