A wave of strikes in China has crippled giant companies like Honda, heralding a new era of labour activism that could see the rise of free trade unions and an end to China’s “world factory” model.
The China Daily, which serves as a semi-official mouthpiece for the Beijing regime, laid out the challenges facing China.
It editorialised recently: “Development is unbalanced, with the disparity between the rich and the poor widening; exports still rely highly on labour-intensive products; and the mode of growth has yet to be adjusted to focus on advances in science and technology and the quality of its labour force.” (“Correct perception”, China Daily, June 14, 2010.)
The second generation of the migrant workers who have supplied the seemingly inexhaustible labour supply are turning militant.
Striking workers at a key Honda plant in southern China effectively shuttered the Japanese car giant’s entire China operation for two weeks. The Foshan transmission and engine plant in Guangdong province is on the upper reaches of Honda’s supply chain, and Honda’s four other assembly factories in China were forced to halt production. The Honda strike follows similar walkouts in Yunnan, Henan, Gansu, Shandong and Jiangsu provinces in recent weeks.
Following the strike at the engine and transmission plant, a strike hit another auto parts plant. Honda’s lock plant was shut down, with workers seeking monthly salaries from about 1,700 to 2,040 yuan ($280 to $340).
As in the United States, where the United Auto Workers (UAW) led the unionisation of industrial workers, the strikers are at the top end of the skilled industrial hierarchy. China is in a similar position to the United States in the 1930s and ’40s. Car sales are booming, with over 10 million vehicles manufactured in China last year, making it the world’s biggest car market, a trend which will only intensify in years to come as more Chinese are able to afford cars.
According to newspaper reports, China’s government is trying to shift away from reliance on exporting cheap products made by labour-intensive factories along the booming coasts.
The rash of strikes has seen some strange sights, as officials of the government-sponsored “tame cat” unions try to get workers to end strikes. Local authorities in “socialist” China often side with the bosses in company disputes. Government agencies “keep one eye closed” when it comes to defending human rights, one Chinese report commented, meaning workers are losing confidence in the official agencies that supposedly defend their rights.
The proportion of China’s GDP that goes to wages has steadily fallen since 1983, said an official at the All-China Federation of Trade Unions. However, the earnings of China’s migrant works increased by 19 percent in 2008 and 16 percent in 2009, official sources reported.
Factories making budget goods, such as inexpensive clothing in the Pearl River delta region near Canton, are beginning to move to cheaper areas. Some 2,000 to 3,000 small and medium Hong Kong-owned factories out of an estimated 50,000 are expected to close this year. The Taiwan Electronics and Electrical Manufactures Association, which represents electronic manufactures on the island, is encouraging Taiwan-based electronics-makers to build new factories in lower-wage countries such as Vietnam, India, Indonesia and Malaysia, the Wall Street Journal reported.
Even before the latest round of unrest, manufacturers and buyers of low-cost products were actively seeking bases in Vietnam and Cambodia.
‘They’re looking very seriously, and we’re seeing that in apparel and footwear. A lot of our members are seeing appreciating wages,” said Richard Vuylsteke, president of the American Chamber of Commerce in Hong Kong.
Already, for goods with a high labour content, such as winter jackets, “Made in Indonesia” items are becoming common in China. This trend will test China’s oft-repeated mantra of “free trade”.
Life is not easy for the average factory worker, especially in the interior of China. Surveys in Hunan – a poor province in southern central China where Mao Zedong was born – reveal that factory workers are paid between just 1,000 to 1,500 yuan a month, or $160 to $250 (probably an overestimate) to toil on production lines for at least 60 hours a week. Workers in the interior of China often work long hours seven days a week for less than this.
Does the rise in worker activism signal the development of a free trade union movement in China? Unions have served to channel grievances and have been little more than adjuncts of management to discipline workers, but this may be changing.
Change in China has never come from without. A free trade union movement could be the foundation of a more democratic state in China, just as the Polish union helped overthrow communism in eastern Europe.
Only time will tell, but China’s workers want a better return for their labour. This could herald profound changes in both politics and trade, with China’s exports likely taking a big hit in the long run.