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Labour Relations in Urban China

posted 6 Nov 2010, 07:28 by Admin uk   [ updated 6 Nov 2010, 07:32 ]

by Heiko Khoo 

China’s rise in the world economy was produced by changes in work and the working class. New workplaces and work practices diversified the composition of the working class. Nowadays there are two main categories of urban workers. The traditional working class predominantly employed in state owned units, and migrant workers generally employed by the private sector or in enterprises of hybrid ownership. 

I shall focus on the new migrant workers and look at how their protests and demands relate to those of the traditional working class. For the Communist Party of China the trade unions are central to the maintenance of legitimacy, therefore I shall assess how the Chinese trade unions act and react to workers demands and look at ways that workers express their demands and organise to attain them. 

 

The ACFTU 

 

The All China Federation of Trade Unions (ACFTU) was formed as a militant workers organisation in 1925. However, after liberation in 1949, the union generally acted as a transmission belt to assist the party and management to increase production and promote party ideology. The trade unions were almost abolished in the Cultural Revolution, yet it was in 1975 that the right to strike was included in the constitution. Even though the launch of the reform era after 1978 saw the ACFTU reactivated, the right to strike was eventually removed from the constitution in 1982 following the strikes in Poland led by Solidarity.

 

At the time of the Tiananmen Square protests in 1989, the ACFTU expressed support for the students, but new independent workers’ organisations, like the Beijing Autonomous Workers’ Federation, claimed the right to supplant the ACFTU as the voice of the workers. The Party leadership saw these organisations as a direct challenge to Communist rule. Thus after the suppression of the Tiananmen Square protests, plans for greater autonomy for the ACFTU were shelved. [1]

 

With the growth of the private sector and multinational investments, the ACFTU straddles the division of interests between capital, labour and the state. The trade unions have generally been viewed as subordinate to the party, state and business interests. Therefore scholars have overwhelmingly emphasised problems of trade union legitimacy (Jie Shen 2007, Anita Chan 2005). In general the role of the ACFTU was limited to those of a welfare and social organisation for the workers, providing social services and advising workers about legal rights. Nevertheless, the ACFTU has promoted changes from above, which significantly improve the legal rights of the working class, like the 2008 Labour Law. These new legal rights often act as a focal point around which workers’ activism is galvanised.

 

There are signs that reformers within the ACFTU are trying to engage the key issues of fostering democratic workers’ representation. At a structural level the union organised an extraordinary unionisation drive in recent years. Membership rose from 123 million in 2003 [2] to 226 million in 2010.[3] Importantly, more than half of the 14 million new members in 2009 were migrant workers. [4]

 

Analysis of workplace unions indicates that although the trade unions are generally controlled from above and are intimately connected to party organisations, there is nevertheless a notable degree of flexibility. Research into the outlook and practices of trade union chairpersons indicates that there are a significant minority of workplaces where the workers utilise workers’ congresses and official union structures as avenues to express grievances, and where competitive democratic elections take place. These tend to be in state or collective enterprises rather than private or foreign funded enterprises (Hishida et al 2010). These studies reveal that increasing differentiation and complexity in the work environment have brought about variations in forms of workplace representation by the unions.

 

The composition of the urban workforce

 

The division between the traditional and migrant urban workforce, is revealed in figures from the National Bureau of Statistics. In 2008 there were 64 million urban workers employed in state owned units, and 29 million employed in Share Holding and Limited Liability Corporations. These workers are overwhelmingly traditional urban workers.

 

Migrant workers predominate in private sector urban employment. This sector increased its size from 10 million workers in 1999 to 51 million in 2008. When one includes the 16 million workers employed by foreign, Hong Kong, Macao and Taiwanese capitalists in urban areas, the private sector figure for urban employment is over 67 million.[5] These workers are overwhelmingly drawn from the migrant workforce.

