As part of the axe falling on quangos, the government-backed Consumer Direct helpline will be taken over by the Citizens Advice Bureau.
The Office of Fair Trading (OFT) is being stripped of its consumer protection role.
The OFT is to be merged with the Competition Commission.
Continue reading the main story
Related stories
List of axed quangos is published
Q&A: What is a quango?
Local trading standards officers will deal with the OFT's previous high-profile work in taking on major consumer issues.
BBC business editor Robert Peston said: "The big question is whether local trading standards offices will have the resources or expertise to really challenge the behaviour of giant businesses."
Changes
Some 192 organisations will be abolished in the government's cull of quangos.
This will impact directly on consumers who will see a dilution of some of the groups that offer support and advice.
Continue reading the main story “
Start Quote
It's a huge reform agenda and one which seems in tune with David Cameron's localism and Big Society visions. Does it make sense?”
End Quote
Robert Peston
Business editor, BBC News
--------------------------------------------------------------------------------
Read Robert's blog
They include:
The Consumer Direct helpline - which offers immediate advice and forwards serious cases on to trading standards officers - will be overseen by Citizens Advice rather than the OFT
High-profile consumer right challenges will devolve to local trading standards officers from the OFT
Granting of licences to offer credit to consumers will go to the new Consumer Protection and Markets Authority
Consumer Focus - the government's official consumer watchdog is expected to be scrapped
Both Consumer Focus and Consumer Direct were set up by the previous Labour administration.
Trading standards officers campaigned for the Consumer Direct helpline to ease the pressure on dealing with frontline complaints from consumers - about things such as second-hand car sales - to concentrate on investigating and prosecuting rogue traders.
Thursday, October 14, 2010
Tuesday, June 22, 2010
Budget 2010: Second home owners have generous tax breaks reinstated
The tax advantages on furnished holiday lets were abolished in April by the previous Government, but George Osborne announced they have been reinstated.
One of the main tax reasons for owning a furnished holiday let is that owners can offset any losses against other income, such as employment income.
Related Articles
Budget 2010: key points
Budget 2010: as it happened
Budget 2010: losers
Budget 2010: winners
Budget 2010: VAT - all you need to know Along with cider duty, it was one of the two measures specifically blocked by the Conservatives under the washup after the election was called and the Finance Bill had to be passed into legislation.
Another attractive tax break is that some investors with a capital gain could delay paying their tax bill by investing the proceeds from the sale into a furnished holiday let.
These investors include those selling their businesses or other furnished holiday lets, and commercial farmers.
Naomi Smith, tax manager at Grant Thornton, said: “It is great news for people with a typical holiday home in areas such as Cornwall and Devon as they will continue to enjoy the tax breaks, which in turn helps local economies.
“And it may encourage wealthy professionals to invest in rural locations.”
Accountants warned earlier this year that 20 per cent of home owners with second properties which are let out – the equivalent of 10,000 property investors - will be forced to sell up if the rules were abolished.
They suggested it would also deter those who were thinking about getting a holiday let in the future.
The taxman requires certain conditions to be met before the furnished holiday lettings rules can be applied. The property must be available to let for a total of 140 days in a 12 month period and it must actually be let for at least 70 days during that year. And in any seven month period, the property must not be let out to the same person for a continuous period exceeding 31 days
One of the main tax reasons for owning a furnished holiday let is that owners can offset any losses against other income, such as employment income.
Related Articles
Budget 2010: key points
Budget 2010: as it happened
Budget 2010: losers
Budget 2010: winners
Budget 2010: VAT - all you need to know Along with cider duty, it was one of the two measures specifically blocked by the Conservatives under the washup after the election was called and the Finance Bill had to be passed into legislation.
Another attractive tax break is that some investors with a capital gain could delay paying their tax bill by investing the proceeds from the sale into a furnished holiday let.
These investors include those selling their businesses or other furnished holiday lets, and commercial farmers.
Naomi Smith, tax manager at Grant Thornton, said: “It is great news for people with a typical holiday home in areas such as Cornwall and Devon as they will continue to enjoy the tax breaks, which in turn helps local economies.
