Yoshitsugu Murakami, a spokesman for Mitsumi, the Toyko listed holding company which owns the factory, confirmed that a strike was taking place but had no details on why the workers walked off the job or by how much production had been hit.

The striking workers have demanded higher wages and improved benefits, China's official Xinhua news agency reported on Wednesday.

One factory labourer told Xinhua that he earned the equivalent of $220 per month after working six days a week and regular overtime.

Police guarded the Mitsumi plant and stopped reporters from speaking to workers inside, underscoring fears from China's single party state that labor unrest could challenge its grip on power.

China's domestic media has been largely mute about this and other strikes, although unrest has been covered in English by the Xinhua news agency.

Strikes effective

The increasing frequency of strikes may be due to their effectiveness, particularly in foreign owned auto-manufacturing plants.

Japanese companies, with their tight supply chains, seem to be particularly vulnerable to industrial action.

After a three week work stoppage and violent clashes, management at a Honda parts factory in Foshan offered a 24 per cent pay hike to 1,900 striking workers, most of whom returned to work on June 4. 

On June 25, Toyota Motor Corp said it planned to resume production at its 360,000 units-a-year joint venture auto plant in Guangzhou, after three days of strikes.

"There is no way to see the future with the wage we are making"

Zhang, 22-year-old factory worker

Some analysts are also concerned that demands for higher wages could erode China's competitiveness as the world's low cost factory.

Domestic demand

Other economists believe wages in China have been too low for too long and higher wages will actually boost long-term growth, by fostering domestic demand rather than forcing China to rely on foreign exports.

China's first generation of migrant factory workers managed to send a little money home to their families in the country's hinterlands, despite their low wages.

But the young workers of today say that rising inflation and soaring housing prices make basic survival difficult and remittances are a luxury they cannot afford.

"There is no way to see the future with the wage we are making. Living and working like this, my life has no direction," Zhang, a 22-year-old welder who works at a factory making exhaust systems for Honda said.

"I dream of one day buying a car or an apartment, but with the salary I'm making now, I will never succeed."