Chinese Government Response to Strikes

August 9, 2010

Since a series of labor strikes in southern Chinese factories in May 2010, recent Chinese media reports have offered clues about the government's reaction. Media coverage of the wage increases that the strikes have spurred has been positive, but the Party appears to remain highly wary of any labor movement not under its direct control. The strikes also have highlighted the shortcomings of "collective consultation" in China, but government leaders remain intent on centralizing power in the state-run All-China Federation of Trade Unions (ACFTU) rather than devolving autonomy to grassroots labor organizations.

Official Chinese-language media coverage of a series of labor strikes in southern Chinese factories in May has been sparse in part because of tight government restrictions on reporting that authorities imposed on May 28, 2010, according to a June 12 article in the South China Morning Post. The New York Times reported on June 16 that the government is also working to censor Web sites and blog postings about the strikes. A report by the ACFTU on June 21 noted that the new desires of the younger generation of migrant workers had begun to have a "negative influence" on China's political and social stability. An editorial in the June 16 Ming Pao argued that Chinese leaders are worried that the domestic labor movement is vulnerable to manipulation by foreign unions.

Despite the government's uneasiness over the strikes,Xinhua reported on June 8 that "policymakers in Beijing have pinned hope on a steadily increasing pay for tens of thousands of migrant workers to help reorient China's economy from relying on exports towards being propelled by home consumption." Wary of appearing to encourage worker actions as a means to raise wages, the official media have focused on minimum wage increases that boost worker pay, referring to the "wave of rising wages" rather than mentioning any strikes. Examples include:

  1. Xie Zhiqiang, a professor at the Central Party School, wrote in its official Study Times newspaper on June 30 that China's minimum wage system "plays an extremely important role" in ensuring workers earn a liveable wage, and urged governments at all levels to raise and enforce minimum wage standards.
  2. Xinhua wrote on June 23 that "now in some areas of China a wave of pay raises has appeared. This appeal [for higher wages] is overdue, and it is a reasonable one that should be made in step with economic globalization."
  3. A spokesperson for the Ministry of Commerce said at a press conference on June 12 that recent rises in minimum wages in coastal cities "are in line with the changing trends in the overall national economic and industrial policies," and that more workers should "enjoy the fruits of economic growth."
  4. Yu Faming, a senior official at the Ministry of Human Resources and Social Security, said that although pay hikes will bring some challenges in the near term, they will be beneficial for employment in the long term.

Despite workers' success in securing pay raises, the strikes have highlighted problems in China's centralized labor dispute and mediation system. The English-language edition of the Global Times wrote on June 2 that the Honda strikes "[underline] the embarrassing lack of a worker's union that would serve as a collective wage bargaining channel." The Economic Observer reported on June 7 that of the 13 million companies in China, more than 10 million small and medium-sized enterprises have not established a collective wage bargaining system, and that "labor disputes still cannot be resolved smoothly because there is no effective and fair negotiating mechanisms; the ability of labor unions to protect the rights of labor is limited." A June 13 Wall Street Journal article characterized negotiations between workers and management at Honda Lock Manufacturing Co. in Zhongshan as "chaotic," citing interviews with Chinese workers and Japanese managers.

In resolving the strike at a Honda supplier in the city of Foshan, both sides relied on an ad hoc team of outside advisers rather than an established negotiating mechanism. According to a June 17 Asia Weekly report, mediation by a National People's Congress representative, Zeng Qinghong, was needed to break a deadlock in negotiations, while workers were represented by Renmin University Labor Institute Director Chang Kai rather than the official union. The same report also notes that Zeng is vice chairman of the board of the Guangzhou Automobile Industry Group Co., which has joint ventures with Honda that had been affected by the strike. In a later interview with Caijing magazine, Chang said that the turning point in the negotiations was reached "in large part due to Zeng Qinghong exercising his personal prestige, and not because of any systematic method for managing the dispute."

The New York Times reported on June 10 that workers at the Zhongshan plant were demanding a more autonomous union, but recent comments from official media indicate the government intends to maintain its central position in labor relations. While official media have discussed the need for improvement in China's collective negotiation system [see above], political leaders have stressed that improvements will come by strengthening current government-led policies, rather than reforming them. For example:

  1. A top official at the state-run ACFTU, while not referring directly to the strikes, reasserted the Party-led unions' position as the representative and protector of workers' legal rights, and their role in maintaining social stability.
  2. The ACFTU also put out an emergency notice on June 4 calling for increased efforts to establish Party-led unions in foreign and privately run enterprises, which employ 70-80 percent of Chinese industry workers according to Tang Jun, a researcher at the Chinese Academy of Social Sciences.
  3. Ding Gang, a senior editor at the People's Daily, cited an International Labor Organization study in the Global Times to argue that "a highly centralized wage system is equally helpful in enhancing competitiveness" when compared with a loose wage system.
  4. On June 11, a Worker's Daily editorial stated that pay raises in Zhejiang, Shanghai, Liaoning, and Jiangsu could all be attributed to the government-organized collective consultation system.