STRIKE WAVE IN CHINA

STRIKE WAVE STRENGTHENS LABOUR’S HAND
IN DRIVING A SOCIALIST PATHWAY OF DEVELOPMENT IN CHINA

by Wayne Sonter

A wave of strikes swept through China between May and July 2010, centred on, but not confined to the rapidly growing auto industry.

The strikes were triggered by a dozen suicides at the monstrous Foxconn plant in Shenzhen, where Apple iphones are made and hundreds of thousands of workers, nearly all young migrants from rural areas, work 60 or more hours a week in a sprawling complex of factories, under military-style management.(1)

Foxconn’s attitude towards its employers, typically, is that, “They are here to make money, of course they have to work hard. If they want a good life here, they will have to work hard for it. It's natural.” (2)

The suicides provoked sympathy and shame throughout China and stirred fellow migrant workers to take action, first at the Honda transmission plant at Foshan, (3) then at other plants owned by Honda, Toyota and Hyundai and their supplier firms (4)

The strikes mark a period of unrest and unsettled labour relations in China, as workers seek to wrest to themselves a ‘fairer’ share of the social product they create and to lessen their exploitation. As a striking worker at the Honda Lock plant (Zhongshan, Guangdong) stated:

China! It has been promoting low-cost competition and cheap labour. Our GDP keeps growing! However, this growth relies on exploiting our cheap labour. We have created all this wealth but only get very low wages in return.… Don’t we deserve to get better pay? With such deplorable wages, just how are we going to raise the overall level of our national economy? (5)

Those in revolt are the second generation of China’s ‘new’ industrial working class, created by China’s phenomenal economic growth in the last three decades, where hundreds of millions of people have moved from country to city seeking work, feeding a growth of 400 million people in China’s cities in the past 25 years.

They come to places like the Pearl River delta in Guangdong ‘one of the world’s densest industrial estates’ with its broad, low factories and ‘thickets’ of six-storey dormitories. Turnover of workers is high and most are young, few older than their early twenties and many still in their teens. Many manufacturing workers are women and almost all in the affected factories in Guangdong have attended vocational schools, meaning they have a relatively high level of education. (6).

These young workers are determined not to sacrifice their lives like their parents did, but to make a better life:

Our parents have suffered from this cheap labour market and now they are getting old. And now, do we, the post 1980 and 1990 generation, want to follow in footsteps of our parents? I believe no parent wants this. It is because they all once walked down this road and know how hard it is. We do not want to go this way either. Times have changed! So this kind of cheap labour regime must end! (7)

They are also more spirited, and combative in advancing their interests:(8)

“We are not as cowardly and afraid of trouble (as the older workers)”, said … a cheerful 20-year-old factory girl wearing a pink dress, gently mock(ing) an older colleague in his 30s who was among a group of around 10 others gathered in her room. "We don't think so much about things," she laughed. "The risk is worth taking. Now we've started, we must finish it." (9)

With modern information-technology the new generation of workers find it easy to discover, through school networks, mobile phones and internet bulletin boards what is happening from factory to factory. This fed into the strike wave, sweeping across industry and from employer to employer, in increasingly conscious industry wide action that indicates a capability to take action to a more general level.

China’s new labour laws have made it easier for workers to organise and bargain with their employer, and the huge debate among workers and in the media before they became law in 2008, raised expectations that they would provide workers better protection. (10)

But the strikes also exposed the inadequacy of the All China Federation of Trade Unions as a voice for labour, and the comprador role local governments play in backing capital in disputes with labour. As Anita Chan, University of Technology, Sydney, reported in the China Daily:
‘during the Honda strike, in the eyes of the workers the union was “useless” because it “blatantly sided with the local government, which in turn was on the side of the employer.”’ (1)

Employers and local governments have routinely appointed workplace delegates, with ACFTU compliance:

The ACFTU has for many years had “a policy of urging workplace unions to sign collective contracts with managements” and … the government supports “an enlarged trade union role” in negotiating contracts with management … however, in foreign-invested enterprises in the Pearl River Delta region in Guangdong, workers’ representatives are appointed by local governments and are expected to support their localities’ quest for foreign investment. (12)

The top levels of the Communist Party of China (CPC) are recognising the vital role of the young, migrant workforce for China’s future and the justice of their demands on employers for higher wages and better conditions. No less a figure than Chinese Premier, Wen Jibao recently told migrant workers in Beijing:

“You are the main army of the contemporary Chinese industrial workforce. Our wealth and our tall buildings are all distillations of your hard work and sweat. Your labour is a glorious thing, and it should be respected by society. The government and all parts of society should treat young migrant workers as they would treat their own children.” (13)

Yang Shiming, vice-minister for human resources and social security, reported to the National People’s Congress on the need to safeguard migrant workers rights and improve their working conditions, (14) while Wang Yang, the highest government leader in Guangdong, has encouraged the Guangdong trade union federation to “democratize” the trade union by experimenting with election of local trade union leaders. (15)

Some reports claim the words from senior CPC figures are backed by militia ready to enforce civil order. Their warnings almost welcome the prospect of suppression of workers revolt to ‘prove’ the system has failed, or capitalist restoration is complete. (16), (17), (18).

