(TibetanReview.net, Jun17’23) – China maintains that its phenomenal economic growth of the past several decades has been beneficial to the global economy and that the world therefore needs to be grateful to it rather than criticizing its human rights record and authoritarian political system. However, the reverse seems to be even more true. While cheap exports have propelled China to the position of the world’s second largest economy, tumbling exports are now feeding unrest in the country, which has been described as the world’s factory.
Strikes at Chinese factories have surged to a seven-year high and are expected to become more frequent as weak global demand forces exporters to cut workers’ pay and shut down plants, reported Reuters Jun 15, citing a human rights group as well as economists.
The report said exports and factory output in the world’s second-largest economy tumbled in May, as looming downturns force the United States and Europe to pare back orders for goods made in China.
The report cited Chinese labour researchers as saying some factories closed or were struggling to pay wages or severance for laid-off workers as a result. And this had led to a spike in labour disputes that hurts consumer and business confidence just as it was recovering from three years of Covid-19 curbs, they have said.
“We believe that the drop in manufacturing orders and factory closures will continue,” Aidan Chau, researcher at Hong Kong-based rights group China Labour Bulletin (CLB), has said.
“Firms are adapting to the reality of overcapacity through pay cuts and layoffs,” Xu Tianchen, senior China economist at the Economist Intelligence Unit, has said.
CLB has recorded over 140 strikes at factories across China in the first five months of this year, the highest since the 313 recorded during the same period in 2016.
The rights group’s data is mostly based on protests reported on social media, some of which CLB has been able to verify through contact with unions or the factories, although not all reports are verified, the report said.
The group has said many of the strikes were concentrated in China’s manufacturing heartland of Guangdong province and the Yangtze River Delta, and involved exporters, including from garment, shoe and printed circuit board factories.
Job and salary cuts “will not only be detrimental to growth, but could also become a source of instability,” Xu has said.
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“This boss paid off law enforcement and is cheating workers’ money,” a video published on May 24 on Douyin, China’s version of TikTok, was stated to read in its caption, referring to dozens of female workers at Zhong Min Sportswear Goods Shenzhen Ltd. Co. who had walk out of a factory compound.
Another video posted by the same user was stated to show a factory manager reading a document denying workers compensation, with workers demanding that an independent third party intervene.
Also, another video published on May 26 was stated to show a handful of workers standing on the roof of Shenzhen cable factory Xin Dian Cable Ltd. Co., holding a banner that says “the boss owes us wages”. And another video published last week was stated to show the company’s workers debating compensation with a company lawyer.
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Chinese factories, which produce a third of global manufactured goods, form complex supply chains that ultimately rely much more on exports than domestic demand, leading to giant trade surpluses in the $18 trillion economy, the report noted.
Labour activists have said manufacturers make use of a workforce of hundreds of millions of rural migrants, many of whom are on temporary contracts or hired informally.
This is said to leave workers vulnerable to unpaid overtime, impromptu pay cuts, or layoffs without due process or compensation, as factories look to reduce costs.
Workers find it hard to win in any conflict. Security forces intervene early to disperse protesters and censors scrub evidence of disputes on social media, the report said.
China’s Ministry of Public Security, Ministry of Human Resources, the Shenzhen police and the All-China Federation of Trade Unions – a state-run umbrella organisation for all unions in the country – have all not responded to questions from Reuters.
Labour unions were central to the Communist Party’s proletariat beginnings but play only a marginal role in modern authoritarian China, the report noted.