China’s Recent Spate of
Labour Protests:
Tables Turned for Chinese Workers?
YEW Chiew Ping*
Wage increases following the string of suicides at Foxconn and the Honda
strike led observers to herald a “turning point” in China’s industrial-labour
relations and the rise of the Chinese proletariat. There are, however, reasons to
doubt this sanguine outlook. China’s labour supply will still grow by millions in
the next five years. Industries may ease the current labour shortage in southern
China by relocating inland. The Chinese government has shown no sign of
granting greater autonomy to trade unions in the protection of labour interests.
Without truly representative trade unions, disgruntled workers can only seek
redress through strikes and other forms of collective contention.
IN MAY TO June 2010, a string of suicides at Foxconn’s factories and consecutive
strikes at various Honda Motor’s plants in Guangdong cast spotlight on the plight of
Chinese workers, who toil for long hours under poor work conditions for meagre pay
but have not been able to partake of the fruits of China’s wealth so far.
* YEW Chiew Ping is Research Associate at the East Asian Institute, National University of
Singapore.
22
east asian policy
In the two widely reported events, workers scored a minor victory as the two
companies, in a bid to appease aggrieved workers and alleviate public criticism,
announced that they would raise wages by more than 20 percent. This has led some
commentators and observers to herald a turning point in China’s industrial-labour
relations. A specialist on industrial relations at the International Labour Organisation
(ILO), for instance, told the South China Morning Post: “The labour market in China
is going through a critical turning point from unlimited to limited supply of labour and
from first-to second generation migrant workers, the post- 80s generation . . . This is
the point when workers begin to take collective action to improve their wages and
other working conditions, while previously they protested only when their legal rights
were violated.”
How different is this wave of labour discontent and protests from previous incidents?
Do recent events signal that tables are turned for Chinese workers, who will command
greater bargaining power against employers in asserting their rights from now on? The
rise of labour unrest in China is driven by multiple factors, including differences between
past and present labour protests; the demographics of the current workforce;
paradigmatic shifts in China’s labour supply; policy shifts; the institutional structure of
Chinese trade unions and their role in labour conflicts.
Collective Workers’ Action: Past and Present
The labour disputes at Foxconn and Honda are not isolated incidents. China actually
witnessed a wave of labour protests this May that eluded the attention of international
media, so much so that netizens labelled it the “The May Great Labour Strike.” After
the Foxconn and Honda incidents, labour strife also widened to beyond southern China.
Table 1 is a non-exhaustive compilation of the strikes that took place in May.
Collective labour disputes also surged from 12,784 to 21,880 instances or 71 percent
over 2007-2008, as shown in Figure 1. According to the China Labour Statistical
Yearbook 2009, the following provinces experienced the highest frequency of collective
disputes (in ascending order) in 2008: Yunnan (1,033 instances), Guangdong (1,897),
Jilin (2,123), Shandong (2,338) and Beijing (2,656). As the effects of the financial
crisis set in, the year 2009 also saw a rise in labour disputes in both scale and frequency,
assuming an increasingly antagonistic and violent nature.
The cases in Table 1 may be grouped into two categories: labour strikes to demand
for higher wages and other rights such as workplace safety, and strikes to protest
against the restructuring/relocation of mostly state-owned factories. Comparing these
labour protests with those in the past, we see continuity in collective action by laid-off
workers from state-owned enterprises (SOEs) as well as a rising trend of collective
action by workers demanding for better pay and work conditions. The restructuring of
SOEs since 1996-1997 has sparked off sporadic protests from laid-off workers all
over China. In March 2002, for instance, the northeastern China rustbelt cities of
Liaoyang, Daqing, Fushun saw a series of large scale protests by thousands of laid-off
workers dissatisfied with their severance-packages.
The two concomitant trends are supported by statistics on the causes of labour
east asian policy
23
TABLE 1
Date
STRIKES IN MAY
Incident
1
29 April to early May
Labour strike for days following the gas poisoning of
workers at Jiangsu Wuxi Nikon factory; workers refused
to resume work till the source of poisoning had been
identified.
