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Another Labour NGO Shut Down in Guangdong
Even during the summer, the Chinese authorities have kept up their campaign against labour activists. At the end of June, the civil affairs bureau of Panyu, Guangzhou, informed the leaders of labour NGO Xiangyanghua that they had to shut down their organisation as its registration had been cancelled.
The campaign of the Chinese authorities against labour NGOs has claimed a new victim. On June 23rd, the activists of Xiangyanghua (“Sunflower Social Service Centre”), an NGO based in Panyu District, Guangzhou, were informed by the local civil affairs bureau that they had to shut down their organisation as its official registration had been revoked. The Centre was established at the end of 2011 and was regularly registered as a non-profit enterprise in August 2012, in a period of relative relaxation of the registration procedures for civil society organisations in Guangdong Province. Xiangyanghua mostly carried out recreational activities aimed at female migrant workers, as movie screenings, computer classes, forums and seminars meant to enhance the workers’ awareness on matters related to female health and labour rights. Since the end of 2012, the organisation has widened the scope of its action to collective labour disputes, stepping in on several occasions to assist the workers in their negotiations with the management. This new militancy may have caused the wrath of the local authorities, as can be seen from the fact that since 2013 the Centre has been forced to relocate three times. The closure notice was delivered at a critical time for the activists of Xiangyanghua, as they were struggling after having been evicted once again from their office. Ironically, one of the reasons adduced by the authorities for the repeal of the registration was the “absence of a steady work premise”. The activists have appealed the decision.
(Sources: Shegong Shibao, Global Times)
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Foxconn Announces Massive Investment in India
During the summer, the Taiwanese electronic giant was back in the spotlight for two suspicious deaths in its Zhengzhou plant. At the same time, the company has announced plans for new massive investments in India, triggering speculations on the future of China as a manufacturing hub.
During the summer Foxconn was back in the spotlight. On August 4th, an employee killed himself jumping from a building in a plant in Zhengzhou. Three days later, a female worker was found dead on the ground outside some apartments owned by the company in the same city, fuelling rumours of another desperate gesture. In the meanwhile, on August 8th the Taiwanese electronic giant announced the signature of a memorandum of understanding with the Indian state of Maharashtra for a five billion dollar investment over five years. Terry Gou, the company’s chairman, declared that the new plant will focus on research and development and production and that it will employ at least 50,000 workers. This will be only a first step in the consolidation of the company’s presence in India, as Foxconn executives unveiled plans to build 10 to 12 new factories in the country within 2020, a move which should create one million new job opportunities. These developments have triggered speculations about the future of China as a manufacturing hub. According to a report by the Boston Consulting Group quoted by the Chinese magazine Di Yi Caijing Ribao, production costs in China are now almost equal to those in the United States – for a same merchandise produced in the US for one dollar, the cost in China is 0.96 dollars. The report identifies three main reasons behind this loss of competitiveness: rising wages, the appreciation of the Chinese Yuan to the USD, and escalating energy costs.
(Sources: Hindustan Times, Di Yi Caijing Ribao, China Labor Watch)
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New measures to boost domestic consumption unveiled
While the economy is slowing down, the Chinese government tries to boost domestic consumption. Not only fourteen Chinese provinces and cities have already raised the minimum wage for 2015, but in the past couple of months the Chinese authorities have also unveiled new policies to support the entrepreneurship of migrant workers and have required that employers grant their employees two and a half days off every week.
