So far this year, about a thousand strikes have been recorded in China, many of which took place spontaneously. What’s the reason for all this unrest?
It’s mainly workers from private construction firms and manufacturing companies who are on strike. The slower economic growth and falling exports have led to a large number of lay-offs, and in other cases wages have not been paid regularly. Many workers are desperate because they haven’t received wages for months and do not know how to support their families. In such a difficult situation, they are willing to accept reprisals from their employer or even the state.
How exactly do these work stoppages take place? How do strikers organise?
Discontented employees and redundant workers often start protesting spontaneously. Younger employees know more about their rights today than their parents did at their age. They have higher expectations and more self-confidence. It’s become much easier to co-ordinate protests now that smartphones are widely available. In most cases, a protest starts off with a small group of disgruntled workers. It’s hard to organise properly, though, as trying to co-ordinate with a large number of people is a risky undertaking in China. In fact, a lot of protests lead to nowhere as none of the initiators are prepared to take up negotiations with the management. There aren’t any bodies that represent workers’ rights apart from the All-China Federation of Trade Unions, and most of all, this organisation wants to maintain social harmony – just like the Chinese leadership.
How has the Chinese government responded to such protests?
Local governments have taken all kinds of steps to curb social unrest as they’re afraid of strikes spreading. They employ a kind of carrot-and-stick approach: local officials put both employers and employees under pressure to get them to look for a compromise together. At the same time, though, the state is not afraid of sending the police in against strikers to get them off the road and keep them from protesting.
In contrast to this tactic, company executives have tried to divide striking workers by making attractive financial offers to individual leaders, luring them back to work. State-owned enterprises, on the other hand, try to prevent strikes from occurring by offering workers financial compensation, early retirement and part-time employment in order to reduce the social impact of lay-offs.
The Chinese government plans to lay off 1.8 million people in the steel and coal industry. Do you think that the leadership’s anxiety about growing social unrest will delay the structural reforms in state-owned enterprises?
Citing internal sources of information, foreign media have reported that as many as six million jobs will be cut in unprofitable state-owned enterprises over the next two to three years. The Ministry of Human Resources and Social Security is holding back details, however. China’s leadership is afraid of social destabilisation and will try to stop any protests from arising. What they are attempting to do here is to buy peace on the job market: in April, seven ministries announced that funds to the value of nearly 13.5 billion euros will be made available to pay for pensions upon early retirement, to retrain workers and to subsidize IT companies that choose to take on industrial workers. Mind you, it’s very doubtful that steel and coal workers can be turned into entrepreneurs and IT specialists just by attending training courses.
If workers’ protests start to increase again over the next few months the government is likely to not implement the reforms. Consequently many of these “zombie” companies will be allowed to carry on, even though they’re totally inefficient.
What does the social unrest mean for foreign companies?
Foreign manufacturers who are dependent on partnerships with Chinese firms affected by the strikes can expect to see delays and interruptions in their supply chains. In the current tense atmosphere, strikes are also more likely to occur at foreign companies. Unfortunately, it can’t be ruled out that the state’s media will use foreign businesses as a scapegoat - to draw people’s attention away from the shortcomings of Party and government policy.
At the time of its founding, the Chinese Communist Party defined itself as ‘the party for workers, soldiers and farmers’. If workers are now taking to the streets in protest all over the country, isn’t that a direct threat to its claim to legitimacy?
Strikes by workers employed by state-owned enterprises do represent an ideological weak point that is being exploited by critics of the Chinese leadership. Currently, though, the workers who are on strike aren’t a serious danger to the Party at the national level: they have hardly made any political demands so far and they rarely have links to other people around the country. The government is taking tough action against activists who are calling for more workers’ rights, and numerous arrests were made quite recently.
The danger I see here has more to do with the fact that the Chinese leadership may be unable to keep its promise to the people to create a moderately prosperous society for them: The social gulf is getting bigger and bigger: if a manager can now earn up to ten times more than his staff – which is not unusual these days – then it’s sure to further alienate workers and will damage the Communist Party’s image.
Click here to download our infographic "China on strike - Labour protests in China from January to March 2016"