Labour rights and OccupyCentral

Why labour movements in Hong Kong and China are crucial to the democracy movement. In this latest post, I look at debates about labour rights and unions in mainland China.

Events in Asia have been focused on the enormous and inspiring protests against Chinese state interference in Hong Kong’s parliament. At the time of writing, the protest movement is still unfolding and, while I have no expert or insider knowledge of it, I agree with my friend Kevin Lin’s analysis that it will be more difficult to deal with the Communist Party’s intransigence unless the movement can deepen from the streets to the workplaces and communities. As well as this informative piece, Kevin has offered an excellent analysis of the class divisions that underpin the city as a global hub of finance capital and the gateway for foreign investors into mainland China. According to the Hong Kong Confederation of Trade Unions, about 10,000 workers have been involved in strike action in support of the street protests. Such actions partly reflect the low real wages and precarious employment that afflict large parts of Hong Kong’s working class population. Whether or not questions of social class or labour movements are in the minds of protest organisers, these actions, as well as the dockworkers’ strike last year, suggest that it might be possible to widen the protests from a predominantly street-based movement to one that can leverage workers’ structural power to achieve its democratic aims.

For me, this raises two strategic questions: one, as Kevin Lin and others have suggested, is the central role of workers and labour movements in the struggle for democratic rights in China. The other concerns the role and power of the Chinese state. The extent to which protestors are thinking about these questions is not something I can address. But, in the following post, I want to post my thoughts on some recent interventions on the labour movement in mainland China. In a later post, I will offer some thoughts about the role of Chinese state institutions and nationalism in shaping workers struggles. I also want to point out that the following musings are not based on any expertise of my own—they are based on my readings of debates among genuine China specialists and, as usual, reflect my preoccupation with labour movements in Asia. They also reflect my belief that we need to situate current events in Hong Kong in the contest of social struggles in mainland China, in which labour rights play a central role.

On Chinese labour movements

Strikes and protests are extremely common in China and have been in the rise for many years. There invariably occur outside the influence of the All-China Federation of Trade Unions (ACFTU), which is basically an institution of the state. One estimate is that there was a 14-fold increase in ‘mass incidents’ from 1994 to 2008, with perhaps a third of the 127,000 incidents in 2008 related to labour struggles (Elfstrom and Kuruvilla, 2014). There has been considerable discussion about the importance of the 2010 Nanhai Honda strike to labour struggles. In a fascinating excerpt from his new book, labour researcher Eli Friedman argues that labour protests in provinces like Guangdong in southern China have become more ‘offensive’ in character. Nanhai Honda, he argues, also demonstrates the structural power of workers in complex manufacturing production networks anchored in China. Like all foreign auto assembly firms in China, Honda operates in joint ventures with local state-owned enterprises. It partners with Guangzhou Automotive Group Corporation as well as enterprises in other parts of the country. However, foreign auto firms are allowed to operate 100%-owned supply firms.

Nanhai Honda, established in 2007, is one such supply firm which manufactures parts for Honda’s joint ventures assembly operations. There was an official union at the plant but, as Friedman explains, it was incapable of representing its 2,000 employees’ interests. His excerpt outlines in fascinating detail how informal discussions among a small number of workers unhappy with their wages developed into strike action. This took most other workers by surprise when it began in May 2010. Not all workers joined the first strike action, with just 50 workers initiating a sit-in at the factory gate and returning to work the following day. Three days later, attempts to achieve a negotiated outcome broke down and 300 workers went on strike. The dismissal of two strike leaders further galvanised the strikers. Within a week, Honda’s entire operation in China was shut down. With the firm losing RMB 240 million a day (about $AU 45 million), the workers formalised their demands for higher wages and union ‘reorganisation’.

Throughout the process, the plant union alternated between passivity and openly supporting management by attempting to sow divisions among the workers. Friedman argues that, if anything, the ham-fisted attempts by the union to sabotage the strike convinced workers to defiantly maintain their actions. The government deployed police to contain the strike and succeeded in the bringing it to a close. Workers were encouraged to formally negotiate with representatives and sought legal counsel: in other words, to engage in a process of collective bargaining. By early June the workers had achieved large wage increases. Regular workers’ wages increased by at least one third and low-paid interns’ wages increased by over 70 percent.