2
4 May
Strike at Jiangsu Nanjing Xinsu thermoelectricty plant to
demand for higher wages.
3
4 May
Strike at Shandong Zaozhuang Wantaier fabric factory to
demand for higher wages.
4
5 May to 11 May
Over 2,000 workers participated in a second strike at
Shenzhen Baida hardware and plastic factory to protest
against the relocation of the factory.
5
12 May
Strike at Jiangsu Yizheng chemical fibre engineering plant
to protest against its restructuring.
6
14 May to 1 June
Over 5,000 workers took part in a strike and blockage of
the entrance at Henan Pingdingshan Ping fabric plant to
demand for higher wages and higher retrenchment
compensation.
7
17 May to 1 June
Strike at Foshan Nanhai Honda automobile parts factory
to demand for higher wages.
8
18 May to 21 May
More than 10,000 workers and their family members at
state-owned Shanxi Datong Xinghuo pharmaceutical plant
blocked traffic for three days to protest over insufficient
retrenchment compensation.
9
19 May to 21 May
Around 200 workers at state-owned Jiangsu Kunshan
Jingang went on a three-day strike sparked by concerns
over their livelihood after the sale of the state-owned
enterprise.
10
19 May
Strike at Jiangsu Suzhou Weixun for days to protest over
the relocation of the factory without lay-off compensation.
11
23 May
Over 100 workers went on strike for days following the
death of an overworked worker at the Chongqing Qijiang
gear factory.
12
28 May
Over 1,000 workers went on strike at Beijing Xingyu
automobile plant, a supplier for Korean Hyundai, to
demand for higher wages.
13
28 May
Over 2,000 workers went on strike at Gansu Lanzhou
Weini synthetic fibre factory to demand for higher wages.
Sources: “5 yue yilai Zhongguo bagong yilan” (“A Look at China’s Strikes since May”),
Yazhou Zhoukan, 24(23), 13 June 2010, available at http://www.yzzk.com, accessed 4 June
2010; various online sources.
24
east asian policy
FIGURE 1
TRENDS IN COLLECTIVE LABOUR DISPUTES
Source: Zhongguo Laodong Tongji Nianjian 2009, pp 469-470
disputes as seen in Figure 2. From 2001 to 2007, disputes over remuneration constituted
around half the total number of disputes caused by changes to the labour contract,
including termination. There was a big jump from 2007 to 2008 when the number of
disputes over remuneration doubled from 108,953 to 225,061, to almost on par with
that over labour contract disputes.
FIGURE 2
REASONS FOR LABOUR DISPUTES
Source: Zhongguo Laodong Tongji Nianjian 2009, pp 469-470
east asian policy
25
In a South China Morning Post report, an expert at the Australian National
University points out the differences between past and present labour conflicts: “In the
past most of the strikes in China had to do with violations of the law, like unpaid wages
or extremely long overtime without proper compensation . . . But this is different because
it doesn’t seem that any law has been violated. The workers are fighting for better
wages and a better wage structure and it looks like they are well organised and know
what they are doing.”
And the recent labour protests were indeed well-organised. IT savvy young worker
leaders adeptly used new technology to organise and mobilise fellow workers. The
leaders of the Honda strike, who are in their 20s, planned and coordinated the strike
through mobile phone text messages, QQ (instant messaging service), online chat rooms
and word-of-mouth. Instructions were posted on internet chat rooms prior to the strike
on 17 May. Workers also used their mobile phones to shoot the strike in action and
posted the video recordings on the Internet for greater impact.
Shift in Workforce Demographics and Labour Shortage
Currently, 29.1 percent of China’s urban workforce are under the age of 30. Those
who attended senior school, college, university and graduate school constitute 54 percent
of the workforce (see Figures 3 and 4).
