Strikes and protests multiply in China, testing authority

GUANGZHOU, China: In the Chinese region nicknamed “the world’s factory,” many workers are angry and disillusioned.

Strikes and other labour protests have spiked across the country as manufacturing plants lay off workers and reduce wages in the face of mounting economic headwinds. But the unrest is particularly intense in the southern province of Guangdong, the vast urban sprawl bordering Hong Kong that is the heart of China’s export industry - and its economic success story.

The upsurge in industrial action represents a challenge for a Communist Party that bases much of its legitimacy on its ability to manage the economy. Experts say it is not about to threaten the party’s vice-like grip on power, but it will ring alarm bells for local officials whose careers often depend on their ability to stamp out stirrings of social unrest.

In December, Guangdong police arrested a handful of labour activists who have tried to defend workers’ rights and negotiate peaceful settlements to some of the disputes.

In the latest confrontation, hundreds of workers faced off against police in riot gear this week at a stainless steel

We didn’t complain because we understood the company was in trouble. But now, after the Spring Festival, we found out our base salary had been halved, to 2,200 yuan (RM1407) a month. Colleagues had been placed on leave and given less than the minimum wage. You just can’t live in Guangzhou on the money they are paying. If you were to get a bowl and beg under the overpass, you would earn more.

Chen, employee

factory in the provincial capital, Guangzhou, protesting wage cuts, layoffs and efforts to force many to resign without proper compensation.

“To me, the company was like a big family, but now it’s treating its employees so badly we have no sense of belonging,” said 32year- old Chen, who has worked there for nearly seven years. “It is so cold-blooded.”

Chen asked to be referred to only by his family name for fear of retaliation. Other strike organisers and workers who have spoken out have been fired, or harassed by police.

Problems began when the factory’s Taiwanese owners sold the business to a Chinese state- owned company last year, workers said. Shortly afterward, Chen said, he was told he was being demoted from a lowerlevel leadership job and would see his salary cut, along with many others.

“We didn’t complain because we understood the company was in trouble,” he said. “But now, after the Spring Festival, we found out our base salary had been halved, to 2,200 yuan ( RM1407) a month.”

Colleagues had been placed on leave and given less than the minimum wage, he said.

“You just can’t live in Guangzhou on the money they are paying,” he said. “If you were to get a bowl and beg under the overpass, you would earn more.”

China Labour Bulletin (CLB), a Hong Kong-based group that supports workers’ rights, says it recorded 2,774 strikes or protests in China last year, twice as many as in 2014. It says the rise may be partly accounted for by better tracking of strikes on social media but called the upsurge obvious and massive.

The jump began after last August’s currency devaluation and stock market crash and continued to build during the last quarter of last year, mainly in the manufacturing and construction sectors and most markedly in Guangdong.

“There is a growing sense of insecurity among workers, particularly in Guangdong,” said Jonathan Isaacs, a labour specialist and partner at Baker and McKenzie, a law firm in Hong Kong. “A lot of factories have shut down, relocated to cheaper areas or implemented mass lay- offs.”

Many of the underlying problems predate the last quarter, according to Albert Park, director of the Institute for Emerging Market Studies at the Hong Kong University of Science and Technology.

A survey by HKUST and Beijing’s Tsinghua University of nearly 600 factories in Guangdong conducted last August found that, although the profits picture was mixed, companies had trimmed their workforce by 3.7 per cent in 2014. Labour-intensive sectors were the hardest hit, with employment in textiles falling more than 10 per cent.

The main problem firms cited was rising wages: Guangdong is, in a sense, a victim of its own success, and now many factory owners are eyeing cheaper locations in Southeast Asia.

But the global economic slowdown was also having an impact, with low market demand cited as the second-biggest problem, Park said.

Industrial unrest, though, has mainly been fueled by owners’ failure to offer workers proper compensation for layoffs, pay them wages they were due or keep social security payments up to date, experts said.

CLB said two-thirds of the disputes recorded last year related to the nonpayment of wages.

“The economic slowdown only partially explains the increase in labour disputes,” it wrote. “The fundamental cause has been the systematic failure of employers to respect the basic rights of employees.”

China has labor laws that are supposed to protect workers’ rights, but local governments regularly fail to enforce them, experts say. — WP-Bloomberg