More than 12 provinces and municipalities in the country have raised their minimum wages by about 20 percent, with the average minimum set in all eight provinces in East and South China exceeding 1,000 yuan a month. The minimum wage in Guangzhou has been set at 1,300 yuan a month.

The rising cost of labor is just one of the many challenges that Zengcheng's denim sector is facing as Guangdong's low-cost manufacturers strive to move up the value chain in line with efforts to upgrade its economy.

Guangdong has topped the country's GDP for 22 years consecutively, with economic output reaching more than 4.5 trillion yuan in 2010, sources with the Guangdong Provincial Statistics Bureau said.

But apart from higher wages, Guangdong's authorities and businesses are becoming increasingly aware of the need to move away from the primary sector to answer calls to improve the welfare of workers and the environment.

Those are exactly the priorities that Xintang jeans manufacturer Conshing Group says it is pursuing.

The group is one of the biggest players in the industry. The original design manufacturer employs about 3,000 workers on its 32-hectare site and owns two major domestic brands, Conshing and Hitwon, that help reap about 300 million yuan a year from the home market.

The 20-year-old company operates facilities for the whole process of jeans production, from designing, cutting and sewing, to washing. It has the capacity to churn out more than 50,000 pairs of jeans a day that are also sold under foreign brands such as Polo, Lee, Guess and Abercrombie & Fitch.

"We are already a leader in the field and economic success is not our sole aim," says Wu Xiulan, Conshing's human resources and administration manager.

"We also place a lot of emphasis on the welfare of our workers and their working environment."

Wu says her company sets aside half of its area for greenery to improve the living conditions for workers. Major walkways are covered and cooled by misting systems to help relieve workers from the subtropical heat.

Most of its employees come from 20 provinces across the country and stay in company flats. There are also individual ceiling fans and air-circulation ducts for workers in its factories.

The company has invested heavily in water treatment facilities to reduce the impact its operations have on the surrounding area.

"Washing the jeans is a key part of production and other companies also use our facilities to wash their products. That is why water resources are so important and why we are minimizing our footprint on the environment," Wu says.

Conshing's water treatment facilities recycle nearly 70 percent of the 9,000 tons of water it uses to wash jeans every day, on top of the 2,500 tons of fresh water it pumps to the area. Five hectares of land is also set aside to contain treated water that is used to rear fish, ducks, shrimp and other flora and fauna.