`People's Daily' columnist -- `Time to defend Chinese workers' rights'

Honda factory in China.

By Li Hong

June 7, 2010 -- People's Daily -- Wherever exists exploitation and suppression, rebellion erupts. If the exploited are a majority of the society, the revolt draws even nearer and comes with a louder bout. For the past 30 years witnessing China's meteoric rise, multinationals and upstart home tycoons have rammed up their wealth making use of China's favourable economic policies as well as oversight loopholes. In sharp contrast, tens of millions of Chinese blue-collar workers who have genuinely generated the wealth and created the prosperity have been left far behind.

According to the All-China Federation of Trade Unions, a quarter of Chinese workers have not had a pay rise in pay in the past five years. The figure is perilously worrisome. Their harsh working conditions, low living standards and hardships in supporting older and younger family members add up, exacerbating psychological pressure.

The long queues of luxury cars running in China's cities shine our eyes, verifying modernisation of a huge country, but none of the flotilla belongs to the above "quarter of Chinese workers" whose salaries are at a standstill. It is logical to claim their livelihood is actually on decline taking in account the price rises in the years.

Hence, there came the widely reported mass labour strike at Japan's Honda's joint venture production line in Guangdong province to demand for a higher pay [see below], and the spate of rising employee suicides crippling Taiwan's Foxconn Technology Group's mainland plant in Shenzhen City.

Reports say that the Honda workers' walk-out since May 27 has forced four Honda automobile assembly lines in China to shut doors because of shortage of key engine parts, inflicting huge losses on the firm. Honda finally agreed to a 24 per cent pay rise to the workers who returned to work last week. Also, Foxconn management has agreed to workers' uniform pay rise of 30 per cent.

The pay rises are long overdue. They should have come prior to workers' took radical measures.

Never expect something like labour strike to happen in China? Please bear in mind that workers on this globe belong to the same group. When the exploited labourers are forced to toil extra time, work under huge pressure and earn disproportional tiny wages -- often at less than 1500 yuan (US$220) a month in China, the disappointment and frustration gather and grow to anger, and eventually revolts break out.

For sure, the Honda and Foxcoon workers will boost and embolden other low-wage workers to move and defend for their legitimate labour and human rights. The allegation by some that the Honda strike has highlighted tensions between Chinese workers and foreign companies is simply not true, because it's totally unfair and unruly for businesses to seek exorbitant profits at the cost of their employees.

Now, some analysts have argued that workers' rising demand for higher salary would deprive China as a source of cheap labour and drive multinationals to move to other countries like India and Vietnam. But, is it time for this country to say no to low-value and labour-intensive manufacturing, and make a small climb on the industrial ladder?

Isn't business's overexploitation of employees disgraceful? Isn't Chinese workers' demand for a higher pay justified? (As a matter of fact, Japanese employees in that Honda plant are paid 50 times more than the average Chinese workers).

The government has a role to play. For many years, it has been, unethically, friendly in policy making towards businesses in order to ratchet up economic growth, but done little to solidify the interests of the workers. As a result, as the country has raked in stacks of foreign currencies as reserves, and businesses and tycoons had deep pockets, the welfare of vast numbers of labourers has been hardly improved.

The sustainability of the country's growth is now at stake. Only when the low paid, long neglected and voiceless are taken care of by the government, will the blue-collar workers' unrest, now brewing in some factories, not cascade, spread and form crushing waves.

[The articles in this column represent the author's views only. They do not represent opinions of People's Daily or People's Daily Online. After 19 years working for China Daily and its website, Li Hong moved to english.people.com.cn in March 2009. Li has been a reporter and column writer, mainly on China's economy and politics. He was graduated from Beijing Foreign Studies University, and once studied in University of Hawaii and the Poynter Institute in Florida.]

Support Honda workers in Foshan China

[Chinese version: http://zggr.cn/index.php?action-viewnews-itemid-9397-php-1]

To all those who are concerned with workers in China:

On May 17, 2010, more than 1800 Honda workers in Foshan decided to go on strike. By May 27, all four Honda plants in China had stopped production.

Why did the workers go on strike? It is because their wages are too low and their conditions are harsh! Formal workers at Honda in Foshan take home 1200 yuan (US$175) a month on average, while intern workers, 80% of its workforce, earn as little as 900 yuan (US$131) a month.

Intern workers are students from technical schools who are not protected by the national Labor Contract Law, because they work for Honda under an internship contract. They are given a wage below the local minimum and are not covered by social insurance. What can Honda workers do with the little wages they get, at a time where prices for everyday goods are getting more and more expensive? They have little left, apart from covering their basic necessities. Can they hope to take root in the city? No. Can they work with dignity? No. They cannot afford housing, medical care, child rearing, or to look after their parents. With high inflation, it is difficult for them to take care of their own livelihood.

With all these difficulties, they have reported their situation to management through internal channels, but have been ignored. Their report disappears like a stone in the sea. Thus they are forced to go on strike. They demand a pay raise to 2000-2500 yuan. This is a very reasonable demand, as this was only about the average wage level in Foshan three years ago.

During the strike, they hoped that the company would take their views seriously and alleviate their current difficulties. But what did they get as a response? They met with threats and ridicule and a plot to divide the workers. The company said they would respond in a week. What did the company do in the meantime? The company threatened them: whoever does not return to work will be fired. The company picked out the strike leaders and fired them. The company also threatened all intern workers that if they did not return to work, they will not get their diploma for graduation. This is what Honda did in the interim. On May 24, the company responded that they will provide 55 yuan food subsidy to each worker.

