Strikes and protests in China: Trouble on the horizon?

Chinese Taxi Strike

This blog a few days ago pointed out that there were 180,000 protests of sorts in China in 2010. Strikes and violent confrontations over land and against corruption in government are common. We have various articles on the blog under the "China" label to the right commenting on the strikes that have taken place over the years boosting wages and on the suicides at factories like Foxconn that have embarrassed some of the western trendy type corporations that profit from cheap Chinese Labor.

There were more protests this week as we pointed out a few days ago and there have been further strikes.  In November, 7000 workers at a New Balance factory clashed with police after protesting against cuts in their bonuses and plans by the Taiwanese owned company to relocate to another province.

Less than a week after the New Balance action, 1000 workers at a factory that supplies parts to Hewlett-Packard stopped production to protest changes in overtime rules and women workers at a factory in Shanghai that has contracts with Motorola and others struck over relocation plans. In the aftermath of earlier Labor struggles like those at Honda which have won major pay raises, some manufacturers have even talked of moving to Vietnam where Labor power is cheaper.

"We are seeing an upsurge in worker activism that exceeds anything since the summer of 2010." says the head of one advocacy group based in Hong Kong.

It is not just rural land issues and factory workers that are confronting the bosses and the authorities more openly. The rising Chinese middle class homeowner is finding that market forces can be quiet cruel indeed.  Urban residential home values rose some 155% over the last decade with prices in Shanghai increasing fourfold.  With the prospect of a US type housing bubble developing, the Chinese bureaucracy has intervened to slow home purchases and push banks to cut back on loans.  In an effort to boost sales, developers have slashed prices causing home prices to decline in November for the third month in a row. 

The problem is that with the boom, Chinese houshold debt has doubled since 2008 as people borrowed for the privilege of home ownership and now their homes are worth less than their loans.  Real estate has also been the sector of the economy where the Chinese parked their savings and wealth for the lack of better alternatives.

So the falling prices and heavy indebtedness of millions of home purchasers is fueling protests and resistance among this section of the workforce.  Business week gives an example of one worker, an electrical systems salesman named Deng who used both his and his father's life life savings as well as a loan from his boss to buy a Shanghai apartment so he could marry.  Two months after qualifying for the $175,000 mortgage, the developer cut prices in order to increase sales cutting the value of Deng's home by 20%.  Deng and hundreds of other home buyers ended up at the developer's sales office "facing off against a ring of security guards wearing camouflage and carrying shields". Business Week reports.

"If I'd paid for it all myself, the price cut wouldn't bother me as much."says Deng, "But there's a lifetime of my parents blood and sweat in it." Welcome to the free market, Deng.

China's rising middle class is estimated at about 243 million people and as one China watcher put it, "They are voicing their opposition online and in the streets" on all sorts of issues from working conditions to housing and the environment. The Chinese bureaucracy is also concerned; the state media announced publicly that these developments are "a social phenomenon that cannot be ignored."

This month, Chinese manufacturing contracted for the first time since 2009 and with the possibility of further economic turmoil in Europe as well as the US the future for Chinese exports does not look so rosy. The need to increase domestic demand is clear and the bureaucracy is making efforts to get the state sanctioned Union in to more workplaces to help workers negotiate with the bosses, many of whom are foreign.  The move by the state Union is driven to an extent by the various advocacy groups that try to help Chinese workers improve their relations with the bosses.  Also, there have been numerous strikes, some successful ones, led by workers independent of the state Union.

The bureaucracy wants workers to be able to negotiate more effectively with the bosses to improve conditions and to stave off further unrest and is having the state Union train workers to negotiate better contracts, but the bureaucracy also "fears such attempts could empower workers too much" says Chang Kai, a professor of labor relations at The University of China in Beijing.  The bureaucracy is in a bit of a bind here but, as they say, we do not always find ourselves making decisions in circumstances of our own creation or that we have control over.

"The only sure strategy to stop strikes is to raise pay" says Business Week.  The problem is that as Chinese workers become more expensive, Vietnamese, Mexican or even workers in North America begin to look more attractive as many of the commodities made in China are for sale in the US.  As US workers wages decline and Chinese workers wages rise, with reductions in transportation costs US workers might make some job gains.  Jobs with third world wages of course.

One employer found a better solution, new technology.  A Hong Kong knitting factory introduced the latest machines and was able to reduce its line workforce from 80 to 6. "All the headaches, the riots--gone" says the boss.  "Machines don't complain about their salaries."

The problem is that machines don't buy sweaters either. 

I am no expert on China by a long stretch but I think we have to recognize that the potential for major struggles opening up ahead between China's powerful working class, the private bosses and the Communist Party bureaucracy is great.  The bureaucracy is aware of the power of the Chinese workers.  The term Egypt was removed from online search engines in China during the uprising in that country that led to the fall of the US supported Mubarak regime.

The opening up of major class conflict in China will have a powerful affect on workers throughout Asia and the world. We live in an era not just of global capitalism but a truly global working class.  The failure of this global working class to develop a more unified organizations and unity in action is due to the role played by the leaders of the workers' organizations, Union and political parties.

This can delay the growth of a more powerful and unified global workers movement but it cannot prevent it.

Note: if you haven't seen it, the documentary "The Last Train Home" is well worth seeing.