Wen urges Japan to raise wages of China workers

BEIJING, August 29, 2010 (AFP) - Chinese Premier Wen Jiabao on Sunday urged Japanese companies operating in China to raise workers' wages, after a series of strikes led to costly factory shutdowns, Japan's foreign ministry said.

Wen made the comments in a meeting with numerous Japanese ministers, including Foreign Minister Katsuya Okada, at a "strategic economic dialogue" in Beijing Saturday co-chaired by Chinese Vice Premier Wang Qishan.

"Labour disputes have been occurring at some foreign companies, but behind the scene lies the problem that wages are relatively low," Wen was quoted as saying in a statement released by the Japanese ministry.

"I hope you address this issue."

During Saturday's dialogue, Okada laid out a list of Japan's trade grievances, including the labour disputes and Japan's concerns over Chinese export controls on rare earth metals, which are used in hybrid and electric cars, mobile phones and other high-tech products.

China "will not stop exporting rare earth metals," Wen was quoted as saying, but he added that China has begun controlling exports of such products because of excessive development and smuggling.

Masayuki Naoshima, Japan's minister of economy, trade and industry, told the meeting that Japan wants to continue talks on the issue, the statement said.

China accounts for 97 percent of global rare earths production, according to Japanese ministry officials.

During Saturday's talks, Japan became the latest of China's trading partners to complain about the nation's business environment.

Japanese firms have borne the brunt of the recurring labour disputes over pay and conditions at foreign-run factories in China this year.

A Japanese media survey in July said that affiliates of Japanese firms were hardest hit because of a view that they are more likely to respond to demands for pay increases.

Officials said Okada pressed Beijing for more "transparent" labour policies.

"More and more Japanese companies are developing cooperation with the Chinese side," a press release issued by the State Council, China's cabinet, quoted Okada as telling Wen.

"They are not only using China as a production base, but are viewing China as an important market. The two sides are increasingly sharing the same fate."

A Japanese government spokesman earlier said China attributed the labour unrest to a "natural" push for better wages.

"Japan is not satisfied with this," said the spokesman, Satoru Satoh.

China has heard a chorus of complaints by European and US businesses and officials over perceived unfair policies and market restrictions hurting foreign enterprises.

Wen however appeared to attribute such issues to the global economic downturn and urged Japan to work with China to overcome the difficulties.

"Sino-Japanese economic and trade ties have withstood the serious test brought on by the global financial crisis and a positive trend for development has emerged," Wen said, according to the Chinese news release.

"Both sides must grasp the current and timely opportunity of the improvement in bilateral relations... to create a new phase in bilateral economic and trade cooperation."

The two countries should further focus on the "green economy", Wen said, including recycling and environmental protection.

China was increasing its imports from Japan, while Chinese investment into its neighbour was also growing, he added.

"China and Japan have common interests in pushing forward regional cooperation, advancing the reform of the global economy and opposing trade protectionism," Wen said.

"This is not only in the important interests of China and Japan, but will have a positive impact on Asia and the world."

China's economy outpaced Japan in the second quarter in nominal terms. The two countries are numbers two and three in the world behind the United States.