What a mockery they made of workers' demand! Workers are not beggars! Facing Honda's response, which clearly lacked sincerity, workers were angry and decided to continue their strike.

On May 26, Honda rolled out a proposal to divide the workers: 477 yuan raise for intern workers and 355 yuan raise for formal workers. They hoped to tempt intern workers to return to work and thus "divide and rule". What surprised Honda is the unity demonstrated by workers.

On May 27, workers counter-proposed a 800 yuan raise for all, with no discrimination. Yet Honda did not learn its lesson, but played the "divide and rule" game again: 634 yuan for intern workers after three months and 355 yuan for formal workers. At the same time, Honda exerted more pressure on intern workers and required them to sign a "no strike" commitment before 9 am, May 31. The company also brought local officials and teachers of technical schools to force intern workers to return to work before May 31. Honda had promised that they would address the problem with a positive attitude. Look at what happened. This is what Honda called a positive attitude.

Struggling for survival and for dignity, Honda workers are forced to go on strike. But Honda had no sincere intention to solve the problems; it continuously tried to divide the workers and mobilised others to exert pressure on them. At present, workers have agreed to return to work for three days and allow the management time to respond to their demands.

Now is the critical time for the workers' struggle. Therefore, we appeal to all Honda workers, all worker brothers and sisters, people in China who are concerned with workers, and people in the world who are concerned with workers, to support the struggles of Honda workers in Foshan!  It is because their struggles are reasonable and just. They resist the oppression of their exploiters and they fight for a dignified life for all workers.

Let us unite and exert pressure on Honda. We want to tell Honda: stop all your efforts to divide and suppress workers and meet workers' demands.

We most sincerely salute the courageous Honda workers!

Contact: bentiangongren@gmail.com

Initiators: Editors of Chinese Workers Research Network, Dr. Yan Hairong (Hong Kong Polytechnic University), Dr. Alvin So (Professor, Hong Kong University of Science and Technology), Dr. Szeto May (University of Hong Kong), Wong Kai Hing (President of The Hong Kong Polytechinc University Students' Union), Dr. Chan Kingchi (City University of Hong Kong), Dong Xulin (Retiree from the United Nations), Dr. Du Jiping (Taiwan, editor of Pipan yu zaizao), Dr. Chen Yunzhong (Hong Kong University of Science and Technology), Dr. Barry Sautman (Hong Kong University of Science and Technology), Dr. Tong Xiaoxi (Chinese University of Agriculture), Dr. Fumie Ohashi (JSPS research fellow).

Signers: Dr. Wang Hui (professor, Qinghua University), Dr. Dong Qingyuan (engineer in USA), Dr. Fang Mou (scientist, USA), Dr. Ma Yaobang (writer, Canada), Wu Jianbing (poet, USA), Peng Zhaochang (University of Massachusetts), Liu Shenyu (scholar/writer, USA), Luo Chiyun (retired engineer), Dr. Ching Pao-yu (professor emeritus, Marygrove University), Dr. Bai Di (Drew University), Dr. Wang Dan (Hong Kong University), Dr. Chen I-Chung (Academia Sinica, Taiwan), Dr. Anita Chan (professor, Sydney University of Technology), Dr. Chen Kuan-Hsing (professor, Qinghua University, Taiwan), Zha Jianying (writer, the China representative of India-China Institute), Liang Xiaoyan (chief secretary of Beijing Western Sunshine Rural Development Foundation), Chung Ming Lai (Labour Action China), Zhan Yang (Ph.D. student at Binghamton University).

[The translator is not sure how to Romanise names of many signers from Taiwan. Not wanting to make mistakes in rendering their names, the translator apologises for not including them here. Please check the Chinese version for a fuller list of the signers.]

A Honda worker in China speaks out at close of historic strike

By Labor Notes

June 6, 2010 -- “Our parents have suffered from this cheap labour market and now they are getting old. Do we want to follow in the footstep of our parents?”, asks an anonymous Honda worker in China in an internet posting explaining the motivations behind a stunning two-week strike that shut down Honda’s production across the country.

Strikes are not illegal in China, but they are usually crushed, hushed up or settled so quickly few outside the immediate vicinity become aware of them. This action, to the contrary, starved Honda’s four Chinese assembly plants of key transmission and engine parts, set off a near-panic in the business press as investors fretted about the open show of defiance, and reportedly succeeded in winning a 24 per cent pay increase.

The 1900 workers at the parts plant, who make between $131 and $219 a month, had walked out demanding a 53 per cent rise in compensation and the ability to elect their union officials. There's no information yet about whether that demand has been met, but the plant is restarting production today as a small group of militants holds out against the settlement. Two strike leaders, meanwhile, were fired during the action.

Here’s the post, discovered and translated by Hong Kong labour activist Au Loong-Yu:

Honda is a Fortune 500 company! It earned more than 4 billion yuan (US$586 million) last year! It earned more than a billion the year before that! Let’s compare Honda with other businesses. But none can really compare with it! This is a Fortune 500 company which earned more than 4 billion in 2009 but only pays minimum wages to workers. It gives you a 1000 yuan a month, which is only enough for food, and holidays are not included! Would you dare to work for this company?