“And it may encourage wealthy professionals to invest in rural locations.”
Accountants warned earlier this year that 20 per cent of home owners with second properties which are let out – the equivalent of 10,000 property investors - will be forced to sell up if the rules were abolished.
They suggested it would also deter those who were thinking about getting a holiday let in the future.
The taxman requires certain conditions to be met before the furnished holiday lettings rules can be applied. The property must be available to let for a total of 140 days in a 12 month period and it must actually be let for at least 70 days during that year. And in any seven month period, the property must not be let out to the same person for a continuous period exceeding 31 days
Sunday, June 6, 2010
Small caps outperform FTSE 350 as AIM 100 and AIM All-Share post weekly gains
Small caps performed better than blue chips this week as the FTSE AIM 100 index climbed 0.8% and the FTSE AIM All-Share index added 0.4%.
Clarity Commerce Solutions (LON:CCS) has re-acquired Middlesex-based IT help-desk specialists Cyntergy Services Ltd in a deal worth up to £150,000. According to Clarity, the addition of the previously-owned business unit is expected to significantly enhance Clarity’s prospects in future customer bid processes, and support its growing support the company’s recent new contract wins.
Imperial Innovations Group (LON:IVO) has sold its portfolio company Respivert to Centocor Ortho Biotech for £9.5 million, thus achieving a 4.7x return on Innovations’ three-year investment (ROI).
Proactiveinvestors recommends
Buffett's good news for goldBaobab Resources resumes drilling at Tete iron-vanadium-titanium project North River Resources completes acquisition of Kalahari Minerals’ Copper and Zinc interests in NamibiaSabien Technology (LON:SNT) lost a fifth of its market capitalisation this morning after the manufacturer and supplier energy efficiency technology warned that several key contracts had been delayed in the next financial year.
Invocas Group (LON:INVO) has announced that it no longer desires to be listed on AIM, blaming its decision on the combination of low liquidity in its shares and the high cost to maintain its status as a PLC.
Plant Impact (LON:PIM) has signed a distribution agreement for its InCa calcium delivery product, with Arysta LifeScience’s Mexico-based subsidiary. The 10-year deal gives Arysta exclusive distribution rights for sales and marketing of InCa in Mexico, Guatemala, Costa Rica, El Salvador, Honduras, Dominican Republic, Panama, Belize and parts of the Caribbean.
Managed hosting and cloud computing services company iomart (LON:IOM) declared it was now more established with more recognition of its presence in the market after its revenues for the year to 31 March jumped 55% to help it swing to profits of £3.1 million after making a loss of £0.3 million last year, while also announcing a new £10 million acquisition facility from Lloyds Banking Group (LON:LLOY) that demonstrated its “appetite for growth.”
Antennas manufacturer Sarantel Group (LON:SLG) has signed a letter of intent with Elcoteq SE to outsource its assembly, test and supply chain processes, expecting to generate savings of £0.5 million.
TEG Group (LON:TEG) has agreed to acquire six composting sites of Midlands Simpro for up to £6 million after raising £6.8 million via a share issue to fund the deal, which will boost the number of its operating sites in the UK to ten and increase processing capacity from 115,000 tpa (tonnes per annum) to 295,000 tpa.
Specialist engineering outfit Redhall Group (LON:RHL) reported that its order book had risen to £130 million in the first half of 2010 (six months to 31 March) from £110 million a year earlier.
Rurelec (LON:RUR) called 2009 a year of solid progress after its annual output rose to 2,100 GWh, while revenues jumped 19.5% to £36.16 million, which, however, was overshadowed by the recent nationalisation of its Bolivian assets, leaving the company with an interest in Argentina operating subsidiary Energia del Sur.
Medical technology group, Oxeco (LON:OXE) has agreed the terms of a conditional acquisition of Tissue Regenix in a share-based deal valued at £12 million. According to Oxeco Chairman, Michael Bretherton, the deal represents an exciting new start for the company.