 

The rise of market relations generated new and wealthy social classes, officially defined as the ‘new social strata’. At the upper end of the wealth scale, capitalists cultivate intimate connections with party and state power. This is seen by some as being instrumental in establishing a dominant position for private capital (Dickson 2008, Minxin Pei 2006).

 

However, defining Chinese corporate ownership forms is an area of considerable controversy. Recent research indicates that the extent and influence of privately owned companies has been considerably overestimated (Yasheng Huang 2008, Dic Lo 2010). When Chinese workers confront the management of foreign owned enterprises or those owned by Hong Kong, Macao and Taiwanese capital, the Party and state can gain popularity by defending workers’ rights.

New Labour and the hukou

 

The planned economy developed in China in the 1950s was based upon state-owned heavy industry. Workplaces were semi-enclosed entities, which acted as a welfare state as well as a productive entity. China’s household registration system, the hukou, was introduced in 1951 and tied people to their place of birth. Without a hukou, one could not get access to food rations, work, healthcare, education or housing. The hukou system severely restricted the movement of labour, particularly migration to the cities from the countryside. This facilitated the centralised bureaucratic planning of national economic life. 

With the strengthening of the private sector and the relaxation of central planning, control over migration based on the hukou diminished, as access to goods and services became a financial matter. Today, employment in urban workplaces grants access to basic level social services. However, migrant workers rarely enjoy full access to these services. If migrants are registered in their home town, they continue to suffer discrimination at multiple levels, in wages, healthcare provision, pensions and insurance, which are all designed to serve those with an urban hukou.[6]

 

Urban Migrants

 

Of an estimated 150 million migrant workers in the cities over 61% are aged between 16 and 30 years. Most want to make the city their permanent home. This desire contrasts sharply with ten years ago when over 89% intended to return to the countryside. In the last decade a sea change in attitudes occurred in the outlook and aspirations of the young generation of migrant workers. This is reflected in their assertiveness; only 6.5% fear making complaints when their rights are infringed, and 45.5% of new migrants are prepared to lodge collective complaints.[7]

 

Migrant workers employed in manufacturing are mostly housed in mass dormitories. These factories are organised as semi-enclosed environments. On the one side these circumstances facilitate surplus value extraction, as the labour force can be called to work on demand; and on the other side, it generates a concentration of workers with common interest and experience, whose potential for organisation and resistance is considerable.

 

Working alongside official organisations like the Youth League and sympathetic local officials, an NGO called the Chinese Working Women’s Network operates in Shenzhen’s Special Economic Zone. It runs an extensive propaganda, agitation and organisational network, which successfully penetrates factory dormitories and organises workers to defend their rights as defined by the law. For example, in two factories owned by transnational companies, workers’ committees were elected ‘from below’ by secret ballot, in order to monitor the application of codes of conduct and laws as they affect the rights of the workers.[8]

 

It was private companies owned by Taiwanese and Japanese capital that were the focal point for the spring and summer of worker discontent in 2010. Foxconn employs 920,000 workers in China, 470,000 of them in two factories in Shenzhen. [9] The company is owned by the Taiwanese giant Hon Hai Precision Industry Co. Following the suicide of 12 workers at the Shenzhen plants, management boosted basic wages from $135 a month to $293 a month [10] and engaged in colourful campaigns to discourage workers from jumping to their death.

 

Old Labour and Resistance

 

Resistance to privatisation and restructuring of state owned enterprises came to a head in the late 1990s. As a concession to the workforce in the process of reforming state enterprises, there was increasing lip service paid to the democratic management rights of the workers as defined in the constitution. Under articles 16 and 17, state-owned and collective enterprises “practise democratic management through congresses of workers and staff and in other ways in accordance with the law.”[11] The process of restructuring in state-owned enterprises often gave rise to conflicts. The organisational focus for successful forms of resistance was the ‘Staff and Workers’ Representative Council’, which are legally entitled to veto and control management (Stephen Phillion 2009, Anita Chan 2005).