Some analysts have interpreted the Nanhai Honda success as a defining moment in a general shift towards a more confident and assertive working class. For example, Elfstrom and Kuruvilla (2014) argue that favourable changes to labour laws, media reports of labour disputes and  growing labour shortages have acted as ‘cognitive cues’, influencing a shift from defensive to offensive campaigns. In the 1990s, struggles were more defensive, they argue: many workers in state-owned enterprises were trying to protect themselves against mass sackings while many of the tens of millions of migrant workers fought against discrimination in urban areas. Since the early 2000s, they suggest, workers have shifted towards a more offensive orientation by, for example, pushing for higher wages and improved employment conditions. Other scholars like sociologists Lu Zhang and Beverly Silver have expressed similar views about the militancy of Chinese workers (Silver, 2003; Zhang, 2011). Thus, the Nanhai Honda dispute is interpreted in this light.

Certainly, there is evidence of rising wages in China, particularly in the coastal manufacturing zones, during the 2000s (Riskin, 2014; Buckley, 2014). But the claim that these structural (and other) factors have made workers more confident to demand their rights requires more critical reflection. As impressive as Elfstrom and Kuruvilla’s (2014) record of labour disputes is, they appear to misinterpret some of the literature. For example, they suggest that leading China scholar Anita Chan believes there has been a shift to ‘interest-based’ demands. In fact, her (and Kaxton Siu’s) argument is that Chinese struggles have tended to be limited to ‘rights-based’ demand. In their study of migrant workers’ protests in China, Chan and Siu framed rights-based demands as the ‘push for legal compliance when legal rights are being violated’:

“In this sense, the law imposes a maximum on claims—these can be no more than the minimum standards that the law requires. Interest-based demands go beyond the minimum standards defined by law: for example, a demand for a wage rise above the legal minimum wage. Thus, the issue at stake in interest-based claims is not one of legality, but of whether management chooses to accept or resist workers’ demands” (Chan and Siu, 2012: 87-88).

The authors go further is suggesting that this ‘distinction between the two types of rights can only exist when the standards set by the labour laws are recognized as a legitimate framework for regulating labour relations’ (Chan and Siu, 2012: 88). Changes to Chinese labour laws in recent years, such as the Labour Contract Law 2008 (see Gallagher and Dong, 2011), represent attempts to channel labour disputes into institutional parameters that the state can more easily control. In this context, formal labour organisations, such as labour NGOs, have tended to restrict workers’ disputes to rights-based demands, not the interest-based demands as Elfstrom and Kuruvilla point to. If we incorporate this counter-argument, then we might interpret rising wages slightly differently: for example, what evidence is there that rising wages can be explained by employers attempting to retain workers in high labour turnover industries? The issue is not that more disputes and strikes have been happening—this seems beyond doubt—but what the political character of these disputes is.

One possible reason why ‘mass incidences’ have risen is the inability of official unions to represent the interests of workers and institutionally restrict the number and scope of disputes. As the Nanhai Honda dispute rather starkly demonstrates, enterprise-level unions, which are supposed to officially operate in every Chinese workplace, are tools of management or, in some cases, local government/Communist Party officialdom. In another article, Eli Friedman argues that recent attempts to establish sectoral unions (i.e. industry-wide unions) are unlikely to succeed as an alternative to workplace unions (Friedman, 2014). In Guangzhou, where Friedman spent many months of field research in 2008-2010, sectoral unions were undermined because of divisions within capital. Here, where most production comes from foreign firms, industry associations are often divided (e.g. by nationality) undermining the basis for industry-level collective bargaining from the employers’ side. While sanitation workers campaigned for a sectoral union in this period, only a tiny percentage of workers are covered by sectoral wage agreements.

Friedman’s fieldwork in the city of Wenzhou, Zhejiang province, reveals that sectoral unions were more prevalent due to the greater role of small-to-medium sized businesses. In the eyeglass sector, which employs about 12,000 workers in the city and produces about 60 percent of all spectacles in China, the impetus for industry-wide agreements came from employers and the state as a means of lowering labour turnover (Friedman, 2014: 492). This is a very important point as it implies that there are multiple strategies for workers in tightening labour markets. While some workers may take industrial action, others, like the eyeglass industry in the Rui’an area of Wenzhou, will shift frequently between employers in the search for better wages. In this context, the push for sectoral unionism comes from capital. The key empirical finding in Friedman’s research is that these wage agreements are not really implemented on the ground. In fact, most employers he interviewed had never heard of them. Hence Friedman’s conclusion: that the institutional weaknesses of sectoral unionism create equally intractable barriers to genuine collective bargaining as workplace-level unions. This is a powerful conclusion despite longstanding attempts to import Western collective bargaining methods from the outside (see this interesting article on China Labour Bulletin’s Han Dongfang for a taste of this strategy).