In its preliminary results, Specialist vehicle distributor, Eco City Vehicles (AIM:ECV) told investors that strong demand for its co-developed Mercedes Vito taxis has driven a 30% increase in revenues to £24.7m (2008: £19m). As the company closed the year with the sale of its 500th Vito taxi - selling 398 units in 2009 - Eco City decided to up production at its Coventry manufacturing base in 2010.
Cancer focused biotechnology company, Antisoma (LON:ASM, OTC: ATSMY) told investors that its novel leukaemia treatment – the AS1413 DNA intercalator – has been granted a Fast Track designation by the US Food and Drug Administration (FDA).
University commercialisation specialist, the IP Group’s (LSE:IPO) portfolio company Tissue Regenix has agreed a reverse takeover with medical technology group Oxeco (AIM: OXE).
Allocate Software (LON:ALL) has won a A$6 million (£3.3m) contract with the State Government of New South Wales (NSW), Australia to supply its Healthroster software across the state public health system, which covers more than 90,000 members of staff.
Interactive gaming company NetPlay TV (LON:NPT) said the “pivotal” 2009 saw its transformation from a “small opportunistic gaming company” into a “fully fledged media business” after regulator Ofcom opened up a potentially huge market by allowing terrestrial broadcasters to air transactional gaming shows.
Innovision Research & Technology (LON:INN) has signed its second significant new contract for its GEM NFC Intellectual Property in the current financial year, reaching an agreement with another major global semiconductor corporation over chips that it said were targeted at high volume markets for mobile handsets and other consumer electronic products incorporating wireless communications.
Penna Consulting (LON:PNA) called 2009/10 a “very successful year,” which saw revenues soar 72% as profits jumped 22%, yet a repeat is unlikely this year due to a recently announced freeze in public sector hiring. Despite the strong financial results shares in the company tumbled 40%.
South Africa operating power producer IPSA Group (LON:IPSA) said it was making progress since its last results announcement and that its interim results for the period to 31 March were broadly in line with expectations after the net losses shrank to £0.83 million from £3.4 million.
Helius Energy (LON:HEGY) has appointed founder and chairman of integrated waste management company Specialist Waste Recycling Ltd Angus MacDonald to the board as a non-executive director and as a member of the company’s audit and remuneration committees.
Clarity Commerce Solutions (LON:CCS) has re-acquired Middlesex-based IT help-desk specialists Cyntergy Services Ltd in a deal worth up to £150,000. According to Clarity, the addition of the previously-owned business unit is expected to significantly enhance Clarity’s prospects in future customer bid processes, and support its growing support the company’s recent new contract wins.
Imperial Innovations Group (LON:IVO) has sold its portfolio company Respivert to Centocor Ortho Biotech for £9.5 million, thus achieving a 4.7x return on Innovations’ three-year investment (ROI).
Proactiveinvestors recommends
Buffett's good news for goldBaobab Resources resumes drilling at Tete iron-vanadium-titanium project North River Resources completes acquisition of Kalahari Minerals’ Copper and Zinc interests in NamibiaSabien Technology (LON:SNT) lost a fifth of its market capitalisation this morning after the manufacturer and supplier energy efficiency technology warned that several key contracts had been delayed in the next financial year.
Invocas Group (LON:INVO) has announced that it no longer desires to be listed on AIM, blaming its decision on the combination of low liquidity in its shares and the high cost to maintain its status as a PLC.
Plant Impact (LON:PIM) has signed a distribution agreement for its InCa calcium delivery product, with Arysta LifeScience’s Mexico-based subsidiary. The 10-year deal gives Arysta exclusive distribution rights for sales and marketing of InCa in Mexico, Guatemala, Costa Rica, El Salvador, Honduras, Dominican Republic, Panama, Belize and parts of the Caribbean.
Managed hosting and cloud computing services company iomart (LON:IOM) declared it was now more established with more recognition of its presence in the market after its revenues for the year to 31 March jumped 55% to help it swing to profits of £3.1 million after making a loss of £0.3 million last year, while also announcing a new £10 million acquisition facility from Lloyds Banking Group (LON:LLOY) that demonstrated its “appetite for growth.”
