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China must lift the incomes of workers to protect stability, the country's top official paper said on Thursday, after the latest in a series of labour disputes briefly closed a supplier for Toyota Motor Corp.The Toyoda Gosei plant, in the northern port city of Tianjin close to Beijing, was shut down on Tuesday by a strike but employees went back to work the next day after managers agreed to discuss wage increases, a company spokesman said.The firm, 43 percent owned by Toyota Motor and a supplier of items such as door components for compact cars, has not fallen behind its production schedule because it cancelled a holiday on Wednesday, the spokesman said.A Toyota Motor spokeswoman also said her company keeps some spare parts in inventory to allow it to cope with unexpected situations at its main auto plants in Tianjin.A rash of walkouts in recent weeks has paralysed several factories across China. The unusual display of worker assertiveness is sensitive for the ruling Communist Party, which fears movements that could undermine its legitimacy or grip on power.The commentary on treatment of migrant workers in the People's Daily newspaper, which acts as a channel for government thinking, did not mention the strikes.But echoing comments by Chinese Premier Wen Jiabao earlier in the week, its author said the time had come to narrow the gulf between rich and poor, which it added was stifling consumer demand.The "made-in-China" model is "facing a turning point," said the newspaper. It urged improved conditions for the migrant workers whose cheap labour has powered China's export-led growth."What is important is achieving a relatively big improvement in the lives of ordinary people, especially wage labourers and their families," added Tang Jun, a social policy researcher at the Chinese Academy of Social Sciences, a government think tank.Also on Thursday, a branch of U.S. fast food restaurant KFC signed a collective labour contract in which it agreed to raise minimum wages by 200 yuan ($29.27) a month, as demanded by a local trade union, the official Xinhua agency said.For a graphic on China's labour unrest, clickhttp://graphics.thomsonreuters.com/10/CN_STRKS0610.gifSOUTH CHINA WOESThe highest profile stoppage has been at a factory in southern Guangdong province that makes locks for Honda Motor vehicles, where hundreds of employees have returned to work after days of protests, pending an outcome from wage negotiations on Friday.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.This week, Premier Wen also urged better treatment of the nation'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 Honda Lock 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, although analysts say there is little danger of it sparking a more powerful workers rights movement."There is a small risk that such disputes could spiral out of control, but an even smaller risk that they will lead to wider political instability," Eurasia Group analyst Michal Meidan wrote in a recent note.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 to service jobs.That shift will also require giving workers thicker pay packets to spend on consumption and services, said the paper.(Additional reporting by Fang Yan in SHANGHAI and Yumiko Nishitani in TOKYO; Editing by Sanjeev Miglani)(For more business news on Reuters India click http://in.reuters.com)
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