While the economy is slowing down, the Chinese authorities unveil new measures in the attempt to boost internal consumption. In early July, fourteen Chinese provinces and cities (Hunan, Hainan, Tibet, Tianjin, Shenzhen, Shandong, Shaanxi, Beijing, Guangdong, Shanghai, Gansu, Shanxi, Sichuan and Inner Mongolia) had raised the minimum wage for 2015. Among these, Shenzhen had elevated the monthly minimum wage to 2,030 yuan, exceeding for the first time in China the important psychological threshold of two thousand yuan. This was accompanied by new policies of the central government aimed at boosting the entrepreneurship of migrant workers. In particular, on June 21st the State Council published a new policy document that outlines a set of measures to support migrants who desire to go back to their rural hometowns to open a business. Still, it was another document, titled “Some Opinions on Further Stimulating Investment and Boosting Consumption in the Tourism Industry” that made headlines. In this policy paper, published on August 11th, the Chinese authorities invited employers to grant their employees two and a half days off every week in order to allow them to travel and, naturally, to spend. In a country in which overtime is the order of the day and, all too often, workers have to work also in the weekend with only one or two days off every month, this proposal was met with considerable scepticism.
(Sources: Laodongfa Pindao, Gov.cn, Gov.cn)
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Strikes in Manufacturing: from offensive to defensive?
Kevin Lin - University of Technology, Sydney
In the past year, China’s slowing economy and the weakening of the Chinese export sector have brought around an upsurge of strikes related to factory relocations. Now that the Chinese workers are struggling to get severance payments and compensation for previously unpaid social insurance and housing contributions, will the militancy of the new Chinese labour movement be affected?
China’s slowing economy, with a weakening export sector, has framed the recent wave of labour protests in the manufacturing sector. Whilst the official figure puts China’s annual growth rate at a steady 7 per cent, there are visible signs of economic distress with weakening industrial activities. Allowing the Chinese currency to devalue within a wider margin in August signifies the government’s attempt to boost a fledging export economy.
The economic slowdown is contributing to a long-term trend of capital relocation both within industrial regions and from the southern coast to the interior due to rising wages and labour unrest. The result is an upsurge of strikes following planned factory relocation and closure. Workers demand severance payment as well as compensation for years of unpaid social insurance and housing fund contribution.
The last column focused on one such case. Workers at the Lide Footwear Company went on strike in late 2014 after they heard about rumours of relocation. Many were unwilling to relocate with the company, and instead wanted severance payment and other compensations. The management’s refusal to negotiate fairly with workers led to strikes and negotiations over many months. This is in contrast to the generally shorter strikes mostly over days and at most over weeks. It was not until mid-2015 that the Lide workers were finally able to win most of their demands from management.
Over the same period, another similar case has drawn media coverage as a result of company role as a contractor for the Japanese clothing retailer Uniqlo, which has over four hundred stores in China. The Shenzhen Artigas Clothing and Leather Company, established in 1992 with Hong Kong investment, has been oriented primarily to export. In 2014, it planned relocation to another industrial park without consultation or negotiation with workers, sparking a 9-day strike in December which ended by police suppression.
On June 9 this year, as the company tried to shut down the factory and remove equipment, over nine hundred workers took matters into their own hands by occupying the shopfloor to prevent management from closing down the factory. They demand negotiation on severance payment and compensation. Unpaid social insurance, in particular, has become a significant issue in such strikes, as many workers have worked at the same factory for more than a decade. Some went on hunger strike. Heavy-handed tactics were used against workers, including harassment and detention of striking workers by the local police.
Only under three weeks of persistent factory occupation did management finally agree to negotiation. However, it refused to hold collective negotiation and only wanted to deal with workers on an individual basis. Workers rejected the management’s attempt to divide workers, and continued the strike.
As the strike entered into deadlock, about two hundred workers travelled to Guangzhou and staged a regular protest at the Guangdong Provincial Government. After days of protesting and sleeping in a nearby park, they were forcefully removed and briefly detained by police. Management also stepped up pressure on the remaining workers occupying the factory by cutting off utilities. Eventually, workers were locked out of the factory, as enforced by police presence.
These two cases, and other similar strikes in recent months, reflect the deleterious impact of slowing export sector on manufacturing workers. Companies operating on thin profit margins have opted to relocate, scale down production and cut labour costs. In response, workers’ protests have often taken the form of repeated work stoppages, factory occupation and collective negotiations with management over months.
