CHINA: In capitalist China workers wage strikes

Thursday 22 May 2014

Date: 10 May 2014 Type: OpEd Source: Bulatlat.com Keywords: Labor protests, China

BY Satur Ocampo

“Capitalists will always be capitalists!”

This utterance, by a factory worker in Dongguan (Guangdong, China), encapsulates the seething contempt of China’s workers towards their foreign employers, who for years have blatantly disregarded their rights, welfare, and the protections afforded by Chinese law, often by arbitrarily setting the terms of employment.

It likewise reflects the workers’ dissatisfaction over the Chinese government’s apparent toleration, or abetment, of exploitative practices and its often inadequate enforcement of labor laws.

Such contempt and dissatisfaction have gradually spread and built up among the millions of China’s workers since the adoption in the 1980s of Deng Xiaoping’s market-economy policies by the erstwhile socialist state under Mao Zedong’s leadership.

Modern information technology, apparently, has made a difference. It has enhanced the workers’ knowledge of labor laws. It has also greatly facilitated interaction among themselves and the sharing of grievances and workplace experiences through social media.

The factory worker quoted by the International New York Times was Zhen Fanfei, 35. He was one of the 40,000 workers who last month walked out of the Dongguan plants of the Taiwanese-owned Yue Yuen Industrial Holdings, said to be the world’s largest manufacturer of Nike and Adidas shoes.

For two weeks the striking workers protested the firm’s underpayment of their social security contributions, which could deprive them of appropriate pension benefits after their retirement. They found out that the company had been computing their pension contributions based only on their base wages, rather than their total pay including overtime, which was substantial.

They relented only after government officials intervened to resolve the impasse, and the company announced it would provide the withheld payments and fully cover the workers’ pension benefits, as required by Chinese law.

But, as the INYT reported, it seemed like a Pyrrhic victory for the workers. In order to claim the past benefits withheld by their employer, they have to put up matching funds, which “for many amounts to years of savings they do not have.” Thus, unless the Chinese government again intervenes more decisively in their behalf, the workers won’t gain anything.

And that’s what spurred Zhen Fanfei to utter in disgust, “Capitalists will always be capitalists!”

The situation in China’s labor front has been developing after almost three decades of frenetic implementation of capitalist concepts and business practices in the context of neoliberal globalization, but under centralized state economic planning and direction. Low production costs — principally low wages and supposedly docile workers — induced foreign firms, largely from the US, to relocate their manufacturing operations to China.

This shift to “capitalism with socialist characteristics” has resulted in sustained annual GDP growth rates above 10%, attained through continually expanding manufacturing for exports, which allowed China to accumulate trillions of US dollars in foreign exchange reserves.

From such reserves China has lent $1.3 trillion to the US (now mired in total debts of $17 trillion). It also extended low-interest loans and grants to poor and developing countries in Africa, Asia and Latin America, enabling China to gain entry into their economies.

However, this GDP growth rate has now tapered to a fraction above 7% in the past few years. The negative impacts of the 2008 global financial and economic crisis have begun to take their toll on the Chinese economy, combined with the problem of excessive environmental despoliation and high pollution levels.

Meantime, the phenomenal lifting above the poverty line of hundreds of millions of the 1.35-billion population and the expansion of industrial development into China’s vast hinterlands — previously the prime source of cheap labor, referred to as migrant workers — have caused labor shortages in the booming coastal industrial hubs and upward pressure on wages. These have benefitted the workers.

In 2013, the 269-million recorded migrant workers earned an average monthly yuan wage equivalent to $410 (P18,000), up by 14% from just one year before.

The wage gains did not come easy, though. They have been won through the workers’ struggles despite state-police repression and the cooling down of China’s economy.

From June 2011 to end-2013, China’s workers waged 1,171 strikes and protest actions, according to the China Labor Bulletin (based in Hong Kong). In the past two months alone, the monitoring firm points out, there have been more than 200 strikes, 85 of them in manufacturing companies, as China’s exports have slackened.

A big number of protests were spurred by downsizing, closure, relocation, sale or merger of enterprises. The government has encouraged the closure of factories engaged in low-tech production, such as of shoes, textiles, and toys that in previous decades had flooded the markets of countries worldwide and displaced their local manufactures.

“Many manufacturers in China,” says one report, “sought to offset their reduced profits by cheating workers out of overtime and cutting back on bonuses and benefits, etc. These cost-cutting tactics proved to be a regular source of conflict with the work force.”

Workers’ strikes have not been confined to the industrial sector. Also driven to strike were China’s taxi and bus drivers who protested the high cost of gasoline and rental fees (for taxis).

Low wages among elementary school teachers, government construction and sanitation workers similarly have pushed them to go on strike for higher pay.

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