A common refrain when it comes to explaining the suicides at Foxconn or China’s
apparent labour shortage is that the post-80s and post-90s generations of migrant
workers have the characteristics of sangao yidi (literally three highs and one low), i.e.
high education levels, high expectations of their career, high demands on material and
spiritual enjoyment, and low tolerance at work. Their upbringing has inculcated in them
a “worldview” distinct from that of their predecessors. This appears to be true to a
certain extent. Whereas suicides of young workers at Foxconn appear to stem from a
general disillusionment with life, radical actions such as self-ignition and jumping off
buildings by individual workers in the past were motivated by specific grievances,
particularly wage arrears.
China’s celebrity blogger Han Han, himself of the post-80s generation, writes about
how dismal prospects faced by the younger generation of workers have driven them to
despair and suicide in a 28 May 2010 post titled “Qingchun” (Youth): “This is why so
many jumped off buildings at Foxconn. Mechanical work, a bleak future, very low pay,
but even lower pay and very high costs of living if you work elsewhere [away from your
hometown]. The pay is only enough to feed yourself and buy you warm clothes. Other
than that there is nothing else you can do.”
In contrast, China Labour Bulletin, an NGO based in Hong Kong, claims that young
workers are more mobile and have more options: “The younger generation of workers
are both more aware of their rights and more self-confident and assertive. They will not
accept indefinitely the appalling working conditions their parents put up with. Many will
only work for a few months before moving on to another factory or a new town.” This
mobility is partly due to the labour shortage in the Pearl River Delta, parts of Zhejiang
and Fujian since 2004 and jobs created in inland provinces. Owing to the government
26
east asian policy
FIGURE 3
AGE COMPOSITION OF URBAN EMPLOYEES IN 2008
Source: Zhongguo Laodong Tongji Nianjian 2009, p. 92.
FIGURE 4
EDUCATION ATTAINMENT COMPOSITION OF URBAN
EMPLOYEES IN 2008
Source: Zhongguo Laodong Tongji Nianjian 2009, p. 94.
stimulus programme, second-tier inland cities such as Chongqing, Wuhan and Nanchang
are reportedly experiencing a construction boom and rapid economic growth. Though
wages may not be as high as in the delta, the more affordable cost of living and proximity
to friends and family make staying closer to home an attractive option.
east asian policy
27
FIGURE 5
INCREASES IN MINIMUM WAGE RATES 2010
Sources: Various online sources.
Furthermore, China’s one-child policy has also resulted in fewer young people
entering the workforce. The US census bureau reported that the number of young
people aged 15-24 entering the workforce will decrease by nearly 30 percent in the
next decade. In spite of this, China’s labour supply will still grow from 977 million in
2010 to 993 million in 2015. By these projections, it seems that the Lewisian turning
point of limited labour supply and rising wages is yet to come. The recent pay hikes
merely compensate for wage freezes during the recent financial crisis.
There has been much hype over rising wages in southern China to lure back workers
who were laid off when exports dipped during the financial crisis in late 2008 to early
2009. Surveys by the National Bureau of Statistics reveal that some 70 million migrant
workers or half the migrant workforce returned home just before Spring Festival in
2009. From February this year, various provinces and municipalities – Jiangsu, Zhejiang,
Guangdong, Fujian, Shanghai, Shenzhen, Beijing etc. – have adjusted or will adjust the
minimum wage rate upwards by more than 10 percent (see Figure 5). Yet even after
adjustment, the minimum wage rates still range from 600 odd yuan to slightly over
1,000 yuan. To earn decent wages, workers have to clock in excessive overtime work
of more than 100 hours. Amidst the wage inflation hype, therefore, the harsh reality for
many workers is still “low pay, long hours and no job security” in the words of a China
Labour Bulletin report.
28
east asian policy
The hardship of Chinese workers is accentuated when seen in light of the share of
wages in China’s GDP, which has been shrinking for 22 consecutive years as reported
by the Financial Times. From 57 percent in 1983, the share of wages in GDP declined
to merely 37 percent in 2005 and thereon remains stagnant. Chinese workers cannot
afford most products they produce: for every Apple iphone selling at US$599 that
Foxconn produces, Foxconn gets a mere US$11.20, and assembly line workers get
next to nothing. The basic pay for an assembly line worker at Foxconn Shenzhen was
900 yuan before the announced increment.
