Strikes Spread in China

Does labor action signal the end of the low-wage era?
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Workers confront police outside a factory in Kunshan in Jiangsu province, June 7, 2010.
Workers confront police outside a factory in Kunshan in Jiangsu province, June 7, 2010.

HONG KONG—A series of high-profile labor disputes likely signals the end of low-cost manufacturing in China, as workers walk out at three Honda plants in the Pearl River Delta and at a Taiwan-invested machinery plant in Jiangsu, analysts and activists say.

In the latest strike in southern China's Pearl River Delta region, workers at a third Honda auto parts plant in Guangdong province took to the streets Wednesday, official media reported.

The strike at Honda Lock (Guangdong) came after Honda was forced to suspend production at two of its Chinese factories because of disputes at parts joint venture Foshan Fengfu and at a wholly owned subsidiary parts supplier.

Production was suspended Wednesday at the two factories of Honda joint venture Guangqi Honda Automobile Co., Honda said in a statement, citing "a labor dispute."

Foshan Fengfu is a joint venture between Honda subsidiary Yutaka Giken, which owns about 70 percent, and a Taiwanese firm called Moonstone Holding.

Located in Foshan, a city in southern China's Guangdong province where Honda has its joint venture with Guangzhou Auto Group, the company makes exhaust pipes and other parts for Honda's Odyssey, Accord, and Fit models.

An employee who answered the phone at Foshan Fengfu Autoparts declined to give details of the strike.

"It's not convenient for me to talk about this," the employee said.

Rising pressure

Guangdong-based civil rights lawyer Tang Jingling, founder of a grassroots organization called "The Citizens Aren't Cooperating," said the Pearl River Delta region has recently seen rising pressure for improved wages.

This began with a series of employee suicides at Shenzhen's Taiwan-owned Foxconn, and progressed to the Honda parts factories, Tang said.

"The workers have become a dispossessed group in the process of economic development," Tang said.

"The wealth has been appropriated by a small number of people. The workers' common theme is that they haven't enjoyed any of the benefits of increased wealth."

He said today's migrant workers in China's big cities are unlikely to simply return to their fields if they are being unfairly treated in the factories, because the new generation is highly motivated to achieve an urban lifestyle and is less accepting of social inequalities.

"They have been educated from a young age as far as high school or university. Once they graduate, they start to move to the cities to find work. So they must be allowed to set up home in the cities," he said.

Tang blamed the divide between urban and rural household registration systems for giving rise to the unfair treatment of rural migrant workers in China's cities.

"Their salaries are shrinking amid an absence of social security and with rising prices, and this has forced them to go on strike," he said.

Beijing-based economist Mao Yushi said the era in which China was a low-wage, low-cost environment to do business is now over.

"Now China has transformed itself from a poor country into a rich one. But the salaries for a sector of the labor force have remained very low, so how is this a rich nation?"

"These strikes were bound to happen sooner or later," said Mao, who blamed population control policies for the shortage of young people available to work in factories.

"China has made very fast technological advances," Mao said. "We can make things now that we could never make in the past."

"China is now manufacturing large-scale machinery and equipment of its own. For example, computer-controlled machine tools, ships that can carry liquefied petroleum gas. China's high-speed railways are the fastest in the world."

"This is all high technology and [involves] highly complex levels of organization," Mao added.

Rights activist Xiao Qingshan said part of the recent labor problem at Foxconn and the Shuyuan Machinery Plant in Jiangsu, which also saw a recent protest for higher wages, lies with the attitude of management to the workforce.

Management trouble

"According to what we have heard from workers at Foxconn, the management often verbally abuses its staff and ignores their rights," Xiao said.

"Management should treat workers as human beings and in a reasonable manner. They should not regard them as machines for production. This can easily lead to a loss of mental balance among the workers."

The strike at the Foshan Fengfu plant came as Foxconn—the world's largest contract maker of electronics—announced two pay raises for its Chinese workers after the recent suicides and began installing safety nets around buildings and hiring more counselors.

Protesters picketed Foxconn's annual general meeting in Hong Kong on Tuesday, accusing both the Apple Inc. supplier and the U.S. high-tech giant of poor corporate ethics.

The 30 demonstrators held signs saying, "Workers are not machines. They have self-esteem," outside a hotel function room where shareholders of Hong Kong-listed Foxconn International Holdings were meeting.

Higher minimum wage

Also in the Pearl River Delta, Merry Electronics Shenzhen said Tuesday that it had resolved a strike that began over the weekend by workers who were disgruntled over pay and working hours.

China has begun raising its minimum wage in an attempt to close the growing gap between rich and poor.

From July 1, the minimum wage in Beijing will rise by 20 percent from the current level of 800 yuan (U.S. $117) a month, while the minimum wage in Shanghai has recently risen to 1,120 yuan per month (U.S. $164.20).

Guangdong province, including the Pearl River Delta, currently has the highest hourly minimum wage, which stands at 9.9 yuan (U.S. $1.44), official media reported.

Original reporting in Mandarin by Tang Qiwei and Xi Wang, and in Cantonese by Grace Kei Lai-see. Cantonese service director: Shiny Li. Mandarin service director: Jennifer Chou. Translated from the Chinese and written for the Web in English by Luisetta Mudie. Edited by Sarah Jackson-Han.





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