Some also read into these developments the possibility of a ‘solidarnosc’ type workers movement in China, or on the other hand are critical of the extent to which present developments are not leading to ‘independent’ trade unions. (19)

Nonetheless, young workers are directly taking power into their hands through strike action in the workplace, adding to pressure within the ACFTU to start to allow and encourage workers to directly elect workplace committees and representatives, rather than appoint them by the ‘usual’ methods:

“… under the impetus of the workers’ self-organization in the auto parts industry … President of Guangdong Federation of Trade Unions, Deng Weilong, announced creation of a trade union legal services department to represent workers and activists. He also announced the union’s intention to conduct democratic elections to replace management officials with workers as union chairpersons in workplace unions. The Vice-Chair of Guangdong Federation of Trade unions, Kong Xianghong … defended the legal rights of workers to conduct economic strikes. Unions must listen to the workers, support their legitimate demands and aspirations through collective bargaining.” (20)

Workers using their rights to organise in the workplace, accords with China’s constitution and is also the most likely and direct way to empower unions and through an ‘all-china federation’ extend workers’ power across the workforce. In other words, workers, using their collective power, can make the ACFTU itself a more effective force for developing the working class’s organising and management capability at workplace, industry and economy levels. The extent to which they can do this indicates how far the present framework can support an evolving social democracy. Such understanding seemed to emerge among ACFTU officials, in the course of the strikes:

The first strike at the Nanhai Honda Auto Parts transmission plant in Foshan City succeeded in winning wage increases for both “student interns” and permanent workers through courageous actions and strategically sound tactics, but had to overcome violent strike-breaking efforts by Nanhai district trade union officers sent by the local government. Nanhai workers elected their own bargaining representatives and demanded the right to elect their own enterprise union chairperson.... a fair election procedure has been promised them by … the Guangdong provincial trade union federation …

A wave of strikes triggered by the success of the Nanhai strike swept parts plants producing for Honda, Toyota and Hyundai, with roughly similar outcomes, negotiations resulting in major wage increases and promises that workers will have the right to select their local union officers in the future. Generally the striking workers regarded the enterprise and higher level trade unions as useless or irrelevant. At the Honda Lock plant at Zhongshan, after the strike faltered when management brought in scabs and threatened strikers with dismissal, some frustrated strike leaders were reported in the New York Times to be calling for an independent trade union.

However when the strike wave reached Honda Nansha in Guangzhou, the municipal trade union federation reacted positively and pro-actively. The trade union leadership encouraged election of worker representatives to participate in bargaining, and made a public statement that the union would be on the workers’ side and represent their interests. When the local labor bureau officer asked the local union to serve its traditional role as “mediator” in the dispute between workers and management, the trade union officer refused and insisted the government’s labor bureau play that role. The union official even resisted the customary “vetting” of the elected chairperson of the worker representatives by the local police.’ (21)

The Chinese actions are already inspiring workers around the world. For example Ken Lewenza, President, Canadian Auto Workers Union, whose members work for many of the same employers as do Chinese workers, has called for popular forces to look to Chinese strikers for hope:

“Chinese autoworkers who, against all odds and possibly severe repercussions, took to the streets in protest over insufficient wages and poor working conditions … exemplify the principles and fearless spirit of trade unionism … A strong, independent and united Chinese trade union movement can support and inspire unions and workers' movements globally … (22)

Support for the striking workers has come from within China and internationally, (23), (24), (25), including from veteran communists who have called on the ACFTU to clearly stand on the workers’ side and for the CPC to uphold the constitution and its basic principles, by restoring the working class to its leading position and socialist public ownership to its central role in the national economy. (26)

The upsurge in militancy amongst China’s workers is part of an emerging, world-wide ferment of discontent following the 2008-09 Global Financial Crisis (GFC), whose costs the world capitalist class blatantly intends to shove onto workers.