Antennas manufacturer Sarantel Group (LON:SLG) has signed a letter of intent with Elcoteq SE to outsource its assembly, test and supply chain processes, expecting to generate savings of £0.5 million.
TEG Group (LON:TEG) has agreed to acquire six composting sites of Midlands Simpro for up to £6 million after raising £6.8 million via a share issue to fund the deal, which will boost the number of its operating sites in the UK to ten and increase processing capacity from 115,000 tpa (tonnes per annum) to 295,000 tpa.
Specialist engineering outfit Redhall Group (LON:RHL) reported that its order book had risen to £130 million in the first half of 2010 (six months to 31 March) from £110 million a year earlier.
Rurelec (LON:RUR) called 2009 a year of solid progress after its annual output rose to 2,100 GWh, while revenues jumped 19.5% to £36.16 million, which, however, was overshadowed by the recent nationalisation of its Bolivian assets, leaving the company with an interest in Argentina operating subsidiary Energia del Sur.
Medical technology group, Oxeco (LON:OXE) has agreed the terms of a conditional acquisition of Tissue Regenix in a share-based deal valued at £12 million. According to Oxeco Chairman, Michael Bretherton, the deal represents an exciting new start for the company.
In its preliminary results, Specialist vehicle distributor, Eco City Vehicles (AIM:ECV) told investors that strong demand for its co-developed Mercedes Vito taxis has driven a 30% increase in revenues to £24.7m (2008: £19m). As the company closed the year with the sale of its 500th Vito taxi - selling 398 units in 2009 - Eco City decided to up production at its Coventry manufacturing base in 2010.
Cancer focused biotechnology company, Antisoma (LON:ASM, OTC: ATSMY) told investors that its novel leukaemia treatment – the AS1413 DNA intercalator – has been granted a Fast Track designation by the US Food and Drug Administration (FDA).
University commercialisation specialist, the IP Group’s (LSE:IPO) portfolio company Tissue Regenix has agreed a reverse takeover with medical technology group Oxeco (AIM: OXE).
Allocate Software (LON:ALL) has won a A$6 million (£3.3m) contract with the State Government of New South Wales (NSW), Australia to supply its Healthroster software across the state public health system, which covers more than 90,000 members of staff.
Interactive gaming company NetPlay TV (LON:NPT) said the “pivotal” 2009 saw its transformation from a “small opportunistic gaming company” into a “fully fledged media business” after regulator Ofcom opened up a potentially huge market by allowing terrestrial broadcasters to air transactional gaming shows.
Innovision Research & Technology (LON:INN) has signed its second significant new contract for its GEM NFC Intellectual Property in the current financial year, reaching an agreement with another major global semiconductor corporation over chips that it said were targeted at high volume markets for mobile handsets and other consumer electronic products incorporating wireless communications.
Penna Consulting (LON:PNA) called 2009/10 a “very successful year,” which saw revenues soar 72% as profits jumped 22%, yet a repeat is unlikely this year due to a recently announced freeze in public sector hiring. Despite the strong financial results shares in the company tumbled 40%.
South Africa operating power producer IPSA Group (LON:IPSA) said it was making progress since its last results announcement and that its interim results for the period to 31 March were broadly in line with expectations after the net losses shrank to £0.83 million from £3.4 million.
Helius Energy (LON:HEGY) has appointed founder and chairman of integrated waste management company Specialist Waste Recycling Ltd Angus MacDonald to the board as a non-executive director and as a member of the company’s audit and remuneration committees.
Monday, May 24, 2010
Asian consumers most upbeat, India consumer sentiment highest - Nielsen
Consumer confidence is strongest in emerging Asia Pacific and Latin America, while most Europeans remain edgy on the pace of their economic recovery and the euro zone debt crisis, a global survey showed on Thursday.
Consumer sentiment was highest in India, followed by Indonesia and Norway, according to the survey conducted by the New York-based Nielsen Company in March.
Globally, the Nielsen Global Consumer Confidence Index averaged a reading of 92 points in the first quarter, six points higher than in the third quarter of 2009 and the highest level since the third quarter of 2007.
