Zhejiang, situated south of Shanghai, will increase the minimum monthly salary to 1,310 yuan ($200), the Xinhua news agency said, citing a statement from the provincial government.

Factories in China's relatively affluent eastern coastal areas have had to increase wages to attract migrant workers from other parts of the country, as the development of the interior makes more jobs available to them closer to their home towns, where the cost of living is lower.

While most factory workers make more than the minimum wage already, the degree of the increase offers an indication of the extent of the upward pressure on salaries, as workers faced with rising food prices and other costs demand higher pay.

Cities and provinces throughout the country have steadily increased minimum wages over the past decade, but the gains have picked up momentum in the last year.

The minimum wage in the capital, Beijing, went up by 21 percent from the start of this year, while Shanghai this week announced a 14 percent increase starting in April.

China's top leadership has repeatedly pledged that it will increase labour's share of national income as part of efforts to stimulate greater consumption.

Underlining those concerns, Premier Wen Jiabao said on Saturday in China's version of a "State of the Union" address that the government aimed to increase incomes by 7 percent a year over the next five years, while keeping inflation in check.