A Right to Strike Pilot Project in Guangdong
We’ve been talking a great deal about labor issues this summer. With the strikes down south at companies like Honda and the questions about labor conditions at the Foxconn facility following multiple suicides, there is a lot to talk about.
Until now, however, the labor unrest and demonstrations have been limited to a few large employers, many of which are foreign-invested enterprises. The conventional wisdom has been that Beijing is willing to let this source of instability continue, seeing as how it has resulted in higher wages, but will “pull the plug” if large-scale demonstrations take place or if they spread to large domestic firms.
For what it’s worth, I generally agree with the conventional wisdom and believe that the last thing Beijing wants is millions of workers out there demanding better working conditions and higher pay at Chinese enterprises; this could lead to all kinds of problems, including violent clashes between management and labor. I am therefore a bit puzzled at this Businessweek article out of Guangdong:
[T]he proposed Regulations on the Democratic Management of Enterprises, now being debated by the Guangdong Provincial People’s Congress, could give Chinese labor the ultimate—and until now taboo—bargaining tool: an officially sanctioned right to strike.
[ . . . ]
The draft law could take effect by this fall in Guangdong, the industrialized coastal province where Honda (HMC) workers in June illegally and successfully struck for higher wages. The proposed law is seen by many activists and researchers as a trial balloon before a possible national rollout. The rules: If one-fifth or more of a company’s staff demands collective bargaining, then management must discuss workers’ grievances. Before talks begin, the union must elect local worker representatives.
[ . . . ]
Under the Guangdong proposal, as long as workers first try negotiating and refrain from violence, they’re allowed to strike.
This sounds great on paper. Give the workers the ability to strike, set out a procedure for them to follow, and prohibit violence. From Beijing’s perspective as well, there is a long tradition of using the provinces as test tubes to try out new legislation.
But the higher-ups in Guangzhou and Beijing were not born yesterday. They know that you can’t simply legislate against violence. Strikes will get ugly immediately, and then the question will be whether the local authorities will enable crackdowns by employers (that’s what usually happens) or somehow magically transform into neutral peacemakers.
So what’s the deal here? Is this a serious attempt at pro-labor legislation or a cosmetic change to the law that will never be fully implemented? I should note here that the legislation is only at the draft stage, so no one knows whether it will be passed, and even if it is, what the final terms may be. One possibility (this is just one option) is that ultimate discretion for green lighting a strike will be placed in the hands of a local official (a person that could be influenced by local politics) — if that happens, the whole thing will be meaningless.
I will be surprised if this goes forward in its current form, but if it does, Guangdong will be a place to keep an eye on.
I do disagree with your conventional wisdom that “the last thing Beijing wants is millions of workers out there demanding better working conditions and higher pay at Chinese enterprises”. When China’s economy has to shift from export to consumption – and some say it has already done so – you need to allow wages to go up.
You saw that in terms of labor laws and regulations changes have been prepared and last year the organization of collective bargaining was only halted by a temporary panic about the effects of the global financial crisis on the export industry.
Now, it looks since the end of 2009 that the economy is doing well, at least good enough to resume on the track of improving labor relations on the side of the workers. Of course, like everything, the central government does not want to happen those things too fast, but it looks like the box of Pandora has opened since the recent strikes and it might be hard to close it again.
One point to clarify. I didn’t mean that the government does not want wages to go up or labor conditions to improve. What I hear a lot, though, is that Beijing does not want this to happen via widespread labor unrest, which would most likely include violent clashes. The question then is how to get those policy goals – one option is to allow strikes.
Thanks for the clarification, Stan,
The efforts of getting tools like collective bargaining in place would explain that. On the other hand, strikes are now more tolerated than ever. I found the translations made by the China Labor News Translations about the Honda Nanhai strike very revealing, as those translated Chinese media are following the leading of the government.
I suppose collective bargaining, with perhaps genuine representation, will be where this is all going. The question is what happens when negotiations break down. Will there be real strikes against large Chinese companies? Will the government crack down on local thugs? We shall see.