Labour Unrest in China: Chinks in the System?

Notwithstanding the iron curtain that China has made over its media outlets, increasing labour unrest in China is coming out as the economy is trying hard to recover from the unprecedented Covid pandemic shock that bruised the Chinese economy badly. However, labour unrest is not new to China. The country has been exposed to labour unrest several times in its recent history, the most recent being one during the global recession caused by the sub-prime crisis of the US in 2008 and the sovereign debt crisis of 2010 in Europe. The similar kind of labour unrest is again observed in China, which China, as usual never allows the world to know by policing its media channels.

The China Labour Bulletin (CLB), a Hong Kong-based, non-governmental organisation, that tracks strikes in China, reported on May 16 that in 2023, there have already been at least 130 factory strikes in China, more than double the number in the whole of 2022. The trend of rise in strikes is steep and it continued to increase in 2023 on month-to-month basis rising from 10 in January to 26 in February and 34 in March. From sectoral break up the concentration of strikes was highest in export-oriented electronics industry, followed by garments and apparel, toys and automotive sector. The global slowdown and decoupling of the advanced economies with China may be the most prominent reasons for the strikes, but China’s labour policies and working conditions have long been the points of dissatisfaction among the working class, which led to strikes even in the past. There is nothing new in these trends of strikes. The CLB Strike Map data in 2022 showed that the total number of incidents of strike was 814, about the same volume as during the first year of the pandemic in 2020, and about 25 percent fewer than the 1,095 incidents recorded in 2021. In 2022, over 87 percent of the incidents were over unpaid wages. In 2022, workers faced pandemic restrictions, regional lockdowns, while the Chinese economy was struggling with downward pressures.

In 2022, the industry distribution of the incidents was in line with the proportions and trends seen over the past few years. In 2022, the construction industry led with the most collective actions by workers (48 percent), followed by transportation (22 percent), services (21 percent), manufacturing (4 percent), education (4 percent) and mining (0.5 percent). Over the past five years of Strike Map data of the CLB, a few trends are worth noting. The proportion of incidents in the construction industry has remained steadily above 40 percent, other than a slight drop in 2021. The country’s debt crisis, expansion of the real estate industry, and property market free fall have increased the incidence of protests for unpaid wages, especially in light of corporate bankruptcy. Incidents in the transport industry have risen as the services and logistics industries have thrived, accompanied by rising dissatisfaction about working conditions. China’s manufacturing industry has been transitioning to high-tech production, and the decline in incidents has been correspondingly swift and steady. But in 2023, as the growth in manufacturing sector has failed to achieve the targeted rate of growth, the CLB shows strikes and protests in China’s manufacturing sector have surged since early 2023 as many factories in China are facing economic difficulties.

The increasing strikes in electronics sector in 2023 are mainly because global economic conditions are negatively affecting China’s export economy. As a result, factories and suppliers are changing their practices to sustain their businesses. In consumer electronics industry, mid-stream factories producing circuit boards are lowering their prices to secure orders, causing the price of many products to drop by 10-15%. Major downstream electronics manufacturers, such as Wistron and Pegatron, are also facing a drop in orders. Wistron has decided to close its factory in Tianzin, while part of Pegatron factories in Kunshan are closing down.
Similarly the garment and apparel factories also faced the heat of global slowdown. Dongguam Gogo Garment Manufacturing Ltd., the largest underwear factory in the region announced closure and requested the workers to leave the factory premises within a week. Despite 30 years of image as a stable employer, the factory has curtailed its workforce to 1700 at the time of closure from a peak of 10000 workers. The big problem in China is that the labour laws are not implemented in full by both the foreign as well as domestic producers. They comply it but only in breach rather than full compliance. The bigger problem is that the working class in China is so subdued by the government machinery that they do not prefer to protest against their rights, violation and try to find solutions within state’s framework. The CLB study has pointed out that workers are less likely to resort to collective actions like strikes and protests and may individually seek help from official channels, including taking their pleas online for attention toward resolution. Some additional factors are that when workers face labour rights challenges, their priority is to immediately find new sources of income rather than pursue their rightful claims that take time and effort – and that may incur high risks for actions such as publicly protesting.

Strikes have been taking place in China since the last three decades. During the Asian financial crisis in late 1990’s, a widespread worker unrest started after the Chinese government rolled back cradle-to-grave welfare and slashed payrolls in struggling state-owned enterprises across the northern rust belt. But the security forces were quick to arrest kingpins and suppress the protests, while the media was forbidden from covering them. Some observers had later remarked, “China, espousing the tenets of communism publicly notwithstanding, has until now treated the industrial workforce as submissive drones, who could put in long hours of work in wretched conditions for low wages.” Even in the new millennium, China continued to face labour unrest. In early November 2008, before the onset of these strikes in largely foreign industrial units, nearly 8,000 taxi drivers in Chongqing city in Chongqing Municipality suddenly went on strike. As the news spread, taxi drivers of Chaozhou, an export-reliant region, otherwise hard hit by the global economic slowdown went on strike. They blockaded Chaozhou city hall, demanding a crackdown on fare-grabbing gypsy cabs and high management fees. A research paper documented about this strike and said, “The numbers of different forms of mass protests, including strikes (ba gong) demonstrations (you xing), sit-ins (jing zuo), road block (zu lu) and petitions (shang fang) in China have since soared. It is estimated that in 2008, at least one strike involving over 1,000 workers took place every day in the Pearl River Delta alone. In its totality, given a number of catalysts, the number of participants in industrial disputes as such in China has grown from around 10,000 in 1993 to 317,000 in 2009, with the total number of participants increasing from 0.7 million to over 5.4 million. In 2008, the number of labor cases in courts was 280,000. The outlook for 2010 cannot be any different.”

Such labour unrest in China got international publicity with a wave of suicides among young workers of the Foxconn International Holdings Ltd. in China, a subsidiary of the Taiwanese electronic major Hon Hai Precision Industry Co. Ltd, engaged in the manufacture of computers, games consoles and phones for clients such as Apple, Motorola, Nokia, Hewlett-Packard, Dell and Sony Ericsson. As of August 28, 2010, altogether 16 workers jumped from high buildings at the factory in 2010, with 12 deaths that included the case of a 22 year old woman employee at Kunshan plant in Jiangsu. A further 20 workers were stopped before they could make their attempts. The Shenzhen production base, which employs 420,000 workers, has so far been the most suicide prone locations. Most of the workers, who ended their lives, were in prime of their youth in the age group of 17-24 years. Families of workers, who killed themselves, tend to attribute long hours of work and harsh management methods as agent provocateur behind the motive for the suicides. This is while the response of Chinese trade union organizations such as Shenzhen Municipal Federation of Trade Unions (SMFTU) and the All China Confederation of Trade Unions (ACFTU) has been little different than that of passive onlookers. Nonetheless, there have been discernible efforts on the part of the Chinese government to down play the incident beyond just instituting an enquiry. The same is the situation now. The situation is not that grave now, but if China fails to beat the global slowdown, the situation can worsen further. Already unemployment is rising in the country and factories have started cutting jobs as well as wages.


China, labour system, unrest