You may say Honda has contributed to our pensions and other companies have not. Mind you, it is illegal for employers to fail to contribute to a pension fund. You must file complaints to the labour bureau. A Fortune 500 company simply cannot do such openly illegal things! This time it increased our wages. 355 yuan! The increase is made up of a basic wage raise of 200 yuan, a living allowance raise of 35 yuan and a meal allowance raise of 120 yuan. You may say that after this pay raise our wage level reached 1500 yuan. All surrounding businesses also offer wages at this level. But how can one compare Honda with other businesses when Honda earns more than 4 billion yuan in annual profit?

And this profit may even increase in the future. We all know that the automotive industry is a highly profitable industry. This is created by us frontline workers! But what do those of us who create the profits get? If we are not satisfied we can of course resign, but Honda will continue to recruit people, and our brothers and sisters would continue to suffer here! Even if we quit we have to fight for our brothers’ and sisters’ benefit! This is another reason for us to continue to strike!

Some people even say that because we are just secondary technical school students and vocational school students, we do not deserve higher wages. First of all I would like to ask: are you looking down on us as technical secondary school students? I strongly despise you! Although we are technical secondary school students, we have created a profit of 4 billion yuan a year! Can you do that? No, you can’t!

On May 17 when the strike began, the high-level Japanese management ordered us to resume production. We responded that we would do so and gave them a week to reply to our demands or else we would quit. Then they secretly fired our leaders! The general manager, in his office, mocked us as fools. Where was their good will? So we went on strike again on May 21.

The Japanese managers have resorted to taking pictures of us, to threaten us to resume production! At this critical moment our great trade union did nothing for us! Instead they just wanted us to go back to the production line! Is this what a union should be doing? You take from our monthly wages 5 yuan for union dues but look what you had done for us!

On May 22 the Japanese manager sacked two of our leaders to threaten us to resume production. So is this your good will? On May 24 you announced that you would increase our allowances from 65 yuan to 120, an increase of just 55 yuan! So this is your good will? And you continue to make video recordings to threaten us. This is another reason why we continue to strike.

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. Our wages are still at the level of the minimum wage. We are still struggling to get by with this. We created this wealth. 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?

This (kind of injustice) is just too common! 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 the 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!

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!

Open letter of thanks from workers' representatives of Honda Auto Parts Manufacturing Co., Ltd.

June 7, 2010 -- For the protection of workers’ rights and the right to democratic election of workers' representatives, the workers of Honda Auto Parts Manufacturing Co. Ltd has stopped work for nearly half a month. During the stoppage of work, we received support from both the domestic and international communities. The support has given tremendous boost in the morale of the workers’ struggle!

At 3pm on June 4, 2010, the management and the workers' representatives had formal negotiations. In the presence of Mr. Zeng Qinghong, member of the National People’s Congress (deputy director and general manager of Guangzhou Automobile Group Co., Ltd.) and Mr. Chang Kai (director of the School of Labor and Human Resources of Renmin University of China), both sides reached consensus in the negotiation of workers’ wages.

The labour disputes have brought great damage to both the management and the workers. It is our wish therefore to build an effective communication platform as the next phase of work. On the workers' side, we hope to achieve democratic election of trade union representatives and the establishment of a collective negotiation mechanism to ensure protection of the interests of both the management and workers. Only with a real and effective communication platform between the two sides can further disputes be prevented and harmonious labour-management relations established.

On behalf of all the production-line workers, the negotiation delegation would like to express our truest and most sincere gratitude to all the people who have shown their concern and given their support to us in the domestic and the international communities. Without your support and encouragement, our strength was limited and our demands would not have gained attention and resolution.

To many people who have conveyed their apprehension about us, we would like to assure you that we will act according to the law and regulations for what is entitled to us in a reasonable manner. We strongly believe that through adequate communication and mutual trust, we will be able to resolve disputes and establish good cooperative relation with the management in the future.

Elected workers’ representatives, Honda Auto Parts Manufacturing Co. Ltd, Nanhai District, Foshan City.

Honda Lock strike in China continues as industrial unrest spreads
By John Chan
12 June 2010, World Socialist web site

Strikes at Honda’s transmission and exhaust system plants in the southern Chinese city of Foshan that won significant pay rises, and ongoing industrial action by Honda Lock workers in Zhongshan, have been followed by strike action in other parts of the country. Workers are demanding higher wages, better conditions, and secure jobs in cities including Shanghai, Zhuhai and Xian, in both foreign- and state-owned enterprises.

The Honda Lock strike, involving 1,700 workers, appears to be intensifying, with employees yesterday morning rallying outside the factory before staging a short protest march, in defiance of black-clad riot police. Police left without clashing with workers. Honda nevertheless threatened workers over loud speakers that they would face “serious consequences” unless they accepted the offered 100 yuan pay rise. Many Honda Lock workers currently earn the local official minimum wage of 900 yuan a month, $US132, for a 42-hour week. They are demanding an additional 800 yuan a month, 89 percent more.

On Thursday, the South China Morning Post reported, workers chanted at a factory fence: “Are we settling for 200? No way. 300? No! How about 400? No way.” A 32-year-old female worker from Hunan said: “We want the same wage level as Nanhai Honda workers. Not a single cent less.” A 33-year-old worker from Guangxi told the newspaper why she had joined the strike: “I am in the paint spraying unit,” she explained. “The air quality is terrible inside. I’ve been sniffing toxic fumes for four years and only earn 1,800 yuan a month. The wage level is too low.”