All regions saw improvement in consumer confidence, but the gap in the pace of economic recovery widened between the booming Asia Pacific and Latin American countries compared to the
sluggish recovery in the United States and western Europe.
"Asia Pacific consumers who were among the first to cut back drastically on discretionary spending 18 months ago are now confident enough to spend their way out of recession," said Venkatesh Bala, chief economist of Nielsen's Cambridge Group.
In China, consumer confidence rebounded to 108 points from 101 six months ago, matching a record reached in the first quarter of 2005.
"Key economic indicators in China all point to a continued strong recovery in 2010," said Chris Morley, a managing director of Nielsen.
Consumer sentiment was highest in India, followed by Indonesia and Norway, according to the survey conducted by the New York-based Nielsen Company in March.
Globally, the Nielsen Global Consumer Confidence Index averaged a reading of 92 points in the first quarter, six points higher than in the third quarter of 2009 and the highest level since the third quarter of 2007.
All regions saw improvement in consumer confidence, but the gap in the pace of economic recovery widened between the booming Asia Pacific and Latin American countries compared to the
sluggish recovery in the United States and western Europe.
"Asia Pacific consumers who were among the first to cut back drastically on discretionary spending 18 months ago are now confident enough to spend their way out of recession," said Venkatesh Bala, chief economist of Nielsen's Cambridge Group.
In China, consumer confidence rebounded to 108 points from 101 six months ago, matching a record reached in the first quarter of 2005.
"Key economic indicators in China all point to a continued strong recovery in 2010," said Chris Morley, a managing director of Nielsen.
Monday, April 26, 2010
Emergency loans likely for Greece, official says
A top Greek economic official sought to shore up confidence among investors that Greece would avert a crippling debt default by securing billions of dollars in emergency loans from European countries and the International Monetary Fund.
Greek Finance Minister George Papaconstantinou also warned market speculators "they will lose their shirts" by betting against Greece.
Papaconstantinou said in his Washington news conference on Sunday that he had no doubt that at the end of intensive negotiations that are continuing Monday in Athens and over the next two weeks, Greece will win the loan support it needs from both the European countries and the IMF.
"We are all confident that this will be done in time and we will continue to be able to finance Greek public debt without absolutely any problem," Papaconstantinou told reporters.
Papaconstantinou said he expected the IMF board would approve its portion of the loan support within the first 10 days of May and that approval would be in time to meet a payment of $11.3 billion on Greek bonds due on May 19.
He said that he expected the support from the IMF and the European governments to be provided at the same time but he said if some European parliaments were delayed in approving their contributions, the IMF support could be used to obtain bridge financing from other sources.
Greece is hoping to obtain emergency loans of about $40 billion from the group of 16 European countries that, like Greece, use the euro as a common currency, and an additional $13.4 billion from the IMF.
The Greek government has already agreed to put in place painful austerity measures to trim government spending and public pensions, but it was likely that the IMF and the euro-zone governments will require even tougher measures in return for assistance.
The IMF's managing director, Dominique Strauss-Kahn, expressed similar optimism, saying the IMF and European government recognized the "need for speed" because of Greece's escalating problems and the adverse impact it was having on financial markets around the world.
"We are all aware of the seriousness of the situation and the courageous efforts being made by the Greek people," Strauss-Kahn said in a statement.
Greece's debt crisis weighed heavily on financial leaders as they wrapped up a series of financial meetings that began Friday with discussions among the Group of 20 major economic nations, including wealthy industrial countries and rising economic powers such as China, India, Brazil and South Korea.
In response to the global economic crisis that struck in 2008, the G-20 has been designated the key forum for economic coordination among countries, taking over a role that had been performed for three decades by the Group of Seven richest countries.
In response to the rising clout of such nations as China, the World Bank on Sunday approved a realignment of its voting shares, which boosted China into the No. 3 spot behind the United States and Japan. The change put China ahead of traditional economic powers Germany, France and Britain in a dramatic sign of China's new status as the world's third largest economy. The change also increased the voting power of developing nations from 44 percent of total votes to 47 percent.