The global auto industry is a case in point. It has undergone an extended period of rationalisation, accelerated by the GFC and recession. Automakers are rushing to China both to exploit a ‘competitive’ labour market and to be inside the world’s largest and fastest growing new car market (27)

In doing this the global corporates have ruthlessly squeezed labour costs, driving hard bargains to enforce brutal work conditions on their own employees and forcing down to the bare bone the prices they give contractors, who are then doubly driven to undercut labour to the maximum extent. Many contracting firms work on margins of less than 5 per cent, so cannot afford any real increases in costs of labour.(28).

The current wave of strikes has succeeded in revealing to China’s young workers their power, particularly when they assert it against powerful multinational corporations in growth sectors of the economy.
They perceive that they are fighting for socialism, and opposing capitalism, which they equate with exploitation by global corporations:
Honda is a Japanese company and Japan is a capitalist country. But China is supposed to be a socialist country! The Japanese companies investing in China must follow the rules of China. Implement socialism! Do not give us capitalism! (29)

This is a new development. Industrial strife has simmered for the whole period of downsizing, bankruptcy and rationalisation of public sector industry, but labour is now exercising its power in an expanding industry sector, linked integrally to the global economy.

Challenges for a socialist pathway

This eruption of strikes starkly highlights some of China’s challenges in strengthening workers’ democracy and forging a socialist pathway of development.

Many features of the Chinese state are contradictory. The 2008 labour laws may have increased labour’s power to organise, but the 2004 Congress’s amendments to the constitution also protected private ownership of property and wealth, permitted private entrepreneurs to join the CPC and recognised the merit of ‘progressive’ capitalists among its principles. (30), (31)

Development in China since the 1980s has generated great inequality and a very wealthy elite, creating a potentially explosive situation. According to an article in The People’s Daily, quoted in the China Labour Bulletin:
“China’s Gini Coefficient, … an index that measures inequality, clocks in at 0.47 – very close to the 0.5 marker, which often signals risk of instability. … from 1997 to 2007 labour remuneration as a percentage of GDP went from 53.4 per cent to 39.74 per cent. Workers weren’t the only ones to lose ground. … In 1978 urban per capita income was 2.78 times higher than rural income. By 2009 that gap had widened to 3.33. Also, in cities, the richest 10 per cent controlled 45 per cent of the wealth, while the poorest 10 per cent only had 1.4 per cent. (32)

To the extent the top echelons of the party are founding dynasties who own private and privatised productive assets, work closely with foreign investors to ratchet up economic growth, and have inheritance rights, there is a mortal danger of the state turning into an apparatus that serves a capitalist class, one that concedes to workers only what it must, to maintain stability and growth of consumption in a market economy (33).

China’s last three decades can be characterised as a form of a New Economic Policy (NEP), as well as a sort of ‘market socialism’. It invites comparison with the early Soviet Union, when the young revolution needed a massive infusion of capital to develop industry and improve living standards, and also with the ‘marketisation’ that years later helped collapse the Soviet Union and the Comecon countries.

Lenin and the Communist Party of the Soviet Union saw great danger arising from the influx of global financial and industrial capital into a young socialist state economy. Lenin stressed that capital flowing into the economy had to be accompanied by a maximisation of labour’s rights and resources, so it could resist superexploitation, exert a controlling force in workplace and industry and continue to develop its social-economic role:
“(where) a free market and capitalism, both subject to state control, are now being permitted and are developing; (and) state enterprises are being put on what is called a profit basis, i.e., they are in effect being largely reorganised on commercial and capitalist lines … (then) one of the main tasks that will henceforth confront the trade unions is to protect in every way the class interests of the proletariat in its struggle against capital. This task should be openly put in the forefront, and the machinery of the trade unions must be reorganised, modified or supplemented accordingly … (34)

Where now for workers?

The revolt by young Chinese workers has inspired labour around the world. Their actions have reverberated among corporate and ruling circles in a time of global ferment and discontent with the capitalist system.
Their decisive action has hastened increases in the minimum wage in provinces throughout China, (35) in a situation where, according to the ACFTU a quarter of Chinese workers had not had a pay rise in the previous five years (36)

Their commitment and strategic thinking is forcing the ACFTU towards accepting a more representative unionism in the workplace and to taking on a new role as labour ‘advocates’ rather than ‘mediators’ between labour and capital; and gained recognition from government of their vital role in the economy and the justice of their case.

Given this, workers’ gains in some cases were little more than the minimum wage increases municipal and provincial governments are now setting. Employers have reneged on deals once the strikers were back at work, intensified work and ramped up costs and penalties for employees. They are accelerating automation, seeking lower cost immigrant labour and preparing to move to lower cost labour markets –provincial China and lower wage countries such as Vietnam, Bangla Desh and Cambodia. (37).