The workers are not provided with dormitories, and must live in nearby apartments that typically cost $44 a month [300 yuan] for rent and utilities.

Honda Lock workers have also been provoked by oppressive workplace conditions. They are forced to stand for eight hours, with pregnant women allowed to sit only in their last trimester. Workers are not allowed to speak to one another, have to obtain passes before going to toilet, and are strictly monitored by management even when getting a drink of water. The strike was triggered on Wednesday morning when a company security guard denied a female worker entry to the plant because her ID card was supposedly improperly attached to her shirt, and then forced her to the ground after she protested.

Honda Lock employees have elected a council of shop stewards to negotiate with management. The workers’ organisation was formed in opposition to the state-controlled All China Federation of Trade Unions (ACFTU), and some have called for a new independent union. “The [ACFTU] trade union is not representing our views,” one unnamed striker told the New York Times, “we want our own union that will represent us.”

These developments represent a direct challenge to the Chinese Communist Party’s ban on any independent organisation of the working class, which has been in place since Mao’s peasant armies came to power in 1949.

The Financial Times yesterday reported: “At plants where the strikes are continuing, plain-clothes surveillance of workers and reporters is increasing.” The full extent of the strike wave across China remains unclear, as some have reportedly been settled or suppressed shortly after emerging, while other struggles have been deliberately ignored by the state media.

In Zhuhai, Guangdong province, nearly a thousand workers in a Flextronics plant struck on Thursday, demanding a pay rise to bring them in line with the 2,000 yuan received by Foxconn workers. US-owned Flextronics is the world’s second largest outsourcing electronics manufacturer, after Foxconn, and employs 30,000 workers at its Zhuhai plant. Workers complained that they are subject to a brutal production regime similar to Foxconn, but receive just 965 yuan a month. This wage is similar to that at Foxconn before a series of suicides forced the company to offer pay rises.

In Shanghai, 2,000 workers at TPO Displays, partly owned by electronics giant Foxconn, went on strike on Wednesday, protesting against rumoured company plans to relocate the plant to Nanjing. The workers produce LCD screens for mobile phones and GPS devices.

In Xian, Shaanxi province, Japan’s Brother Industries’ two sewing machine plants were shut down by a strike of 900 workers that began on June 3 in demand of higher pay and better conditions. The ACFTU head of the factories claimed that workers had agreed to return to work last Thursday, after the Japanese management made concessions.

In Jiujiang, Jiangxi province, 8,000 workers protested at a Taiwanese-owned sport equipment factory. Last Saturday, a female worker not wearing her ID card was blocked from entering the plant, leading to an argument in which security guards assaulted another worker who tried to mediate. After rumours circulated that he died had from his injuries, the pent-up anger at the plant erupted on Monday and workers smashed the security department, factory gate, equipment and vehicles. The strike ended when 200 police officers arrived and arrested the security guards who had attacked the worker. The police remained to ensure that production resumed.

In Hubei province’s Suizhou city, 400 workers staged an anti-privatisation protest in front of their state-owned textile factory. The plant had been sold to a private business owner who was unable to revive production, and instead plundered workers’ pensions and other benefits. The local authority bought back the enterprise, only to sell it to real estate developers. Workers began protesting the sale last month and the issue remains unresolved.

The international financial press continues to watch the emerging workers’ movement in China with great unease.

A comment by Tom Mitchell in Wednesday’s Financial Times warned that disruption to global supply chains caused by industrial action would likely prove just as damaging to investors as wage concessions. “The complexity of the global supply chain may be something to marvel at—but it comes at a price,” he noted. “The inherent fragility of a farflung system with millions of interactions can lead quickly to negative widespread repercussions for the companies whose futures are bound up with it.

BusinessWeek commented on Thursday that the young generation of Chinese workers “are far more aware of world developments than their parents”, thanks to widespread Internet and mobile phone use. Frank Jaeger, a German factory owner in Dongguan complained: “Every worker is a labour lawyer by himself. They know their rights better than my HR officer.” Harley Seyedin, president of American Chamber of Commerce of South China, said: “There are Internet cafes everywhere, so the workers can get information. They are starting to ask for more. The days of cheap labour are gone.”

Hong Kong’s Economic Daily yesterday warned that strikes may “spread across the country”. It stated that while some large corporations could afford wage concessions, there were limits. Transnational firms could pull out of China if higher profit margins were on offer elsewhere, while many small and medium companies could collapse if forced to issue 20-30 percent wage rises. The Economic Daily also explained that although it was important for Beijing to encourage domestic consumption, granting higher wages carried huge risks: “Given the current sharp social tensions in China, strikes may mix up with other social grievances, evolving into demonstrations and even unrest against the [existing] society and even the government, shaking social stability.”

The CCP is well aware of the dangers posed by the growing strike wave. Currently it is treading a fine line, hesitating to unleash repressive measures against the striking factory workers for fear of triggering a broader oppositional movement, while at the same time preparing for violent confrontation to suppress the working class, as it has done in the past.

