PORT workers at billionaire Li Ka-shing's Hongkong International Terminals Ltd ended the longest strike at Hong Kong's container terminal as they accepted a 9.8 percent wage increase, resolving a dispute that damaged the city's reputation as a trade hub.

The union will discuss arrangements for workers to return to the port, Chan Chiu-wai, organizer at the Union of Hong Kong Dockers, said yesterday. Workers had earlier demanded a 23-percent rise, while employers offered a 7-percent gain.

The agreement ends the biggest labor action against Asia's richest man, in which about 450 dock workers, crane operators and stevedores, walked out on March 28 demanding higher wages and better working conditions. The 40-day strike at the world's third-largest container port spurred shipping lines to divert vessels to nearby Chinese ports, highlighting the rising competition Hong Kong faces as costs escalate.

"The weak bargaining power and poor work conditions revealed by the strike could deter young people from working in the industry," said Geoffrey Cheng, an analyst at the Bank of Communications. "It is time for the government to think about its role and what it can really do for Hong Kong, which is already under threat amid rising competition."

The workers, hired by contractors, will get an increase in wages from HK$55 (US$7.1) per hour. The docks were operating at about 90 percent of capacity in the last week of April after new employees were hired and some strikers returned to work.

HIT is operated by Hutchison Port Holdings Trust, whose largest shareholder is Li's Hutchison Whampoa Ltd. Hutchison Port, along with partner COSCO Pacific Ltd, dominates half of the capacity at Hong Kong's port. Hutchison Whampoa has interests in 52 ports globally from Panama to the Netherlands.

Terminals controlled by Hutchison Port also have a 46 percent market share in Shenzhen, where shipping lines including Evergreen Marine Corp Taiwan Ltd diverted vessels because of the strike in Hong Kong.

"It's surprising that the strike lasted for such a long time, which damaged Li's reputation," said Lawrence Li, an analyst at UOB-Kay Hian Holdings Ltd. Still, the financial impact on the port operator is "insignificant," he said.

The dockers were demanding higher wages as rising living costs and record home prices spur discontent.