China labor unrest spreads: Dangerous challenge to Beijing.

[GoFlyKiteNow]

Chinese labor unrest spreads
By Tom Mitchell and Robin Kwong, FT.com
June 9, 2010 -- Updated 0917 GMT (1717 HKT)

(FT) -- Chinese labour protests that have forced shutdowns at foreign factories have spread beyond south China's industrial heartland, posing a dangerous new challenge for Beijing.

Workers at a Taiwanese machinery factory outside Shanghai clashed with police on Tuesday, leaving about 50 protesters injured. The confrontation represented an escalation of recent industrial action in the country, which until this week had been largely peaceful and concentrated in the southern province of Guangdong.

The violence at KOK International in Kunshan, a factory town in southern Jiangsu province, came just a day after Honda struggled to contain the fallout from its second strike in as many weeks. That strike, at Foshan Fengfu Autoparts, a joint venture majority held by a Honda subsidiary, forced the Japanese carmaker to suspend production at its car assembly plants in nearby Guangzhou, the capital of Guangdong province.

The workers at Foshan Fengfu, which employs 492 people, appeared to have been inspired by a successful strike last week at another Honda components supplier which ended only after the company agreed to a 24-33 per cent wage hike.

Honda said the strike was continuing on Wednesday morning, contradicting a report by the official Xinhua news agency that workers had "completely dispersed" after the supplier, which makes exhaust components for its parent, agreed to come back with an adjusted wage offer in ten days' time.

The unrest in Foshan suggests that strikes are proliferating faster than local governments and the official All China Federation of Trade Unions - which workers have largely circumvented in their recent protests - can resolve them.

While there is no evidence that workers at different factories are co-ordinating their activities, the success of the first Honda strike has emboldened workers by demonstrating that mass action can yield results.

In a typical example, on June 6 about 300 workers at a Taiwanese audio components factory in Shenzhen, the special economic zone bordering Hong Kong, blocked roads to protest against a change in their shift schedules. A spokesman for Merry Electronics said the situation was quickly defused.

"We had decided at the beginning of the year to raise wages 10 per cent by July 1, but had never announced this to the staff," Tseng Chin-tang said. "We took advantage of Sunday's event to let our staff know about the increase."

Merry Electronics had been paying its staff Rmb950 ($140) a month, in line with regional minimum wage rates, before the increase to Rmb1,050.

 

[longbow]

I look at it as positive. Workers are getting their voices heard and in return they are getting better compensation.

To keep things in perspective, Foxconn, mfg or Ipod, Ipad, iphone has a work force of 300K! So here we are talking about a few hundred workers here and there. In the end they should just group together under a union for electronics, automotive - just like how they do it in germany.

Honda parts workers got a raise so the rest of supply chain wants the same - makes sense.

Beijing should allow some form of collective bargaining to prevent more of these wildcat strikes.

China is just where the US was in the late 50s with unions, min wages, benefits.

 

[Watchman]

USA jealous again at China beating them at price . Stirring up things in China like in Afgan .

 

[GoFlyKiteNow]

I look at it as positive. Workers are getting their voices heard and in return they are getting better compensation.

To keep things in perspective, Foxconn, mfg or Ipod, Ipad, iphone has a work force of 300K! So here we are talking about a few hundred workers here and there. In the end they should just group together under a union for electronics, automotive - just like how they do it in germany.

Honda parts workers got a raise so the rest of supply chain wants the same - makes sense.

Beijing should allow some form of collective bargaining to prevent more of these wildcat strikes.

China is just where the US was in the late 50s with unions, min wages, benefits.

Us workers , even in the 50s had many basic rights guaranteed by the constitution and the courts to back their legitimate rights.

What does China's workers have in comparison ?. Even today ?
Almost no basic rights and priviliges.


There is absolutely no comparison between a free USA and a commie party run China.

 

[Einfield]

No one need to stir anything, it is a time bomb and the fuse just got lit by Foxconn.

USA jealous again at China beating them at price . Stirring up things in China like in Afgan .

 

[zuoom]

overall labor wages goes up. aka cost up. prices would definitely go up.

the rest of the world will definitely be feeling that in a couple of months time.

 

[Logisex]

There is no conspiracy theory involved. Only simple economics.

People don't realise that China is no longer the global sweat shop because of inflation. If the worker's pay can't keep up with inflation, they will resign as this is a free market. Labour is thus no longer cheap.

These workers are the post 80's babies who have high aspirations, not the farmers you used to get. They might be poor and come from villages but are not farmers so many cannot take hardships. They are very mobile and many has high school or even Uni degrees.

 

[singveld]

the world recession might bring down the communist party after all.
ha ha ha. i love it.

but i have no idea what to do in world recession.

 

[GoFlyKiteNow]

the world recession might bring down the communist party after all.
ha ha ha. i love it.

but i have no idea what to do in world recession.