Even as wages are set to rise, it is unlikely that China’s manufacturing edge will be
affected in the near future. A Hong Kong Trade Development Council (HKTDC) survey
of 4,500 respondents, including 2,400 Hong Kong manufacturing companies, shows
that 46.2 percent still prefer to set up factories in the Pearl River Delta, 12.7 percent in
the Yangtze River Delta, 6.2 percent Vietnam, 3.8 percent Cambodia and 2.3 percent
Bangladesh. As Table 2 indicates, China’s share of exported manufactured goods is
significantly higher than that of other developing countries in 2008 although its hourly
wage rate more than doubles that of the rest. This led the HKTDC to suggest that
China’s competitiveness does not lie in price alone “but rather in an integrated bundle of
factors such as quality-price ratio of the output, infrastructure support, delivery lead
time as well as flexibility in meeting different specific order requirements.”
In the foreseeable future, labour intensive industries may relocate away from southern
China to ease the problems of labour shortage and high production costs. This is but a
temporary solution. In the long run, China still has to undergo industrial restructuring
and upgrade to more capital and technology intensive manufacturing. An overall pay
hike will not only help to accelerate this process; it will also boost domestic consumption
demand and narrow the widening income gap.
TABLE 2
Country
COMPARISON OF MANUFACTURING WAGES AND
EXPORT SHARE
Hourly Manufacturing
Wage Rate in 2007
Share of World Export
Manufactures in 2008
Average Annual
Growth in 2000-2008
Bangladesh
0.19
0.13
10.9
India
0.39
1.07
16.6
Vietnam
0.45
0.31
23.1
China
1.08
12.71
25.2
Sources: “Comparisons in Manufacturing Wages and Corporate Tax Rates,” available at
http://www.545project.com/ WageComparisonandTaxRates.pdf, accessed 9 June 2010; “The
Competitive Supply Chain: China versus a Rising Asia,” HKTDC, 3 June 2010, available at
http://www.hktdc.com, accessed 9 June 2010.
east asian policy
29
Ineffectual Trade Unions
A Financial Times report suggests that the Honda strike could hardly have taken
place without official acquiescence. In particular, it is remarkable that the Guangdong
provincial government did not suppress the high profile Honda strike on the pretext of
“maintaining stability.” On 14 June 2010, Premier Wen Jiabao addressed a group of
young migrant workers in Beijing in a bid to placate the discontented. Wen acknowledged
the workers’ contribution to China’s wealth and said that “[t]he government and the
public should be treating the young migrant workers like their children.” Wen’s words
hark back to his talk about upholding “social justice” at this March’s lianghui. In his
annual report, he said that the government’s top priority is to allow workers to share in
China’s economic prosperity. In this light, the wave of labour protests may serve as a
timely boost to the central government’s reform initiatives to resolve social conflicts,
which have often been met with resistance and selective implementation at the local
levels.
The central government’s subtle acquiescence aside, clashes between governmentbacked union staff and workers had also been reported. Amid scuffles between unionists
and workers at the Foshan Honda plant, one worker shouted, “We pay union fees
every month. You should represent us, so how come you’re beating us?” Another worker
on strike at a Henan fabric factory told Yazhou zhoukan reporters, “The trade union is
worse than the secret society; the latter takes your money and serves you whereas the
government-controlled unions demand for union fees but in turn suppress workers.”
Autonomous trade unions do not exist in China. The All-China Federation of Trade
Unions (ACFTU) is subordinate to the state; its workplace unions are subservient to
either the management or the communist party organisations at the same level. The
ACFTU’s government status prevents it from any kind of labour mobilisation against
employers. In China, collective workers’ actions, facilitated by congregation at the
work place, have been spontaneously organised instead of being mobilised by the unions
like in the West. In fact, the role of the ACFTU and its grassroots branches has been to
defuse rather than support collective workers’ actions.