Greek Finance Minister George Papaconstantinou also warned market speculators "they will lose their shirts" by betting against Greece.
Papaconstantinou said in his Washington news conference on Sunday that he had no doubt that at the end of intensive negotiations that are continuing Monday in Athens and over the next two weeks, Greece will win the loan support it needs from both the European countries and the IMF.
"We are all confident that this will be done in time and we will continue to be able to finance Greek public debt without absolutely any problem," Papaconstantinou told reporters.
Papaconstantinou said he expected the IMF board would approve its portion of the loan support within the first 10 days of May and that approval would be in time to meet a payment of $11.3 billion on Greek bonds due on May 19.
He said that he expected the support from the IMF and the European governments to be provided at the same time but he said if some European parliaments were delayed in approving their contributions, the IMF support could be used to obtain bridge financing from other sources.
Greece is hoping to obtain emergency loans of about $40 billion from the group of 16 European countries that, like Greece, use the euro as a common currency, and an additional $13.4 billion from the IMF.
The Greek government has already agreed to put in place painful austerity measures to trim government spending and public pensions, but it was likely that the IMF and the euro-zone governments will require even tougher measures in return for assistance.
The IMF's managing director, Dominique Strauss-Kahn, expressed similar optimism, saying the IMF and European government recognized the "need for speed" because of Greece's escalating problems and the adverse impact it was having on financial markets around the world.
"We are all aware of the seriousness of the situation and the courageous efforts being made by the Greek people," Strauss-Kahn said in a statement.
Greece's debt crisis weighed heavily on financial leaders as they wrapped up a series of financial meetings that began Friday with discussions among the Group of 20 major economic nations, including wealthy industrial countries and rising economic powers such as China, India, Brazil and South Korea.
In response to the global economic crisis that struck in 2008, the G-20 has been designated the key forum for economic coordination among countries, taking over a role that had been performed for three decades by the Group of Seven richest countries.
In response to the rising clout of such nations as China, the World Bank on Sunday approved a realignment of its voting shares, which boosted China into the No. 3 spot behind the United States and Japan. The change put China ahead of traditional economic powers Germany, France and Britain in a dramatic sign of China's new status as the world's third largest economy. The change also increased the voting power of developing nations from 44 percent of total votes to 47 percent.
Tuesday, March 30, 2010
Friday, March 19, 2010
South China's industrial heartland of Guangdong to raise minimum wage by average of 21% to range of $96 to $150 a month
The minimum wage in South China's industrial heartland Guangdong Province, is to be raised by 21 per cent on average to a range from RMB 660 renminbi to 1,030 ($96 to $ 150) a month from May 1st in a bid to attract migrant workers, local authorities said Thursday.
Guangdong, north of Hong Kong, in the Pearl River delta region, which is responsible for a third of China’s exports and would rank as one of the world’s 10 largest exporters if it were a country, is finding it harder to attract migrant labour as other regions develop. So on Thursday, it was announced by the Guangdong Provincial Human Resources and Social Security Department that the minimum wage of both full-time and part-time workers will be raised.
The adjusted minimum wage is divided into five categories ranging from RMB660 to 1,030 yuan/renminbi ($96 to $ 150) a month, depending on the financial situation in different cities in the province. The move came a month after the country's second biggest exporter, Jiangsu Province, raised its minimum wage by about 12 per cent to 960 yuan ($140.64) from the current 850 yuan ($124). East China's Fujian Province increased its minimum wage by 24.5 per cent from March 1st. China is making huge investments in its rail network and last December, it launched the world’s fastest passenger train service between Guangzhou, Guangdong's provincial capital, and the central city of Wuhan, covering 1,100km in just three hours. The railway investment will result in more balanced regional development.
"A 20 per cent raise is a big jump because many other provinces offer around 10 per cent. That's because Guangdong wants to stand out from among other competitors," Lü Xuejing, professor of social security at Capital University of Economic Business, told the Global Times Thursday.
"However, I don't think the adjustment is attractive enough as it doesn't make much of a difference to work as a farmer at home or as a migrant worker far from home in Guangdong," she said.