URL http://wsws.org/articles/2010/jun2010/hond-j12.shtml


by Lang Yan | 9 June 2010 |

While I was walking around the Shanghai World Expo on a weekday a couple of weeks ago I met a group of workers from a nearby clothing sweat shop. Their company had sent them to the Expo for the day (for which they had to trade their only day off, Sunday). They were too tired to enjoy the Expo as they worked 14 hours a day, six days a week. While this may seem like a nice gesture on the part of the company, the workers also explained that the company was moving much of their production to another building that week, because a worker burned much of the factory down after not being paid on time. I heard this story just as the news of the Foxconn suicides began to break into the media and shortly after that the Honda strike began.

Within public discussion, the Honda wildcat strike has transformed the meaning of the Foxconn suicides. Early interpretations of the Foxconn suicides tended to argue that the suicides should either be understood as individual psychological issues and as copycat suicides, on the one hand, or a result of the particularly brutal and alienating conditions at Foxconn, on the other. Some marshaled statistics to show that there were no more suicides at Foxconn than the social average when one considers the size of Foxconn (for example, see Tom Holland “Why there’s less to the suicides at Foxconn than meets the eye” and Michael R. Phillips “Foxconn and China’s Suicide Puzzle Workers: may not be taking their own lives for the reasons everyone thinks” ). Statistics average out, in other words, the social difference of the militarized factory space; Foxconn was treated as a normal social space, a city. (For a discussion of suicide rates and Foxconn, see EastSouthWestNorth #19 . Notable also is that the Chinese rate of suicide for people 15 to 34 is quite high. See Suicide main cause of death in 15 to 34-year-olds .)

Analysis of the social and work conditions at Foxconn also appeared. The particularly militarized and alienating work environment at Foxconn is a result of capital’s relentless drive to lower assembly costs and the Asian subcontracting regime; reform-era China and the CCP have been a willing partner in that effort. Activists and scholars have argued that Foxconn is one of the worst factories in terms of it labor regime, with a very long (usually about 70 hours) work week (since the pay structure means that workers must work a lot of overtime) and a very rapid assembly line. Foxconn was able to become the world’s largest assembly company exactly because of its harsh Taylorist production process, which cuts up the process into highly regimented movements, its ability to intensify labor exploitation and its repressive management style (See this article by Andy Xie for some analysis and background on the Taiwanese management style). There are reports that Foxconn initially responded to the suicides by pushing workers to sign contracts that they would not commit suicide, and stating that their families would not receive compensation if they did. It went so far as to state that suicide harmed Foxconn’s reputation.

But the successful Honda wildcat has changed the discussion. The suicides and the strike are being put into the context of changing labor relations in China, with many now arguing that Chinese labor is at a turning point.

For example, NPR’s Marketplace (Honda, Foxconn workers demand more power ) argues that a “labor shortage in China is empowering workers to demand better wages and treatment at their workplaces….” In a discussion of the Honda strike, Reuters notes that “[s]ome other foreign companies have begun to address workers’ discontent over pay and working conditions. Taiwan’s Hon Hai Precision Industry Co Ltd for instance plans to raise salaries by about a fifth at its Foxconn International unit, maker of Apple Inc’s iPhone, as it struggles to stop a spate of suicides and quell public anger.” Foxconn has said that it will raise base salaries by 30% now with more raises to come in the near future. Clearly this wasn’t only caused by the suicides, however. Foxconn was planning a salary increase earlier in the year in response to the difficulty hiring workers due to labor shortages.

The Honda strike (workers’ demands included wage increases from about 1,500 yuan (less than $220 US) to about 2,300 yuan ($337 US) for higher paid workers) is likewise getting more press than any other worker action in recent years.

China’s economic stimulus has given large subsidies for car sales, and car manufactures are attempting to rapidly increase production in China. Honda plans to add a third to its Chinese production by 2012. But its integrated production process is vulnerable to strike activity. This is particularly true of transmission plants, which are highly automated and expense to construct. Thus they are usually put in the most stable regions, notes the New York Times. But the stability of the Chinese working class is now in doubt. According to the Wall Street Journal :

“The strike has exposed unexpected vulnerabilities in Honda’s China
supply chain. Because of the relative absence of labor unrest in
China, Honda makes do with only one source of transmissions there,
the Foshan factory that supplies roughly 80% of demand, according to
Mr. Fujii. The rest are brought in from Japan. Typically, Honda
insists on at least two suppliers of parts, partly to protect
against any industrial action that might cripple production.”

While quick to tamp down any political interpretation of the workers’ activity, the New York Times argues that in the beginning the state allowed media coverage of the strike because it wants to push up internal demand. On the other hand, the China Daily (in an article now taken off their website) used the strike to editorialize that the Chinese state needs to do more to raise the wages of workers. Since the end of the strike, Chinese media coverage has continued while broadening its analysis. At the same time, the government seems to be increasing its efforts at raising the wages and internal consumption. This follows several years of increased investment for rural China, which means there is less pressure for peasants to migrate out for work.

/Broader Implications: First question looking forward:/

What does this mean in terms of the changing Chinese political economy? A few points: Increasing wages in China could help rebalance the global economy. As their wages increase Chinese workers will be able to spend more (the wage share of GDP fell from 56.5 percent in 1983 to 36.7 percent in 2005). A rise in internal demand will mean a drop in the savings rate in turn forcing a rise in the savings rate in the US. This will likely also mean inflation, which is already a problem with the huge Chinese stimulus, yet inflation is also another way–other than a direct change in the exchange rate–for the Chinese state to rebalance its trade relationship with the US. The power of the export manufacturers in China seems to have been able to keep the state from changing the exchange rate to any great extent, but inflation might help take care of this for the state. Of course inflation will eat into wage increases and possibly lead to more social unrest. Meanwhile, the Beijing government announced on June 3rd that it was raising the minimum wage by 20% in response to inflation–the past few years it was raised about 10% per year. Other regions are following suit.