There is nothing the communist oarty apparatus fear most than mass social unrest. Stability, social stability at any cost, even at the cost of millions of human lives is worth it for them. That is why this social unrest is feared the most and the party will do anything to prevent its spread.

The communist party can control any situation except mass social unrest.

 

[allanlee]

People don't realise that China is no longer the global sweat shop because of inflation. If the worker's pay can't keep up with inflation, they will resign as this is a free market. Labour is thus no longer cheap.

Same shit happening in Singkieland....... but has not been reported.
Those employers with large numbers of PRCs on their payroll having a big headache now.

Only few days ago the kopitiam that I frequent on sunday mornings didn't have any foodstalls open because the ah tiong assistants refused to come to work. Sunday morning was the busiest period for this kopitiam and they chose that day to screw the boss. :p Heard from the boss gf the ah tiong workers are asking for double pay to work on sundays.

My contractor friend oso having problems with his PRC workers. They are demanding to be paid the same wages as the malaysian tauchews and no OT on weekends as they want to visit the casinos.

 

[myfoot123]

Who knows, when Singapore has reached certain proportion of PRCs presence in our backyward, such thing will not be uncommon here too.

 

[singveld]

There is nothing the communist oarty apparatus fear most than mass social unrest..

hard to stop a worldwide economic problem from affecting the local economic.

they can increase the pay for the mass, thus raising the standard of living of PRC and buying power of the people, so the people can afford the ipad and iphone 4 they made.

 

[jw5]

Haven't some people been going around claiming that prc nationals are the hardest workers who will do all kinds of tasks without complaining?

 

[Logisex]

Same shit happening in Singkieland....... but has not been reported.
Those employers with large numbers of PRCs on their payroll having a big headache now.

Only few days ago the kopitiam that I frequent on sunday mornings didn't have any foodstalls open because the ah tiong assistants refused to come to work. Sunday morning was the busiest period for this kopitiam and they chose that day to screw the boss. :p Heard from the boss gf the ah tiong workers are asking for double pay to work on sundays.

My contractor friend oso having problems with his PRC workers. They are demanding to be paid the same wages as the malaysian tauchews and no OT on weekends as they want to visit the casinos.

The problem in China is the widening gap between the poor and rich, which is esp significant in big cities like SZ and GZ (where Foxxcomm and Honda are located). Once these lowly paid workers step out of their factory and see the people around them who are better off, they will be feelings of jealousy and anger. $900 a month is a significant amount in a village but its absolutely nothing in SZ.

The problem in S'pore is that we are getting the lowest end of the PRCs who can't survive even in their own country and who will do anything for money - extortion, play punk, fraud, gamble, blackmail, whoring..........afterall, they have nothing to lose.

So for thoses bosses who think they got a good deal with PRCs in S'pore, I can safely say that they are going to pay the price sooner or later. They just dun know how deep the water runs in these PRCs.

 

[besotted]

I pay my PRC staff very well, on top of free food and lodging.

I also sponsor one outing every month for all my staff for bonding.

Last trip we went to Singapore Flyer, took one cabin. They call me hao lao ban. They love to work for me and I return the favour.

My S'pore staff - only two poly grads steady, the rest useless and I tolerate them only because I need them for the ratio, this stupid MOM ruling.

Anyway I keep pushing ICA to convert the PRC staff to PR so I can use that for ratio too. win-win.

 

[Unrepented]

Actually, you can remove the rest of the sinkie poly grads and employ cheaper sinkie who relag one corner, or PR mei meis, and still meet the quota requirements. If these FTs are good, should get them citizenship or PR. Good to see that you are doing your own filtering.

I pay my PRC staff very well, on top of free food and lodging.

I also sponsor one outing every month for all my staff for bonding.

Last trip we went to Singapore Flyer, took one cabin. They call me hao lao ban. They love to work for me and I return the favour.

My S'pore staff - only two poly grads steady, the rest useless and I tolerate them only because I need them for the ratio, this stupid MOM ruling.

Anyway I keep pushing ICA to convert the PRC staff to PR so I can use that for ratio too. win-win.

 

[GoFlyKiteNow]

hard to stop a worldwide economic problem from affecting the local economic.

they can increase the pay for the mass, thus raising the standard of living of PRC and buying power of the people, so the people can afford the ipad and iphone 4 they made.

This is the crux of the situation. All these years, the Party and the government used brutal force as a way to keep wages low, for hundreds of millions of workers. The benchmark strategy was - that the wages must be lower than Vietnam, Indonesia, Thailand etc etc. ( who btw cannot enforce such policies on their population ) - In this manner PRC made goods could be priced lowest and attract investments.

The real beneficiaries was the rich investors in HK and taiwan who abused the system and the worker rights to the maximum with collusion of local PRC party officials.

