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China takes hands-off approach to labor strikes

The demand for higher wages reflects a younger, savvier work force that is better organized and has higher expectations, labor experts say.
Workers at Foshan Fengfu Autoparts Co., a supply factory to Honda Motor's joint-ventures in China, raise their hands as they strike to demand for higher wages in Foshan in south China's Guangdong province on June 7.
Workers at Foshan Fengfu Autoparts Co., a supply factory to Honda Motor's joint-ventures in China, raise their hands as they strike to demand for higher wages in Foshan in south China's Guangdong province on June 7.AP
/ Source: The Associated Press

When workers at a Honda transmission plant in China went on strike for higher wages last month, they touched off a domino effect of high-profile labor disputes.

As the strikes, many of them at foreign-owned plants, rippled through China's southern manufacturing heartland, the government — usually quick to crush mass protests of any kind — did not step in, but allowed them to spread.

That's because it views the strikes less as a political threat these days than as an economic tool — a way to help restructure China's current export-driven economy to a more self-sustaining one, driven by ordinary people with more cash to spend.

The demand for higher wages reflects a younger, savvier work force that is better organized and has higher expectations, labor experts say.

Boosting wages fits in with Beijing's strategy of closing the income gap and promoting more equal growth in coming years, said Liu Shanying, an analyst at the Chinese Academy of Social Sciences' Institute of Political Science in Beijing.

"If incomes won't go up, how can domestic demand be boosted? Strikes for better pay are very much in line with the big trend of Chinese economic development," he said.

Dispute over wages
The authoritarian leadership sees the gulf between rich and poor as a threat to Communist Party rule and has cited widening income disparities as a factor in the protests. Policies aimed at raising incomes for working-class Chinese and promoting more equitable growth are a priority for the next five-year plan, which the government is drafting now.

Despite moves by the government to raise wages, they remain strikingly low. Workers' salaries as a share of China's economy have declined for the last two decades, dropping from 57 percent of gross domestic product in 1983 to just 37 percent in 2005.

The minimum monthly wage in southern Guangdong province was increased in March to between 920 yuan and 1,030 yuan ($135-$150) in the capital of Guangzhou and cities in the Pearl River Delta manufacturing base. Elsewhere, it is as low as 660 yuan ($95).

While China has taken a less confrontational approach toward striking workers, the workers also have helped, generally keeping their demands limited and not calling for national independent unions, which are banned. Police intervention has been rare unless protests spilled into public roads and areas.

"For several years now, the central government in Beijing has seen labor disputes to be just that — disputes between workers and management. They are not related to culture, religion or politics. They are pure economic disputes and should be dealt with as such," said Geoffrey Crothall, spokesman for the Hong Kong-based China Labour Bulletin, a worker advocacy group.

"We're not seeing the systematic repression of organized labor that we saw 10 years ago," Crothall said, noting that labor organizers used to be singled out for lengthy jail terms but in recent years have been given one or two years.

'Mass incidents'
Striking workers in the recent unrest have helped their cause by largely remaining calm and staying out of the streets, said Liu.

"If the tensions get resolved in a peaceful and reasonable manner, why not take a free ride on it?" Liu said. "After a series of mass incidents, the government has learned this the hard way. Now it won't go and confront. If the workers are right, why should the government play the bad guy?"

China has been wary of the increasing number of "mass incidents" in recent years — large-scale social protests often aimed at government corruption or illegal land confiscation.

There were about 127,000 protests in 2008, according to a China Labour Bulletin report released last year. Roughly one-third are believed to be labor-related, according to Crothall.

Because China does not release official data on the number of strikes that occur annually, there is no way to say for certain whether the recent rash of labor unrest marks an increase from previous years, said Chang-Hee Lee, a specialist on industrial relations at the International Labour Organization's Beijing office.

Domestic media are often barred from reporting on labor strikes, so the recent surge in coverage by Chinese media is noteworthy, he said.

"We see many more reported cases of strikes in the Chinese media. We don't know if it's increasing, but what we do know is that the nature of the strikes are changing," Lee said.

'Different set of stakes'
The spiraling labor unrest poses a problem for Japanese companies that shifted production to China in the hopes of taking advantage of lower labor costs. Toyota Motor Corp. and Honda have repeatedly halted production at their car assembly plants in southern China since mid-May after parts suppliers were hit by strikes.

The protests have served to highlight a more effective, organized work force. Unlike past years, when the mostly migrant work force protested over blatant violations, Chinese laborers now are fighting for improved working conditions and higher pay beyond their basic rights.

That change reflects the attitudes of a younger generation who were raised in an era of relative plenty compared with the poverty and unrest their parents and grandparents knew.

"They are negotiating for their interests and not for their rights — it's a very different set of stakes," said Anita Chan, a labor expert at the University of Technology in Sydney.

"Normally, all the strikes that happened in this part of China in these kind of Asian, foreign-funded factories tended to do with violations of rights — wages not paid properly or paid at all or cheating of wages," she said.

One reason behind the more assertive work force is a shifting job market since China pumped up its economy with massive stimulus spending to fend off the global recession. Manufacturing has begun to expand into the Chinese interior, leaving traditional industrial enclaves on the coast competing for labor and giving workers a stronger bargaining position.

Workers "have the upper hand, and also sense the government is trying to address inequalities, so the workers feel more comfortable in pushing for high wages," said Lee.

He attributes some of the new worker awareness to the debate that surrounded passage of a 2008 labor law regulating contracts, layoffs and other conditions. China sought public input on the drafts before passage.

"They received 190,000-something public comments and it created huge debate in the Chinese media. Though workers didn't know every detail, they understood that this law provided better protection," he said.

In the recent string of strikes, workers are seeking not simply higher wages, but salaries more in line with what their overseas counterparts are paid, said Lee. They also demand more vocational training and reforms so that their salary and status can rise the more years they work, he said.

"I was surprised to see the degree of sophistication in their demands," he said. "My sense is they are much better organized."

Associated Press researchers Zhao Liang in Beijing and Ji Chen in Shanghai contributed to this report.