Rising wages in China's Pearl River Delta area have sparked concerns that the nation is losing its cost advantage and will lose orders, but Commerce Minister Chen Deming said the impact would be limited.

"A small proportion of the contracts may be transferred to countries with lower costs, but China has yet to lose its labor cost advantage," Chen said on Friday.

To address rising costs and keep their advantage in the international market, companies should climb the value ladder in design and marketing, he said.

Companies should also consider moving to western regions of the country or to nations with lower labor costs, Chen said.

The Chinese government has established a training center in Kunshan, Jiangxi province, to assist companies considering such transfers.

Some companies could move their operations to the place of origin of their raw materials through overseas investment, Chen said on the sidelines of a training course for government officials from Mozambique on the development of China's economic zones.

The 10-day course was suggested by Mozambican President Armando Guebuza and attended by 26 vice-ministers from the country.

"African countries are facing the opportunity of rapid growth, as some emerging economies plan to transfer their labor-intensive industries," Chen said.

Chen shared China's 30 years' experience in creating a better investment environment by establishing economic zones.

He said it is important to take environmental protection and urbanization into consideration when planning economic development.

(China Daily June 19, 2010)