Chinese Labor Reform
|China in the Spotlight
By Carl Finamore
THE RECENTLY-CONCLUDED summer Olympics introduced China as a major player on the world stage in spectacular fashion.
No doubt about it, the country made a superbly dramatic entrance.
Of course there were the much-publicized disclosures that some elements of the production were staged - the embarrassing lip-synching episode and the use of pre-recorded fireworks fed to live television broadcasts.
But first-class, stellar performances by Chinese athletes on the field amply demonstrated there was nothing fake about the progress China has made in the last several decades.
A more valid criticism was that the Chinese government’s track record on human rights won’t win any medals. And to be sure, it must be recognized that some of those complaints were made by those with less than genuine motives.
This was the topic of a recent discussion between twenty northern California labor leaders and a visiting high-level Chinese delegation from the Guangzhou Federation of Trade Unions (GZFTU).
The delegation, which is affiliated with the state-controlled All China Federation of Trade Unions (ACFTU), surprised us a bit when they said this was the first visit of top Chinese labor officials with leaders of a AFL-CIO Central Labor Council.
Facing new challenges to organize multi-nationals, our guests emphasized they wanted to rapidly end their isolation from American unions.
GZFTU's Chairman Chen Weiguang began by acknowledging that China‘s unions had to be reformed. “We need to protect the rights and interests of the workers and elect leaders who will stand up for workers,” said Weiguang. “Of course, the bosses within the enterprises want a union chair who will be obedient to the company but we believe the union belongs to the workers, not the bosses.”
Chen speaks from his experience as a major planner of the successful unionization of Wal-Mart in China.
China's “Economic Miracle”
Currently the seventh largest world economy, the country of 1.3 billion is on track to become the third largest by 2015. Its Gross Domestic Product (GDP) has grown at rates that are among the highest for any major country in the 20th century. (US Dept. of Agric., USDA 2004 report)
There are many internal factors contributing to China's economic "miracle" such as a more-skilled workforce and unprecedented capital spending on roads, utilities, buildings, machinery and equipment.
Over time, infrastructure improvements result in big increases in labor productivity and mass production of quality products, something U.S. policy makers do not appreciate. Substantial foreign investment in new technology since the early 1990s has also helped spur productivity.
Before the mid-1990s there were clear differences between state-owned "socialist" factories, which offered lifetime employment, housing, and medical care, and private sector factories, which provided little job security, low wages, and no fringe benefits.
Today, however, competition and persistent government efforts to privatize state-owned firms has led even these enterprises to offer less job security, fewer welfare benefits, and stricter labor conditions. (China Labour Rights Bulletin)
As a result, wages of Chinese workers have remained very low. Experts estimate wages at around 12% of US workers, thus providing China an extremely favorable trade advantage.
For example, the USDA reports that “furniture manufactured in China can enter the U.S. market at 25 to 35 percent of the cost of comparable furniture” made in the United States.
This imbalance is representative of most Chinese exports.
From these statistics, it should be clear that raising the wages and living conditions of Chinese workers is imperative. Solidarity is not just an abstract emotional impulse; it is an economic necessity that unites workers around the world.
Our goal should be to avoid divisive competition between ourselves by establishing uniform international labor standards.
A Conversation with Chinese Labor
Our meeting with the Chinese delegation proved to be a lively and frank exchange. I asked a question about the control of the Communist Party over the official trade unions.
As reported by Paul Burton in the May 28, 2008, Labor, the San Mateo County Central Labor Council newspaper, Chen responded to the question by explaining the history of unions under the Communist Party.
“For a long time China was a 'command economy' and unions were subservient to it. There was no distinction between labor and capital because we were all part of the nation,” Chen said. “The Party worked hard for the development of the working class and to educate workers. Things have changed with the move to a market economy and differentiation in factories between bosses and workers.”
Chen said that over the past 30 years of economic reforms, workers have made great sacrifices and now that capital had become too powerful the Communist Party was rethinking the balance of capital and labor, enacting new labor laws as part of that change.