The key feature of these strikes is the development of sustained mobilisation and disciplined organisation over a long period of time. The assistance of labour NGOs no doubt lends experience and legal knowledge to the organisers. But NGO involvement is not essential. Workers have organised many of the recent strikes entirely by themselves. The striking workers remain the driving force of these strikes. As management and local police force work together to coerce workers back to work, the mobilisation and solidarity of workers have proved crucial.
A sense of entitlement for having worked so many years at the same company gives workers a strong moral and legal reason and determination for mobilisation. Workers raise slogans about the company taking fruits of their labour, framing the issue as one of legal entitlement and rights. The fact that many workers are either facing contract termination, or willing to quit, might have contributed to their determination to take the risks.
This type of strikes is likely to dominate the manufacturing sector in the next few months. This development poses a broader question about the characteristics of China’s working class movement. Studies of workers’ collective actions in China have argued that in the last decade or so, the working class movement has transitioned from a primarily defensive movement against wage arrears to an offensive movement demanding rising wages. While this formulation is necessarily a generalisation – in fact, demanding unpaid wage still constitutes the reason behind the largest number of labour protests – it is useful in capturing an important trend in the labour movement.
Does the recent upsurge of relocation strikes suggest a shift away from offensive back to defensive struggles? Or, is this merely a brief interruption to the broad, long-term trend as described? Will the confidence of workers to fight for higher wages be rolled back as workers are forced to opt for severance payment? Will the militancy be lost as the weakening economy closes off space for offensive struggles? These questions are important for understanding the working class movement in China.
This column offers one interpretation. That workers make demands on unpaid social insurance and housing contribution legally entitled to them is in fact as important as struggles for higher wages.
Given social insurance and housing contribution have long been enshrined in the labour laws, actually demanding them is an important step forward. It is true that migrant workers have been reluctant to demand social insurance because they also have to make a contribution out of their meagre wages, and do not know for certain whether they will benefit in old age. But as many are near retirement age, this is becoming a more significant issue.
Moreover, it should be noted that workers have also raised paid maternity leave and high-temperature allowance among others as part of their demands. While these tend to be ignored by management in negotiations, it reflects a greater awareness of their labour rights and entitlements. These legal entitlements allow workers to skilfully and tactically deploy the law in their negotiation with management.
It would not do justice to these strikes to characterise them as defensive. It is not any easier to fight for these demands than for higher wages, and it is offensive in expanding the basket of demands. It may well be much harder in most cases because a lump sum payment of severance payment and social insurance and housing contribution can easily reach a sum of several million Yuan even for a factory of modest size. In addition, these strikes also train workers in mobilisation and democratic representation and deliberation, as well as negotiation and bargaining, the same experience developed during offensive strikes.
It will be naïve to think that any labour movement would follow a linear progression. The fact that China’s working class movement has seen intensifying collective actions over the last three decades, and in particular since the Honda auto workers’ strike in 2010, may have contributed to such a linear view. In practice, workers’ organising capacity and consciousness have always been geographically and sectorally uneven. The present situation facing manufacturing workers similarly should not be generalised to the labour movement as a whole.
Nonetheless, the slowing of the export sector is likely to continue, and the government sees the shift away from export-dependency as essential to the rebalancing of China’s economy. The resulting capital relocation and restructuring in the manufacturing industry will likely erode workers’ gains, at least temporarily. It displaces workers, and it may also disorganise and fragment the nascent labour movement to a degree. New struggles and networks may take time to form. But this is an unavoidable and necessary learning experience for a still young labour movement. Workers’ current organising and mobilising experience in relocation strikes may well be invaluable for their future struggles.
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New Chronic Diseases for Chinese Workers
Laura Battistin, Trade Union Institute for Development Cooperation
Occupational diseases remain a plague in the world factory. While chronic and deadly ailments due to the inhalation of dust are still widespread in several sectors, in particular in the mining industry, today China is witnessing the rise of other health hazards that hit employees in sectors usually less at risk.