On July 24th 2009 workers at Tonghua Iron and Steel went on strike against a takeover bid by the privately owned Jianlong Steel Holding Company. During the protests, workers beat an executive of the company to death. As a consequence the Jilin State-owned Assets Supervision and Administration Commission (SASAC) cancelled privatisation. Zhang Wangcheng, a professor of the China Labour Studies Centre at Beijing Normal University, blamed the trade union for the failure to pre-empt the unrest and reduce tensions.[12] A month later the ACFTU published a statement that privatisations are illegal unless agreed by the workers’ congress.[13]

 

The Character of Recent Strikes and Unrest

 

The Chinese scholar, Yu Jianrong, has identified several characteristics of mounting worker discontent. These include, the sudden and spontaneous nature of disputes, the disbelief in official responses, the distrust of local authorities, and the faith in national government.[14]

Inequality and a perception of injustice against blatant forms of discrimination, rooted in the Hukou system, are also a major cause of anger amongst migrant workers. The migrant workers with a secondary school education are considered to be a serious threat to social stability, as they often feel they suffer from systematic discrimination. They may be able to ignite and sustain flames of revolt, which would go to the heart of the contradiction between the official rhetoric of building socialism and the practical experience of corruption, exploitation and the misuse of power.[15]

 

One of the key characteristics of unrest by workers, peasants and the poor, in present day China, is the legalistic form that it adopts. Protests concentrate on rights specified in the law. The availability of modern means of duplication and access to information has enabled militancy to be energetically channelled into exposing the discrepancy, between the arbitrary nature of the exercise of power on a local level, and the contrastingly positive legal rights of the poor. Simply by copying laws and directives and using them as a shield and weapon, the subaltern classes have discovered a powerful means of unifying their actions, morale and sense of just cause, and have been able to avoid the repressive measures traditionally associated with dissidence and rebellion.[16]

 

When a strike broke out on May 17th 2010 at Honda’s components factory in Foshan, it began as a dispute about low salaries, soon some 1800 workers joined in. They proactively demanded wage rises, new pay scales and career structures, and democratised their workplace union representation. This brought to a head the need for unions to be controlled by the workers themselves.[17] The ACFTU leadership nationally announced that democratic elections would replace the appointments of union officials from above, ‘step by step’, which seems to endorse the Honda workers’ ideas.[18]

 

An appeal by the strikers indicates the development of a national workers’ consciousness.

“Our struggle for rights is not a struggle to protect the mere interests of 1800 workers. We are concerned with the rights and interests of the workers in the whole country. We want to demonstrate a good example of the struggle for rights of workers.”[19]

 

In the immediate aftermath of the Honda strike a wave of similar disputes broke out in factories across China, but were most common in Guangdong province. In order to regulate and control these spontaneous outbursts, the Guangdong Province People’s Congress discussed a new law, the ‘Regulations on the Democratic Management of Enterprises’. The proposed regulations envisaged a significant extension of workers rights, for example, if 20% of workers in any enterprise demand an increase in wages, the workers would have the right to elect their own representatives to negotiate with management. In the event of their demands being ignored the workers would be able to strike, and the management would not be able to sack them.[20] The proposals also envisaged that workers would be guaranteed a one third representation on the board of directors and be able negotiate on a wide range of issues. Hong Kong manufacturers claim to have successfully lobbied Beijing to shelve these proposals, warning that giving workers a say in management will provoke “endless fights in the boardroom” because “employers want to pay less and employees want to get paid more”. [21]

 

Workers’ discontent in state-owned and formerly state-owned enterprises often adopts workers’ democracy as its channel for expression through the staff and workers’ representative congress.  The strikes in Honda and the subsequent legal debates indicate that migrant workers are adopting much the same methods and ideas as workers from state-owned enterprises. It seems certain that the issue of the right to strike, democratic control of the unions, and workers’ representation will be rekindled soon, as these questions appear to be hardwired into contemporary Chinese labour relations.