One of the demands voiced by workers at the Honda plant was the right to nominate
their own union heads. Currently, union heads, nominated by party organisations or
management in many workplaces, are often key party or management members. Scholar
Feng Chen wrote an article titled “Union Power in China: Source, Operation, and
Constraints” in Modern China, (35, 2009). Chen’s survey of 524 union heads shows
that more than 70 percent are party committee members and 35 percent concurrently
hold managerial positions. There is a conflict of interests since unions are closely tied to
the institutions that prioritise profits at the expense of labour interests.
The contribution of the ACFTU lies mainly in the push for pro-labour law, such as
China’s Labour Contract Law that took effect from 1 January 2008. However,
implementation of the Labour Contract Law has been resisted by local governments.
Some in the Pearl River Delta and Yangtze River Delta regions even came up with
counter-measures to the Law. ACFTU statistics show that in 2008, 1.9 million enterprises
had signed collective contracts covering 150 million workers or 89 percent of the workers
30
east asian policy
in enterprises with unions. At the core of these collective contracts are wage demands,
which have met with strong opposition from the employers, whom the workers and
unions are powerless to counter. It seems that the ACFTU is largely a toothless tiger.
Implications
What is in store for the Chinese proletariat? The current labour shortage appears to
be confined to the Pearl River Delta, Zhejiang and Fujian, and more comprehensive
data that is lacking now is required to ascertain how acute the problem is in the whole
of China. Because labour is mobile and reactive
to wage adjustments, labour shortage is harder
to extrapolate. If labour shortage is indeed
pervasive all over China, then workers will “The trade union is worse
command greater bargaining power vis-à-vis
than the secret society; the
employers. Otherwise for now, industries have
the option of shifting to inland localities with more latter takes your money and
abundant labour supply.
One way to ease labour shortage and serves you whereas the
improve migrant workers’ welfare is to reform government-controlled
the discriminative hukou system. Following
Premier Wen Jiabao’s promises at this March’s unions demand for union
lianghui that migrant workers will gradually fees but in turn suppress
receive the same treatment as urban residents
in areas such as health care and pension, the workers.”
State Council has proposed gradually
— A worker on strike at a
implementing a system of residence permits
nationwide. However, it will take a long time Henan fabric factory
for the hukou system to be completely replaced
by residence permits.
What is certain is the shift in the demographic composition of the workforce. With
the entrance of the post 80s, post-90s generations into the labour force, gradually
replacing the previous generation of workers, China will probably see a rising trend of
workers fighting for their rights. As of June 2010 there is already an ongoing diffusion of
collective workers’ action to beyond southern China as the success of Honda workers
in securing higher wages emboldens workers in other places.
Labour discontent is just one of many potentially explosive social problems in China.
But unlike rural unrest, labour discontent is more likely to erupt into large-scale mass
incidents because of the large numbers congregating at the workplace and more effective
mobilisation via new communication tools. The new generation of workers’ greater
awareness of labour rights, however, is not met by reforms from top-down. There is no
sign that the government will grant more autonomy to trade unions anytime soon so that
they can truly represent workers’ interests. Furthermore, workers’ right to strike was
abolished in the 1982 revision of China’s constitution. One of the government’s challenges
is hence to address the legality of labour strikes which are on the rise.
east asian policy
31
Chinese workers are in the throes of a new labour movement. They are not out to
politicise it or confront the Communist Party directly in the manner of trade unions in
Western Europe but they want better pay and work conditions that are long overdue to
them. Leaving the protection of labour interests to spontaneous workers’ action and
suppressing them ex post is not a viable long term solution. As China’s wealth gap
continues to widen, the likelihood of escalating antagonism and radicalisation of labour
disputes is very high if the government continues to deprive workers of genuinely
representative unions and proper legal channels to seek redress and air their
grievances. 32
east asian policy