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Health in the workplace, prevention of occupational diseases and medical care for Chinese workers, in particular migrants, remain severe problems in the world factory. Only recently the Chinese government has started to address these pressing issues, implementing some long awaited reforms on the matter, such as the amendment to the Law on Occupational Diseases of January 2012, which has significantly simplified the certification process of occupational diseases, always one of the main plights for Chinese workers. Yet, several surveys published in the past few years highlight that the enforcement of the law remains very poor.
In August 2013, an official inspection carried out in small and medium enterprises in Guangdong Province revealed an alarming situation. In the inspected factories, more than five million workers were exposed to poisonous and harmful substances.
The most recent national survey on the certified cases of occupational diseases also refers to 2013. In that year, in the thirty Chinese provinces and metropolitan cities researched in this report by the Ministry of Health and Family Planning, the certified cases were 26,393. Among these, 88 per cent (23,152 cases) were related to pneumoconiosis, while the remaining 12 per cent was due to poisoning, cancer and other ear, nose and throat pathologies.
These data show that the presence of dust remain a very serious problem in many workplaces in China, in particular in the mining industry. An estimated six million people in the country suffer from pneumoconiosis and many of them cannot get any official recognition of the occupational nature of their disease. The Chinese and international media have published several reports about their plight and in the past few months a touching documentary, Dying to Breath by photographer Sim Chi Yin, has enjoyed a wide circulation on the Internet. It tells the story of He Quangui, one of the many miners in Shaanxi province affected by pneumoconiosis (He died in early August, after ten years of suffering).
Still, China today is witnessing the rise of new occupational diseases, which affect workers in different industries. The Chinese Employees Health Condition and Medical Benefits Report 2015, funded by Ping’an Health Insurance and carried out by the Horizon Research Consultancy Group, offer an outline of these new health risks for Chinese workers. In particular, this study reveals that nearly 60 per cent of Chinese employees suffer from chronic diseases, with work-related stress in the lead.
This reports is based on interviews with 499 human resources managers and 2,099 employees, covering eight industries across 15 cities. The tests carried out by the researchers show that Chinese workers are an average 5.7 years older than their real age in terms of energy and vitality, and that cervical problems and insomnia are the most widespread troubles among employees. The survey also finds a huge gap between the health services provided by Chinese companies and the actual needs of the employees. For example, about 25 per cent of the interviewees declared to see a doctor three times a year, but most of them are allowed only one to four days of sick leave a year, which means that many of them have to work while ill.
According to the existing literature, different elements contribute to put the health of the Chinese workers at risk. These range from inadequate government supervision, to violations of the existing labour legislation by employers; from the lack of transparency in the process of diagnosis and certification of occupational diseases, to a general lack of knowledge among workers about health and safety standards in the workplace.
In its conclusion, the Horizon report suggests that employers pay more attention to the health of their employees. Yet, this could be not enough without more effective government actions regarding workplace inspections and workers’ education.
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Chinese Workers in Comparative Perspective
Anita Chan (ed.), Ithaca, New York: Cornell University Press, 2015, 296 pp.
As the “world’s factory” China exerts an enormous pressure on workers around the world. Many nations have had to adjust to a new global political and economic reality, and so has China. Its workers and its official trade union federation have had to contend with rapid changes in industrial relations. Anita Chan argues that Chinese labor is too often viewed from a prism of exceptionalism and too rarely examined comparatively, even though valuable insights can be derived by analyzing China’s workforce and labor relations side by side with the systems of other nations. The contributors to Chinese Workers in Comparative Perspective compare labor issues in China with those in the United States, Australia, Japan, India, Pakistan, Germany, Russia, Vietnam, and Taiwan. They also draw contrasts among different types of workplaces within China. The chapters address labor regimes and standards, describe efforts to reshape industrial relations to improve the circumstances of workers, and compare historical and structural developments in China and other industrial relations systems. (Buy on Amazon.com)
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