The June 7th issue of The Economic Observer (Jingji guancha bao) has articles on the labor situation noting that both the Honda strike and the situation at Foxconn are symptoms of a broader change going on in the Chinese labor market. One article argues that China has reached the “Lewisian turning point” . Arthur Lewis argued in 1954 that, for a period of time, developing countries could rely on rural surplus labor to keep wages from rising. This would allow them to industrialize without wage inflation. But once rural surplus labor is absorbed by the industrial economy and the labor market unifies wages will begin to increase more rapidly. The influential economist Cai Fang has been predicting this shift for some time, and in 2007 edited a volume on the turning point called “The Coming Lewisian Turning Point and its Policy Implications.”

Arthur Kroeber argued in the March issue of China Economic Quarterly that China’s cheap labor regime was coming to an end and that wage inflation will drive up the consumption share of GDP. In the planning for the 12th Five Year Plan, the CCP itself emphasizes this rebalancing and the important role that raising the wage share of GDP should plays in the process. At the same time, some commentators seem to be taking this argument a bit too far. Andrew Peaple states that “the dynamics of China’s economic development are moving inexorably in favor of the country’s workers.” While this will change the shape of the Chinese economy, its effect on capital will be mixed. Higher wages will mean more consumption, helping many companies as much as it hurts. But the assembly and clothing industry in the Southeast will be hit hard, as those plants are both more easily moved to other, cheaper-wage countries and have thinner profit margins. It is too early to say what this transition (of the Chinese economy and of the Chinese labor process) might mean more globally.

/A second question looking forward:/

Does the Honda strike indicate increasing self-activity of the working class in China? Certainly the example of the success of workers in the Honda strike in winning some wage increases (initially about 24% but in the end much more) might spread to other workers in China. Also, the strike itself was very highly organized, leading to the participation of about 1,900 workers (including a large number of low-paid interns). The workers seemed split, however, when gave in to a lower wage increase than initially demanded. The People’s Daily reports that the hold out group was involved in a confrontation with representatives of the state union, the ACFTU. (The local ACFTU seems to be playing a more conservative role–by protecting Honda–than even the state-run media.) The World Socialist Website details the attempts by the company to split the workers by putting pressure on the interns to sign no-strike pledges in return for smaller wage increases. According to The China Daily , the strikers also demanded changes in work conditions, more transparency in company finances (this seems like a reflection of the history of worker democratic involvement in enterprise management in China), and a change in union representatives. The New York Times points out that workers complained that Japanese employees at the Honda plant make about 50 times that of Chinese workers. It is likely that nationalism has also played a role in how this strike has been reported in China. Most of the workers held out, however, and the agreement reached will lead to high wage increases. Kroeber talking Reuters stated that “Foreign investors have been lulled into a false sense of security that China has a docile work force. There’s nothing intrinsically docile about the Chinese labor force. There was a period when everything was kind of fine; now we are entering a period of more constraint.” Following the Honda strike, workers at a Hyundai factory near Beijing went on strike, but returned to work after they were immediately promised wage increases. Over 5,000 textile workers in Pingdingshan, Henan have been out on strike since May 14th at a factory privatized in 2006.

As the WSWS notes of the Honda strike:

The strike is a sign of sharpening class tensions in China amid the
worsening global economic crisis. While China’s economic growth rate
continues to be high, propped up by huge stimulus spending, the gulf
between rich and poor is widening. Last year there were 98,568
labour disputes filed in Chinese courts, up 59 percent on the
previous year. Most disputes, however, were not reported.

It remains to be seen, however, how successful the CCP’s attempt at economic transition will be. We need to know how much of China’s growth and job creation is due to the stimulus and how sustainable it is. The unsustainable property market is creating an investment bubble. Just as likely as transition to a consumer-based economy, inflation could lead to stagflation once the property bubble bursts and the initial affects of the stimulus wear off. The real question is what then for the activity of the Chinese workers. They are clearly learning important lessons now. The fundamental question is whether their new found strength will lead to a break from the domination of capitalist accumulation or not.



By Li Chengrui, et al. | 13 June 2010 | No Comment | Last modified: 13 Jun 9:34 pm

Chinese version on Critique & Transformation.

Translator’s note: “Regarding the present upsurge of worker action in China, liberals have used their discursive power in the overseas media to frame the strike wave as a tale of workers’ struggle for ‘independent unions,’ as if this were a repetition of Solidarnosc. What do Chinese workers want? What is the direction of the Chinese workers movement? Those who support the movement and are concerned about the fate of the working class should provide an account matching the reality of the movement. This letter of support provides a perspective different from those predominant in the mainstream media.”

Uphold the Constitution, Respect and Ensure Human Rights,

Support Honda Workers’ Just Struggles,

Condemn Foxconn’s Inhumane Management

(June 6, 2010)


General Secretary Hu Jintao and Members of the Central Party Committee,

Chairman Wu Bangguo of the People’s Congress

Premier Wen Jiabao, Vice Premiers, and Members of the State Council

Compatriots throughout China, and all Media Outlets:

There have recently occurred numerous incidents in our country that signal intensified social contradictions. According to media reports, Shenzhen-based Foxconn with Taiwanese investment have treated workers as machines (or worse, just spare parts!) to generate profit for the company and instituted an inhumane management system that destroys the health and spirit of workers to the extent that some have felt that life is not worth living. Thirteen workers in this company have jumped to their own deaths in a short period of time.  Their tragic deaths break our hearts.  It is a situation that has shocked the world!

