China grapples with a labor
dragon By Antoaneta Bezlova
BEIJING - As China is assailed by a surge
of protectionist sentiments in the United States
and the European Union - its largest trade
partners - it now also faces a multitude of
accusations from Western trade-union groups about
unfair competition and workers' exploitation.
China was not obliged to undertake any
labor reforms under the conditions of its
acceptance into the World Trade Organization (WTO)
at the end of 2001, leaving the issue of labor
rights to be handled by the International Labor
Organization (ILO).
Aware that it runs the
risk of seeing its exported goods
embargoed in the West, since
its WTO entry China has engaged in discussions on
embracing international labor standards and
allowed a number of international monitors to
operate inside the country. But progress has been
slow and the number of industrial disputes has
multiplied.
Four years after China joined
the global trade body, working conditions for the
majority of Chinese laborers are extremely poor
and exploitation is rampant, an international
union group revealed recently.
The
International Confederation of Free Trade Unions
(ICFTU) said about 700 million Chinese workers
were paid less than US$2 a day.
"China's
competitiveness is based on the exploitative wages
paid to its workers," the ICFTU said in a report.
"The people have 60-70-hour working weeks, live in
dormitories with eight to 16 people in each room,
earn less than the minimum wages, which go as low
as $44 [a month], and often their only prospect if
they should get injured at work is unemployment."
The union confederation released the
report on the eve of a WTO meeting in Geneva to
review China's trade policies. The document
criticizes the WTO for overlooking the
fundamentals on which China's economic miracle is
based. It demands that the world trading club link
the creation of decent working conditions to its
agenda for trade liberalization to ensure social
fairness.
"China's experience shows that
trade liberalization alone and success in export
markets [do not] ensure social progress and
development," it said.
Two decades of
cautious market opening have created "one of the
most unequal countries in the world", the ICFTU
said. "The country has as many newly unemployed
people as the rest of the world put together.
Three-quarters of rural households are
experiencing decreases in their living standards."
A key problem is that the Chinese
Communist Party (CCP) continues to ban independent
trade unions, and Chinese workers have no right to
represent themselves, to bargain together or to
strike. Nonetheless, the number of industrial
disputes has doubled over the past three years.
In 2001, the total number of registered
industrial disputes, ranging from a wage conflict
to a full strike, was 154,621, according to the
ILO. Last year saw some 300,000 labor disputes.
Labor unrest has surged despite the
Chinese authorities' efforts to keep workers
quiet. The CCP has found itself unable to
intervene because the proportion of the workforce
belonging to the official state-run trade union,
the All China Federation of Trade Unions, has
declined and now represents a minority of workers.
Most of the industrial workforce no longer
works in state factories, but in private
enterprises, foreign-invested factories, and a
huge cluster of enterprises run by local
governments. Even in state factories, union
enrollment has been falling, since the legal union
body is run by the CCP.
The result has
been a proliferation of underground and illegal
trade unions and a dramatic surge in labor
disputes.
"The government's use of
anti-union tactics such as crackdowns on
industrial actions and imprisonment of those
fighting for workers' rights is simply fanning the
flames of what is emerging to be a major threat to
their own rule," said the ICFTU report.
China labor watchers said many of the
disputes related to workers demanding that
employers paid them the minimum wage. Many
employers have been able to take advantage of the
ignorance of their workforce and pay rates half
those set by the authorities, and they add on
unrestricted overtime.
For example, in the
export-processing hub of Shenzhen, which offers
the highest minimum wage, the rate is set at 690
yuan (US$85) per month. But studies show that
average manufacturing wages are only between 38%
and 75% of this minimum.
However, there is
growing pressure from inside and outside the
country to raise labor regulations to
international standards.
Multinational
companies, whose manufacturing and supplier bases
have been shifting to China because of its lower
costs, have begun rigorous investigations to
ensure their reputations are not tarnished by
sweatshop-like conditions.
Recently, Ford
Motor Co, which has been assessing working
conditions at more than 100 supplier plants in
China, said it had declined to do business with
some vendors.
Without specifying names,
the company cited substandard living conditions
where dormitories lacked fire escapes or were in
proximity to toxic-waste dumps. Among the rejected
vendors were also suppliers found violating local
labor laws by paying a training wage below the
minimum wage for long periods.
On the
domestic front, the National People's Congress
this spring began deliberations of the draft of a
new "Labor Contract Law", which is expected to
elaborate the 1994 Labor Law.
"The need to
pass and enforce such a law is pressing," said
Chen Bulei, legal expert on labor issues with the
People's University. "The existing labor law
doesn't reflect the realities of working and
earning in China any longer because it was drafted
during China's transitional period from a planned
to a market economy. We only had sketchy
understanding of market mechanisms at the time."
China has already taken the first steps
toward tightening and modernizing its regulations
with new laws on prevention and control of
occupational diseases and legislation on safety at
work. The slew of new laws, however, skirts core
conventions of the ILO, such as the freedom of
association and the right to organize.
Beijing has ratified the International
Covenant on Economic, Social and Cultural Rights,
but entered a reservation by blocking the
application of a clause guaranteeing workers the
right to form and join trade unions of their
choice.