Employers – especially foreign investment enterprises – are accustomed to, expect and demand that the Chinese government protects their investments in China. They perceive a common interest between businesses, both foreign and domestic, and governments seeking stability. On the other hand, those workers who have recently taken direct action against global corporations are a ‘thin sliver’ of China’s total workforce. They need to be vigilant, connected and organised to maintain their gains, avoid isolation and counter these pressures.

China employs a fifth of the global workforce. Its economy is inextricably part of the global market economy. The Chinese workers’ long march to emancipation against the forces of imperialism, including their own emerging capitalist class, is of vital concern to the global workforce. The labour movement worldwide needs to work in solidarity with China’s workers if it is to effectively challenge imperialism and the world capitalist class, transform society and bring about a civilised future for humanity.

Footnotes
1. ‘Billionaire Terry Gou sweats in fallout over 10 Hon Hai suicides’ Jason Dean and Ting-I Tsai, The Wall Street Journal May 27, 2010 http://www.theaustralian.com.au/business/news/billionaire-terry-gou-sweats-in-fallout-over-10-hon-hai-suicides/story-e6frg90x-1225872003166
2. ‘Special Report: China's new migrant workers pushing the line’ By James Pomfret and Kelvin Soh, Reuters, Mon Jul 5, 2010. http://www.reuters.com/article/idUSTRE6640QD20100705
3. ‘Honda Strikers Victorious in China’ Paul Garver, Talking Union, posted June 7, 2010. http://talkingunion.wordpress.com/2010/06/07/honda-strikers-victorious-in-china/
4. ‘Auto Strikes Open Up Space for Union Reform in China’ Paul Garver, ibid, posted July 7, 2010 http://talkingunion.wordpress.com/2010/07/07/auto-strikes-open-up-space-for-union-reform-in-china/
5. ‘A Honda Worker in China Speaks Out at Close of Historic Strike’, Labor Notes Staff, 06/02/2010. http://www.labornotes.org/blogs/2010/06/honda-worker-china-speaks-out-close-historic-strike
6. ‘Workers in China grasp the power of the strike’ Jonathan Watts, The Observer, Sunday 4 July 2010 http://www.guardian.co.uk/world/2010/jul/04/workers-china-power-strike-communist
7. ibid. ‘A Honda Worker in China Speaks Out …’
8. ‘China takes hands-off approach to labour strikes’ AP, Monday June 28, 2010. http://biz.thestar.com.my/news/story.asp?file=/2010/6/28/business/20100628115055&sec=business
9. ibid. ‘Special Report: China's new migrant workers pushing the line’
10. ibid. ‘China takes hands-off approach to labour strikes’
11. ‘Labor unrest and role of unions’, Anita Chan, China Daily, 18 June 2010 http://www.chinadaily.com.cn/opinion/2010-06/18/content_9987347.htm
12. ‘The New Challenge of the Strikes Won’t Go Away’ Stanley Lubman, Wall Street Journal July 11, 2010, http://blogs.wsj.com/chinarealtime/2010/07/11/the-new-challenge-of-the-strikes-wont-go-away/
13. ‘Echoes of workers’ struggle in apartheid-era South Africa in China’s factories today’, Geoff's blog China Labour Bulletin, June 14 2010. http://www.china-labour.org.hk/en/node/100805
14. ‘China's migrant workers see some gains on labor rights’, Violet Law, June 30, 2010, Christian Science Monitor. http://www.csmonitor.com/World/Asia-Pacific/2010/0630/China-s-migrant-workers-see-some-gains-on-labor-rights/%28page%29/2
15. ibid. ‘Auto Strikes Open up …’
16. ‘As Chinese premier urges “respect” for workers, police prepare crackdown’, John Chan, 18 June 2010,World Socialist Website.http://www.wsws.org/articles/2010/jun2010/chin-j18.shtml
17. ‘China strikers bypass union, organize with social media’, Michelle Phillips, June 27, 2010, Washington Times. http://www.washingtontimes.com/news/2010/jun/27/china-strikers-bypass-union-organize-social-media/
18. ‘UPDATE 1-Striking workers at Honda China supplier demand apology’, Doug Young; Fri Jul 16, 2010, Reuters. http://www.reuters.com/article/idUSSGE66F0BD20100716