Apparently some progress is being made.
Burton summarized the meeting by observing that “with the enactment of recent pro-worker labor laws in China, the situation may be changing as workers exercise their rights under these new labor laws.
“The China Labor Bulletin (CLB, online at www.china-labour.org.hk/en/ ) reported that 'the number of labor dispute cases in Guangzhou for the first two months of 2008 equaled the total number of cases in 2001. More than 60 percent of all cases involved non-payment of salaries and over-time.'"
CLB director Han Dongfang wrote encouragingly that “by developing collective bargaining at the grassroots level, enterprise-level unions will be transformed into labor organizations that genuinely represent the rights and interests of workers.”
Let's wish them well. We all should work toward this common goal in each of our unions. But some would say it is not possible to achieve while the Chinese government retains exclusive control of the unions.
The role of Trade Unions in China
Founded in 1925, ACFTU has around 170 million members. It is the only union legally recognized but its membership is shrinking as privately-owned companies become a larger share of the economy.
The numbers are staggering. In their Feb. 9, 2008, issue, ChinaDaily reports that 200 million were employed by 5.39 million registered private establishments in 2007. This is more than half of all companies in China. These firms alone generated 60 percent of the GDP.
ACFTU is responding to this challenge by mounting a huge organizing campaign in the private sector, especially among the foreign-owned. As a result, the Federation expects it membership to increase to 200 million by its September 2008 Congress. It also hopes to announce successful completion of a “100-day” bold unionization effort begun in June to organize 80% of the Fortune 500 firms.
This new thinking was forced upon Chinese unions after they encountered stiff opposition from notoriously anti union Wal-Mart. Labor officials, normally accustomed to dealing with state enterprises, were shocked when the company actually refused to even meet with union organizers, a tactic commonly employed in America.
ACFTU began a successful grass-roots organizing campaign, a first for the state labor body.
The union was finally recognized in 2006. Chen Weiguang played an important role confronting Wal-Mart as a hostile employer rather than as a friendly joint-venture partner with the government. The latter view has always compromised the union’s ability to represent workers.
For example, the ACFTU official website still clearly reveals its cooperation with management: "Trade unions of the foreign-invested enterprises in China have firmly centered on production and business operation to conduct activities and have given support to enterprises in their operation and management according to law; have educated workers to observe factory rules and regulations and discipline; organized workers to launch labor emulation campaigns; and aroused the enthusiasm of the workers for running the enterprises well, so as to contribute to the sound development of the enterprises."
Yet, soon after the Wal-Mart victory, the ACFTU website announced: “This successful experience in setting up Wal-Mart unions is groundbreaking in that we have discovered a new line of thinking. It not only will influence other foreign and private investors to quickly abide by the law to allow unions to be established, it also brings to trade unionists a new mission. Following the new logic in setting up unions, new adjustments in union work will be needed, be it in methods, in organizational structure, ways of identifying backbone activists, down to how to use union funds….”
We are obviously observing the wavering contradictions of a mass labor organization of millions trying to define for itself a new role and trying to discover for itself a new voice that speaks more sharply to the needs of Chinese workers.
The big question is whether the announced changes in union structure and purpose enacted from “above” will be sufficient to satisfy millions of Chinese workers “below” who so desperately need an organization representing their class interests.
So far, the government is walking a delicate tight rope of enacting reform without relinquishing control.
Fresh off the success of their grand Olympic production, the state retains the stage with the home crowd anxiously awaits their next major performance of reforming the trade unions.
Hundreds of millions of desperate workers still suffering under conditions most observers describe as horribly primitive have so far been relatively quiet.
Chinese officials hope they remain in their seats.
But a “thumbs down” review might end up with a rebellious audience itself taking over the stage.
Carl Finamore was President (ret), Air Transport Employees, Local Lodge 1781, IAMAW. He can be reached at email@example.com
[View the list]