She explained that the higher minimum wage might attract some older migrant workers but won't appeal to skilled workers who are less willing to do manual work.
According to the Beijing Times, Beijing will raise its monthly minimum wage levels by 10 per cent from the current RMB 800 ($117.2) possibly next month.
Wage pressure is coinciding with pressure on China to raise the value of its currency.
"It is unfair and harmful to continuously depreciate a country's own currency and ask other countries to revalue their currencies in the meantime," Foreign Ministry spokesman Qin Gang said at a regular press conference on Thursday in Beijing.
The China Business News news service reported Friday that the Ministry of Commerce and the Ministry of Industry and Information Technology are expected to disclose the results of a study on the effects of yuan exchange-rate appreciation on exporters by April 27th..
Zhang Wei, deputy director of the China Chamber of International Commerce, is quoted as saying the Ministry of Commerce's yuan stress test involves over 1,000 companies in 12 industries.
Zhang Wei, vice chairman of the China Council for the Promotion of International Trade, said at a press briefing in Beijing on Thursday that exporters in labour-intensive sectors such as garments and furniture worked on margins as low as 3 per cent, he said. "If the yuan rises, these companies will face the immediate risk of going bust as their profit margin is already very narrow," Zhang told reporters. "So for these companies, the consequences would be disastrous."
Guangdong, north of Hong Kong, in the Pearl River delta region, which is responsible for a third of China’s exports and would rank as one of the world’s 10 largest exporters if it were a country, is finding it harder to attract migrant labour as other regions develop. So on Thursday, it was announced by the Guangdong Provincial Human Resources and Social Security Department that the minimum wage of both full-time and part-time workers will be raised.
The adjusted minimum wage is divided into five categories ranging from RMB660 to 1,030 yuan/renminbi ($96 to $ 150) a month, depending on the financial situation in different cities in the province. The move came a month after the country's second biggest exporter, Jiangsu Province, raised its minimum wage by about 12 per cent to 960 yuan ($140.64) from the current 850 yuan ($124). East China's Fujian Province increased its minimum wage by 24.5 per cent from March 1st. China is making huge investments in its rail network and last December, it launched the world’s fastest passenger train service between Guangzhou, Guangdong's provincial capital, and the central city of Wuhan, covering 1,100km in just three hours. The railway investment will result in more balanced regional development.
"A 20 per cent raise is a big jump because many other provinces offer around 10 per cent. That's because Guangdong wants to stand out from among other competitors," Lü Xuejing, professor of social security at Capital University of Economic Business, told the Global Times Thursday.
"However, I don't think the adjustment is attractive enough as it doesn't make much of a difference to work as a farmer at home or as a migrant worker far from home in Guangdong," she said.
She explained that the higher minimum wage might attract some older migrant workers but won't appeal to skilled workers who are less willing to do manual work.
According to the Beijing Times, Beijing will raise its monthly minimum wage levels by 10 per cent from the current RMB 800 ($117.2) possibly next month.
Wage pressure is coinciding with pressure on China to raise the value of its currency.
"It is unfair and harmful to continuously depreciate a country's own currency and ask other countries to revalue their currencies in the meantime," Foreign Ministry spokesman Qin Gang said at a regular press conference on Thursday in Beijing.
The China Business News news service reported Friday that the Ministry of Commerce and the Ministry of Industry and Information Technology are expected to disclose the results of a study on the effects of yuan exchange-rate appreciation on exporters by April 27th..
Zhang Wei, deputy director of the China Chamber of International Commerce, is quoted as saying the Ministry of Commerce's yuan stress test involves over 1,000 companies in 12 industries.
Zhang Wei, vice chairman of the China Council for the Promotion of International Trade, said at a press briefing in Beijing on Thursday that exporters in labour-intensive sectors such as garments and furniture worked on margins as low as 3 per cent, he said. "If the yuan rises, these companies will face the immediate risk of going bust as their profit margin is already very narrow," Zhang told reporters. "So for these companies, the consequences would be disastrous."
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