Based in Foshan, Guangdong, Honda Auto Parts Manufacturing Co., Ltd. is a Japanese-owned company. While the capitalist owner has made a huge profit, the wages are too low to support workers’ livelihoods and the company’s union does not represent the interest of the workers. Nearly two thousand workers have gone on strike in their struggle for wage increases and to initiate a reform of the union. But the Japanese management only agreed to a small increase, far from what the workers have asked.  Moreover, the management unjustifiably demanded workers to sign a “no strike” commitment and threatened to fire workers who take part in the strike. They indeed fired two leaders among the workers.

Other incidents in the media also show increased conflict between capital and labor. Some workers in Chongqing Qijiang Gear Transmission Co. Ltd were forced to work overtime during weekends and died from overwork. The long-term exhaustion, low pay and management corruption led workers to strike. Close to 1700 workers from Taisheng Furniture Company, based in Dongguan, Guangdong Province, had a three-day strike to protest against overstress and low pay. Over a thousand workers in the spare parts factory that supply Beijing-based Hyundai went on a strike to demand a pay raise. Workers at Lanzhou Vinylon Company went on strike because they cannot sustain a basic livelihood. In Datong City (Shanxi Province), the state-owned enterprise Xinghuo Pharmaceutical Company was forced into bankruptcy and its laid-off workers had their numerous petitions refused. Following this, over 10,000 people staged a sit-in at the municipal government building; some of them were beaten up by armed police. Workers on strike from Pingdingshan Cotton Spinning Mill (Henan Province) were brutally beaten by thugs brought in by police vehicles, resulting in injuries of many women workers. In Shenzhen workers who are taking the lead to demand back pay or protect workers’ rights have had their names placed on various blacklist, which makes it difficult for them to obtain employment. These are just some of the recent incidents that illustrate the scope of the problem.

On the whole, the bourgeoisie have transferred the burdens of the economic crisis onto the workers and have waged a more fierce attack on them. The working class is forced to rise up and resist. But as workers have become a weak social group in recent years, and with the deprivation of basic rights prescribed by our country’s constitution, they are in the sad situation where their deaths are unanswered, their strikes unsupported, and their grievances unheard. According to our country’s constitution, particularly the four basic principles and the basic rights accorded to citizens, we issue the following appeal to address the current situation and problems.1

First, we should firmly support workers in Foshan Honda and other factories in their just struggles for survival and against oppression. Article 33 of our country’s constitution states, “the state respects and ensures human rights.” The right to strike is an inseparable part of human rights and is also a basic civic right prescribed by constitutions around the world. We firmly support all reasonable demands that Honda workers have raised so as to change their harsh working conditions and low wages. We are strongly opposed to the management’s threat to fire workers. The two leaders who were fired should be immediately given back their jobs.

We believe that our call will be supported by all those who uphold the authority of the constitution, respect human rights and stand for justice.

Second, we should demand Foxconn and other similar enterprises to immediately stop their inhumane and harshly exploitative management methods. We demand that the management respect workers’ integrity and dignity, obey the state laws, improve working conditions, strictly implement a 8-hour working day and compensate workers’ for overtime. They must ensure that workers are paid wages that are enough for their own sustenance and their reproduction. This is the only way to ameliorate labor-capital conflicts and reduce or prevent the so-called “psychological” problems.  To elide the fundamental labor-capital contradiction by one-sidedly emphasizing “psychological counseling” is to intentionally cover up the contradiction and to confuse cause with effect. It has been reported by the media that some who committed suicide also showed signs of bodily injuries caused by beating.  There was also suspicion of some being pushed off buildings. These already warrant a criminal investigation. Government agencies should deal with it seriously and find out the truth.

Third, unions should clearly stand on the side of the working class to represent and uphold the interests of the working class as prescribed by the constitution. If any union organization ignores the constitution and “take the boss’ shillings and do the boss’ bidding,” then they will be spurned by the working class. The leadership of the union in each enterprise must be democratically elected by its members. Relatives and representatives of the bosses should not be allowed to take any leadership position in the union. If such a case is found, it should not be approved by the union at higher levels.  The union at higher levels should instead help such enterprise-based unions organize an all-members meeting and help rebuild the enterprise’s union through democratic election.

Fourth, government at all levels, particularly the local government should protect civic rights by strictly following the law, earnestly resolve labor-capital conflicts and ensure citizens’ freedom of speech. Government should administer according to the law and should prevent and stop incidents that violate basic civic rights prescribed by article 33 of the constitution and other related regulations. It should actively deal with cases of labor-capital conflicts according to the law. Ignoring workers’ reasonable demands either through inaction or siding with management should be resolutely corrected.   In order to ensure people’s right to information and right to supervision, media should be allowed to freely and truthfully report on labor-capital conflicts and other cases and convey people’s voices without obstruction and interference.