Now the situation has reached boiling point. Wealth distribution was highly dysfunctional, worker benefits and wages were distorted and exploited, the enviournment was contaminated, and so on, all for the benefit of being the global sweat shop.

Inevitably inflation causes price rise, which means wages have to go up and the workers demand more pay.But if that is allowed, China will automatically lose its cost advanatge to other nations.

What we see now that conflict. It is impossible for China and its party officials to suppress the worker demands, as it imperils the very existence of the party and the state.

We will therefore see soon the prices of China made goods rising dramatically and with that the global factory image take a decline.
And the re-emergence of Indonesia, Malaysia, Philippines and other nations as manufacturing alternatives to China.

 

[GoFlyKiteNow]

No one need to stir anything, it is a time bomb and the fuse just got lit by Foxconn.

Investors worry about labor costs
http://www.china.org.cn/business/2010-06/10/content_20223747.htm

Companies plan moving production operations out of China.

Honda's Beijing-based spokesman, Zhu Linjie, told the Global Times Wednesday that he was unaware of the latest labor action in Honda's Zhongshan facility.

Meanwhile, a strike at the Foshan Fengfu Autoparts Co, which is 70 percent owned by Honda and Moonstone Holdings, a Taiwanese company, entered its third day Wednesday without any sign of resolution.

Two factories of Honda joint venture Guangqi Honda in Huangpu District and Zengcheng City, Guangzhou, capital of Guangdong Province, had to suspend production Wednesday and won't resume production today due to a shortage of supplies, Yang Guang, a PR staff member with Guangqi Honda told the Global Times.

Yang confirmed that about 200 workers joined the strike at the Foshan Fengfu plant, demanding higher pay and compensation for a two-week strike last month at Honda's engine-gear factory in Foshan, which forced their factory to suspend production for about a week.

"The strikes have seriously disrupted the production pace and annual production plan of Honda," Yang said.

The company has offered wage increases of between 24 and 32 percent to the disgruntled employees, bringing their pay to about 1,900 yuan per month.

Separately, a spokesperson for a Taiwanese-owned machinery firm in Kunshan, East China's Jiangsu Province, which was hit by a strike Monday, said Wednesday that employees had returned to work.

About 50 workers at the KOK Machinery factory in Kunshan were injured in a clash with police after about 2,000 assembly line workers went on strike Monday morning, demanding higher pay and improved working conditions, according to reports.

"The management and workers reached an agreement, including a deal on the wage issue," Dong Xueping, the company's deputy human resources official, told the Global Times Wednesday, without revealing details.

"Employees who took part in the strike will neither be punished nor sacked," Dong said, denying that anyone was injured during the incident.

Domino effect

Professor Lin Xinqi, director of the Human Resources Department at Renmin University of China, told the Global Times that the recent wave of strikes highlight the frustration of workers whose salaries have not seen a significant increase in the past 30 years.

Labor's share of national income declined to 39.7 percent in 2007, down from 53.4 percent in 1996. During the same time, the corporate share jumped to 31.3 percent from 21.2 percent, official statistics show.

Lin expressed concern that the recent wave of strikes might cause domino effects throughout the Chinese manufacturing industry and force companies and foreign investors to relocate their factories to areas with lower labor costs.

Arthur Chiao, the director of the Taiwan Electrical and Electronic Manufacturers' Association, suggested that Taiwan companies move their production bases from the Chinese mainland to lower-cost countries such as India, Indonesia and Vietnam.

On Tuesday, Terry Guo, chief executive officer of Foxconn Technology Group, said in Taipei that he is planning to transfer part of the company's production from the mainland to Taiwan, the Oriental Morning Post reported.

Chen Weiliang, president of Foxconn International, said its company has been transferring its operations to inland cities over the past 18 months and has relocated some production lines to other countries, including India, which are closer to their clients and have lower labor costs.

Also Tuesday, Zeng Jintang, vice president of Merry Electronics in Shenzhen, said his company is considering moving some of its production lines to inland China after workers at a Shenzhen factory went on strike Sunday over a pay dispute and shift arrangement, the Shanghai-based National Business Daily reported.

In response to concern that some foreign enterprises may consider relocating their factories due to the spate of strikes, He Weiwen, the managing director of the China Society for WTO Studies, disputed that the impact will be lim-ited.

"The cost of labor, in fact, is not always the most crucial factor for manufacturers. Quality of labor, government efficiency, the finance environment … are what companies care a lot about in deciding where to invest and open factories," He said.

Some analysts also argue that the rise in production costs will be offset by an improvement in worker productivity. It will also gradually help dole out manufacturing of the lowest-value products in China, and move to a higher-tier manufacturing mix.

Qiao Jian, a professor at the China Institute of Industrial Relations, told the Global Times that China won't immediately lose its competitiveness in cheap labor costs, as labor-intensive industries may well move to the central and western regions of the country in the process of optimizing the industrial structure.