19. .ibid. ‘Special Report: China's new migrant workers pushing the line’ “But the Communist Party, which traces its own heritage to a worker's movement, has faced a policy tightrope. It must also ensure that strikes don't proliferate and scare investors or ignite broader political confrontation that erodes Party rule. Few workers blame the government for low wages, but more and more say higher pay and a larger share of China's economic pie are only fair.
While the past few years have seen bargaining power shift in labor's favor, it's virtually unthinkable that Beijing would allow workers to form independent unions along the lines of those found in Japan or South Korea, which might undermine its one-party power. When workers of struggling state-owned factories in northeast China organized protests and voiced political demands in 2002, authorities arrested the leaders and jailed them on charges of political subversion.
China's leaders have studied the lessons from Poland's solidarity movement led by Lech Walesa, which saw an independent trade union morph into a powerful opposition force that played a key role in the downfall of Communism there and in other Eastern bloc countries.
20. ‘Auto Strikes Open Up Space for Union Reform in China’ ibid.
21. . ibid. ‘Auto Strikes Open up …’
22. ‘Look to Chinese strikers for hope’ Ken Lewenza, Jun 25 2010, The Star. http://www.thestar.com/opinion/editorialopinion/article/828268--look-to-chinese-strikers-for-hope
22. ‘Time to defend Chinese workers' rights’ Li Hong, June 07, 2010, People’s Daily. http://english.peopledaily.com.cn/90002/96743/7014872.html
23. ‘Support Honda Workers in Foshan China’, 3 June 2010, Chinese Workers Research Network. http://chinastudygroup.net/2010/06/support-honda-workers-in-foshan-china/
24. Follow the Lead of China’s Strikers’, Jim Stanford June 27, 2010 http://www.progressive-economics.ca/2010/06/27/follow-the-lead-of-chinas-strikers/
25. ‘[Worldwide Scholars Petition]: Support Honda Workers in Foshan China’ Fri, 06/04/2010 China Labour Net http://worldlabour.org/eng/node/358
26. ‘Position Statement of Old Revolutionaries on Present Upsurge of Worker Action in China’ 13 June 2010, Li Chengrui, et al. http://chinastudygroup.net/2010/06/old-revolutionaries-on-the-present-upsurge/
27. Automotive industry, Worldwide Trends. http://en.wikipedia.org/wiki/Automotive_industry
28. ‘Apple's iPhone supply chain faces sharply increasing costs in China’ Josh Ong, 7 July 2010 http://www.appleinsider.com/articles/10/07/06/apples_iphone_supply_chain_faces_sharply_increasing_costs_in_china.html Also: ‘Secrets, Lies, And Sweatshops’ Business Week, 27 Nov, 2006
http://www.businessweek.com/magazine/content/06_48/b4011001.htm
29. ibid. ‘A Honda Worker in China Speaks Out at Close of Historic Strike’
30. ‘Major Amendments to the Constitution’ China Through A Lens March 16, 2004 http://www.china.org.cn/english/features/90056.htm
31. ‘Chinese regime amends constitution to protect private ownership’, John Chan, 2 April 2004 World Socialist Website’ http://www.wsws.org/articles/2004/apr2004/npc-a02.shtml
32. ‘People’s Daily cites gap between rich and poor as most pressing issue in China, but solution still elusive’, william's blog 13 Jul 2010, China Labour Bulletin. http://www.china-labour.org.hk/en/node/100824
33. ‘In Who’s Interest does the State in China Serve and Why’ Mark Vorpahl, July 2, 2010 http://www.workerscompass.org/vorpahl_07-02-2010.html
34. ‘Draft Theses on the Role and Functions of the Trade Unions under the New Economic Policy’, V.I. Lenin, Collected Works, 1971. http://www.marx2mao.com/Lenin/DRTU21.html
35. ‘Provinces across China raise minimum wages’ People’s Daily, August 18, 2010 http://english.peopledaily.com.cn/90001/90778/90862/7108404.html Also:
‘China Provinces Raise Minimum Wages to Curb Disputes’ Business Week July 01, 2010 http://www.businessweek.com/news/2010-07-01/china-provinces-raise-minimum-wages-to-curb-disputes.html
36. ‘ACFTU: SOE senior Executives earn 18 times higher than grassroots workers’ People’s Daily, March 10, 2010 http://english.peopledaily.com.cn/90001/90776/90882/6915167.html
37. ‘With Lower Garment-worker Pay, Bangladesh Moves In On China’Vikas Bajaj, Manilla Bulletin July 22, 2010 http://www.mb.com.ph/articles/268210/with-lower-garmentworker-pay-bangladesh-moves-in-on-china