Fifth, we call for the restoration of the working class as the leading class of our country and the re-establishment of socialist public ownership as the mainstay in our national economy. Article 1 of our country’s constitution states, “The People’s Republic of China is a socialist state led by the working class on the basis of a worker-peasant alliance.” Article 6 of the constitution states, “The basis of socialist economy of the People’s Republic of China is socialist public ownership of means of production, that is, all people’s ownership and laborers’ collective ownership.” “In the primitive phase of socialism, the state should build an economic system with public ownership as the mainstay and co-development of the economy through other ownership forms. Distribution should be based mainly on each according to his/her labor, with co-existence of other distributive methods.” The Chinese Communist Party must be the real vanguard of the working class, strengthen its leadership of the people’s polity, and reinforce the people’s democratic dictatorship. We call for a reestablishment of public ownership as the principle part of the national economy. Only in this way can workers, peasants and people in general become masters of enterprises and the country and truly implement a distribution system primarily based on labor contribution. At present, it is imperative to improve working conditions and increase wages and benefits in the private economy (funded by domestic and foreign investments). It is completely just to actively support workers’ struggles towards that end. But in so far as the capitalist privately-owned economy rather than the socialist publicly-owned economy dominates, the working class cannot change their weak position under structures of exploitation, nor the unfair distribution system and the disparity between the rich and poor. Under this condition, it is also impossible to transform our export-oriented economy to one that is independent, self-reliant and seeks to satisfy the material and cultural needs of people in the country.

Based on the present conditions, it will only be through a long-term struggle that the working class can restore its leadership position and the national economy can be transformed into one primarily based on public ownership. We have the guidance of Marxism-Leninism-Mao Zedong Thought and have the constitution, particularly the four basic principles at its core, as our legal instrument.  All members of the Communist Part and all people should abide by the constitution. The socialist modernization that we uphold fits the interest of the broadest range of people and corresponds with historical development of mankind. If all people who support socialism, love their country, and abide by the constitution are united and persistent, then through a long-term struggle, we will be able to realize our goal.


Li Chengrui (Former Director of the State Statistic Bureau)

Gong Xiantian (Professor of Beijing University)

Han Xiya (Former Alternate Secretary of the Secretariat of All-China Federation of Trade Unions)

Liu Rixin (Former Researcher at the State Planning Commission)

Zhao Guangwu (Professor at Beijing University)

DATE: June 29, 2010

TO: NLC Contacts

FROM: Charlie Kernaghan

RE: U.S.-owned Hi-tech Jabil Circuit Factory in China--Run like Minimum-Security Prison,
Producing for Whirlpool, GE, HP, IBM - Please Act Now to help these workers!

Today, the National Labor Committee is releasing a 30-page report (http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=iwirwjAo%2FqYHhe…) documenting the illegal and harsh sweatshop conditions at the Jabil Circuit factory in Guangzhou, China, where over 6,000 workers-many of them illegal temporary workers-produce hi-tech products for HP, IBM, Intel, Cisco and Jabil-all of whom are Board members of the Electronic Industry Citizenship Coalition. The new report includes worker interviews, photographs and company documents smuggled out of the factory.

Cruel and inhuman conditions at Jabil:

* The factory operates around the clock, with two 12-hour shifts, seven days a week. Workers are at the factory 84 hours a week.

* Assembly line workers are prohibited from sitting down and must stand for their entire 12-hour shift. Workers report their necks, shoulders, arms and legs become stiff and sore, and their feet swell up.

* Workers are allowed to use the bathroom just once in the regular eight-hour shift.

* Jabil hires a huge number of illegal temp workers and pits them against the full time workers.

* Security guards and managers patrol the shop floor as if they are police overseeing their prisoners. Workers who make a mistake are forced to write a "letter of repentance" begging forgiveness-which they must read aloud in front of all their coworkers. They can also be made to stay after work-unpaid-to clean toilets.

* Six workers share each crowded dorm room, sleeping on double-level bunk beds. Seventy-five percent of the workers say the factory food is "awful."

* Workers paid a base wage of 76 cents an hour through April, when they received a 17-cent increase, to 93 cents an hour, which is well below subsistence levels.

NLC director Charles Kernaghan asks, "What happened to all the promises U.S. companies made-that if they could set up operations in China, they would, by example, lift human, women's and worker rights standards for China's workers? Instead, U.S. companies bought into the 'China model' of exploitation, pitifully low wages, grueling hours, miserable living conditions and zero rights." Kernaghan adds, "Corporate monitoring never works. Five out of eight of the companies on the Board of the Electronic Industry Citizenship Coalition have been producing their goods for years under illegal, harsh sweatshop conditions at the Jabil factory!"

Please Act Now!

Call or write the Electronic Industry Citizenship Coalition (EICC):

Phone: 202-962-0167

1155 15th Street, NW
Suite 500
Washington, DC 20005

Talking Points:

I have read the new National Labor Committee report on the Jabil Circuits factory in China.

With five of eight Electronics Industry Citizenship Coalition (EICC) Board member companies producing at Jabil, how could so many violations and harsh conditions have persisted at the factory?

What will you do to end the violations and abusive treatment of the young workers at the Jabil?
* All overtime must be strictly voluntary,
* Humiliating treatment, including "letters of repentance" the workers must stop,
* Temps should be hired as regular full time workers,
* Workers must have the right to use the bathroom more than once in an eight-hour shift,
* Assembly lines should be re-fitted so workers are not standing 12 hours a day,
* The workers right to organize a democratic, independent union must be respected.

Please let me know how you intend to correct these violations at Jabil.