'Made in China' must ease worker woes, says Communist Party

China must lift the incomes of workers to protect stability and promote domestic spending, the country's top official newspaper said on Thursday, adding to signs that Beijing is worried about discontented rural migrants.

The commentary in the People's Daily did not mention a recent rash of strikes by migrant workers in southern China, a sensitive topic for the ruling Communist Party, wary of protests that could unsettle its grip.

Hundreds of workers at a factory in Guangdong province that makes locks for Honda vehicles have returned to work, suspending a stoppage that began last week, pending an outcome from wage negotiations on Friday.

The People's Daily, echoing comments by Chinese premier Wen Jiabao, said the time had come to narrow the gulf between rich and poor, which the paper said was stifling consumer demand.

The "made-in-China" model is "facing a turning point", said the newspaper, which acts as a channel for government thinking. It urged improved conditions for the migrant workers whose cheap labour has powered China's export growth.

"While transforming the mode of economic development, we must ensure their fundamental subsistence rights, labour rights and development rights," said the commentary by Tang Jun, a social policy researcher at the Chinese Academy of Social Sciences, a government think tank.

"Raising the income levels of the worker stratum and adjusting the gap between rich and poor is not merely an emergency response to protect stability; it should also be a social transformation to match the transformation in the mode of economic development," wrote Tang.

The workers at the Honda lock plant are demanding a base salary of 1350 yuan ($198), not the 1600 yuan they originally pushed for. The management is reluctant to raise wages but might be willing to increase benefits, such as a housing allowance, said one employee at the factory.

The sympathetic account of worker grievances in the state media suggests that Beijing wants to avoid outright confrontation with the workers and may welcome some concessions to their wage demands.

"'Made in China' and 'the factory of the world' are mere names that are unimportant," said the Chinese-language newspaper.

"What is important is achieving a relatively big improvement in the lives of ordinary people, especially wage labourers and their families."

This week, premier Wen also urged better treatment of the country's many millions of migrant labourers. He told some of them that "all parts of society should treat young migrant workers as they would treat their own children."

The strike at the Honda lock plant was the third to hit a Honda parts supplier in China in the last few weeks. The other two strikes, at suppliers producing transmissions and exhausts, were settled after workers received pay rises.

The unrest has raised questions about the future of low-cost manufacturing in China.

The People's Daily said that as China's supply of young, cheap workers from the countryside tightens, the country must focus on improving skills and shifting from manufacturing to service jobs.

That shift will also require giving workers thicker pay packets to spend on consumption and services, said the paper.