[1] Tomoaki Ishii Trade unions and corporatism in China pp1-24 in Chinese Trade Unions-How Autonomous Are They? Hishida et al 2010 Routledge Oxon

[2] Xinhua News Agency October 21, 2008

[3] Xinhua News Agency-August 30, 2010

[4] http://english.acftu.org/template/10002/page.jsp?cur_page=6&aid=536&cid=146&keyword=null

Chinese Trade Unions 2010-04-15 p4.

[5] http://www.stats.gov.cn/tjsj/ndsj/2009/html/E0402e.htm

Number of Employed Persons at Year-end in Urban and Rural Areas Accessed 20.36 GMT Oct 21, 2010

[6] Ran Tao, Hukou reform and social security for migrant workers in China p73-95 in Labour Migration and Social Development in Contemporary China Rachel Murphy 2009 Routledge , Abingdon Oxon.

[7] http://www.acftu.org/template/10004/file.jsp?cid=222&aid=83614 关于新生代民工问题的研究 20100621 本文访问次数 Report by the All-China Federation of Trade Union (ACFTU)

[8] Pun Ngai, The making of a global dormitory labour regime pp154-170 Labour Migration and Social Development in Contemporary China Rachel Murphy 2009 Routledge , Abingdon Oxon.

[9] http://uk.reuters.com/article/idUKLNE67I00B20100819 Accessed 20, Oct 2010 10.06am GMT. By James Pomfret Foxconn to up China workforce, cut Shenzhen

[10] http://www.ibtimes.com/articles/27191/20100607/foxconn-says-will-double-basic-wage-in-china-to-curb-suicides.htm By Surojit Chatterjee June 7, 2010 Accessed 2032 GMT Oct 21, 2010

[11] http://english.peopledaily.com.cn/constitution/constitution.html

[12] Finger-pointing in steel mill death 2009-07-29 01:14:59 GMT2009-07-29 09:14:59 (Beijing Time)  Global Times http://english.sina.com/china/2009/0728/259013.html Accessed 15.25 GMT

[13] Heed workers' voices (China Daily 08/19/2009 p8) http://www.chinadaily.com.cn/opinion/2009-08/19/content_8586011.htm

[14] Yu Jianrong on “Maintaining a Baseline of Social Stability” Speech to Beijing Lawyers Association on December 26, 2009 http://chinastudygroup.net/2010/04/yu-jianrong-on-maintaining-a-baseline-of-social-stability/ Accessed Oct 23rd 15.04 GMT

[15] http://www.chinadaily.com.cn/opinion/2010-08/06/content_11106865.htm Social equity for youth By Yu Jianrong (China Daily) Updated: 2010-08-06 Accessed 23 Oct 16.43 GMT

[16] Yu Jianrong Op. cit.“Maintaining a Baseline of Social Stability” 2009

[17] Anita Chan 2010-06-18 China Daily Labor unrest and role of unions http://www.chinadaily.com.cn/opinion/2010-06/18/content_9987347_2.htm Accessed 20th Oct 2010 12.40 GMT

[18] More union heads to face election By Chen Xin (China Daily) 2010-08-31 08:02 http://www.chinadaily.com.cn/china/2010-08/31/content_11228956.htm

[19] Open Letter to the Public and All the Workers in Honda Auto Parts Manufacturing Co. from the Delegation of Representatives of the Strike Workers for Negotiation. China Study Group 3 June 2010 http://chinastudygroup.net/2010/06/open-letter-to-the-public-and-all-the-workers-in-honda-auto-parts-manufacturing-co/

[20] CLB's analysis of Guangdong's Regulations on the Democratic Management of Enterprises http://www.clb.org.hk/en/node/100849 9 Aug 2010

[21] Denise Tsang South China Morning Post (Hong Kong)-September 21, 2010 SCMP Morning Edition p1 HK factory owners stifle labour reforms Factory owners stifle labour reforms

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