What to make of the strikes in China?
Around this time of year, the topic of social unrest in China is never far from the fore. The recent spate of strikes at the Honda plant in Foshan and slew of suicides at Foxconn's Shenzhen factory has provided recent evidence that not only disenfranchised sections of society are willing to show their defiant colours, but also the greater need for the government to address China's wealth distribution.
The Foxconn saga, in which at least twelve workers jumped to their deaths, has raised questions over the nature of factory life in China. The Guardian and The Telegraph have both looked into why the spate occurred. The seven-day weeks and 15-hour days of silent and repetitive manufacturing of products these workers may never be able to afford has taken its toll. Chinese paper Southern Weekend also sent one of its interns to work in Foxconn's factory for one month, who said,
If you have no links, other than on the production line, then you become one single and unconnected knot. Then you get suicidal facing a machine all day and with no way of releasing your anxiety like normal people.
It was also found that, although the factory pays its workers according to China's legal minimum wage (900 RMB), it has since pledged to increase salaries by 20%.
Meanwhile, a set of workers' strikes at a Honda transmission factory have raised questions over a potential labour movement in the PRC. The car maker had to shut down its Foshan plant from 21st May to 2nd June after over 1,800 workers went on strike demanding higher wages.
Perhaps adding fuel to the strike engine, as well as Chinese state media's willingness to cover it, is that Honda is a Japanese company, with anti-Japanese sentiment from World War Two still lingering in the PRC. However, as this piece from The Economist says, the issue here is more about the lack of support from China's only officially recognised union, the All China Federation of Trade Unions, than its Japanese managers:
On May 31st more than a hundred high-level union members were sent to the factory by the local government. Some scuffled with workers who were trying to get to the gate to talk to reporters. “They’re mafia,” fumed one employee, as another showed a long cut on his face that he blamed on the union men.
Several workers complained that despite paying membership dues of around 10 yuan ($1.50) a month, they had received virtually nothing from the union, least of all help negotiating with managers.
In similar news, China Daily reported yesterday that representatives from KFC have been in talks with Shenyang Municipal Trade Union in Liaoning province, two months after the union demanded an increase in pay from 700 to 900 RMB a month.
In spite of the tensions, an FT editorial is quick to claim we are not seeing the end of a cheap labour era in China. Instead,
it is crucial to remember that those with jobs in large factories in successful coastal regions are among the more privileged Chinese. The big challenge is to spread higher incomes across the whole country.
To achieve this, there has to be fundamental reform. This must include: shifting labour-intensive industry from coastal regions; supporting rapid growth of labour-intensive services; repricing underpriced capital; giving households a bigger share of the return on capital, via higher interest rates; creating stronger social safety nets and increasing direct spending on health and education services.
These events have occurred at a sensitive time for the Chinese government. Educated guesses can be made on how they will play out, or if they will create a ripple effect that will cause other disgruntled workers to revolt. However, the one certainty is that the very bubbling of such contentions hammers home the need for broad-based reform to decrease the gaps in social inequalities.