Such institutional weaknesses continue to create space for alternative forms of leadership and organisation. Arguably the most important example of this was the Yue Yuen shoe factory strike in Dongguan in April. Dongguan is a large city in Guangdong province. Yue Yuen is a Chinese contract manufacturer that employed 400,000 people in 2012 and made 300 million pairs of shoes in 2013. That’s about a fifth of all the casual and sportswear shoes in the world! In Dongguan, Yue Yuen employs about 60,000 workers in six factories, mainly producing for Adidas and Nike. Most of the workers are women. This strike, which mobilised about 50,000 workers, seems to have been mainly led by middle-level managers who discovered that Yue Yuen was under-funding employees’ pensions. Rather than using the workers’ monthly wage to calculate pension contributions, Yue Yuen had been using the local monthly minimum wage. (Thanks to Kevin Lin for pointing out the leading role of managers to me). Although they underplay the role of managers as strike leaders, activist site Gongchao posted a fascinating analysis of the strike in July. While the strike fizzled out under severe state repression, Gongchao claims that it was ‘the biggest strike of migrant workers in China since the beginning of the boom in the 1990s’. A further factor in the strike’s defeat may be the ability of branded manufacturers like Adidas to source products from alternative sites, as reports by scholars at the ‘Chinese Labour in the Global Economy’ workshop at Nottingham University, 11-12 September.

This raises further implications in the context of above claims that China’s workers are shifting towards more offensive demands. One could argue that the Yue Yuen workers’ demands reflect generational change in China more broadly than a shift towards a more ‘offensive’ class mentality. Whereas the earlier generation of migrant workers in China in the 1990s often desired to return to their home towns or villages, where they would rely on their families for care in retirement, the new generation often regard themselves as permanent arrivals and demand similar rights as ‘local’ workers. A strike over contributions to a social insurance fund, like the Yue Yuen case, makes sense in this context. These workers want the right to settle down and retire without being ripped off by unscrupulous corporations.

The strike also raises implications for the role of ‘leaders’ and education in industrial disputes, particularly in such a repressive labour regime as China’s. One implication of this could be that the managers who led the strike were easier to ‘buy-off’ with higher wage offers. While this may have contributed to the campaign’s defeat, it also makes it more difficult for capital and the state to ‘keep a lid’ on struggles by channelling disputes through formal collective bargaining. Thus, there remains no genuinely representative layer of officials or negotiators (i.e. a trade union bureaucracy) who act as ongoing intermediaries between capital and labour, as has long existed in western countries. This is one reason why debate continues among Western unionists and labour researchers about whether or not to engage collaboratively with the ACFTU. This was debated at the Nottingham University workshop recently (see link above). The critical research of scholars like Eli Friedman and others raise serious doubts about efforts of western unions to engage with a state-controlled union with an extremely limited capacity to adapt and represent workers’ interests.

 

References:

Buckley, P.J. (2014) in Davin, D. and Harriss-White, B. (eds) China-India: Pathways of Economic and Social Development, The British Academy, Oxford University Press

Chan, A. and K. Siu (2012) ‘Chinese migrant workers: factors constraining the emergence of class consciousness’ in B. Carrillo and D.S.G. Goodman (eds) China’s Peasants and Workers: Changing Class Identities, Cheltenham, Edward Elgar: 79-101

Elfstrom, M. and Kuruvilla, S. (2014) The changing nature of labour unrest in China ILR Review, 67(2): 453-80

Friedman, ED (2014) Economic development and sectoral unions in China, ILR Review, 67(2): 481-503

Gallagher, M.E. and Dong, B. (2011) ‘Legislating Harmony: Labour Law Reform in Contemporary China,’ in Kuruvilla, S., Lee, C.K. and Gallagher, M.E. (eds) From Iron Rice Bowl to Informalisation: Markets, Workers and the State in a Changing China, Ithaca, ILR Press: 36-60

Riskin, C. (2014) in Davin, D. and Harriss-White, B. (eds) China-India: Pathways of Economic and Social Development, The British Academy, Oxford University Press

Silver, B. (2003) Forces of Labor: Workers Movements and Globalisation since 1870, Cambridge, Cambridge University Press

Zhang, L. (2011) The paradox of labour force dualism and state-labour-capital relations in the Chinese automobile industry. In S. Kuruvilla, C.K. Lee and M.E. Gallagher (eds.), From Iron Rice Bowl to Informalisation:Markets,Workers and the State in a Changing China, Ithaca, ILR Press: 107-137.

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