BusinessEconomics

Labor Unrest in China

Author: Xiaolin (Cathy) Lu
Shanghai Foreign Language School Affiliated to SISU
March 2, 2021


This paper explores labor unrest in China. The analysis examines the country’s rapid rise in global manufacturing and its implications for workers, along with its harmful ramifications and possible resolutions.

Industrialization & Labor Market

The Industrial Revolution of the late 18th century witnessed the decline of feudalism and gave rise to industrial capitalism in western countries. At the time, coal, an essentially unlimited energy source, substituted for the inherently limited source of wood. Subsequently, the application of this new energy source to steam-powered machinery fostered the factory system (Bannister 2016), in which the means of production, raw materials, powerful machines and factories, became concentrated in a group of select individuals. These profit-driven capitalists controlled capital, built factories, and employed a massive workforce. As Marx and Engels wrote in the Communist Manifesto in 1848, capitalism “has created more massive and more colossal productive forces than have all preceding generations together.” (Frieden 2013)

Before the Industrial Revolution, workers entailed craft skills to produce goods that were consumed domestically and locally. Agricultural activity remained the main domain of work. However, as the Industrial Revolution spread, workers increasingly crowded into cities where factories, transportation, and infrastructure were located. Workers began to work fixed-hours under rigid conditions that were set by factory owners. Meanwhile, because of technology change, the mass production of goods first became possible in the early nineteenth century. The manufacturing process was broken down into segments. Workers followed routinized instructions and were required to repeat one specific task as a part of the whole manufacturing process. This is known as the division of labor. Adam Smith, who witnessed the beginning of the Industrial revolution, noted that the increasing division of labor must inevitably be associated with a simplification of the tasks to be performed by each individual worker (Brugger 2018). Skilled artisans, who manually crafted items, became displaced by the streamlined production process in factories. Moreover, with the spread of Taylorism and Fordism later on in the twentieth century, owners maximized output with forms of mass production like assembly lines.

While several European countries succeeded in following the path of England’s Industrial Revolution, China, on the other hand, didn’t industrialize until 150 years later. There are various explanations for why the Industrial Revolution failed to occur in China at that time. As Wen-yuan Qian and others argue, it was China’s imperial and ideological unification that prohibited the growth of modern science and impeded the country’s industrialization process (Lin 1995). Nevertheless, in the past few decades, China has experienced fast industrialization;  in 2012, China accounted for 19.8% of the entire world‘s manufacturing output (Li 2014).

Workers in China

1. Economic development & labor force

China’s labor market is one of the most important factors contributing to its fast growing economy in recent decades. From 2000 to 2005, manufacturing accounted for 32% of China’s GDP and 89% of its merchandise exports (Robertson 2008). The share of the population employed in the secondary industry to the total population also increased from 7% to 30% between 1952 and 2012 (National Bureau of Statistics, 2013). Foreign factories favor China for the abundance of cheap labor it offers. Even as the working population has shrunk in recent years and as many international companies turn to other countries in Southern Asia, China maintains the largest manufacturing labor market in the world.

  2. Migrant Workers

a. Definition

         A key component of the Chinese labour force is rural-urban migrant workers, accounting for 72 percent of China’s urban workforce (347 million) (Lee 2016). Migrant labor’s contribution to the GDP was estimated at about 30% and 31% of GDP of Beijing and Shanghai in 2007 (Caijing, 2009a). While “migrant workers” in the U.S. usually refers to workers who immigrate from other parts of the world, in China, migrant workers refers to people who left their original, rural homeland in China to seek work within Chinese cities. In 1958, the hukou (household registration) system, divided into agricultural (rural) hukou and non-agricultural( urban) hukou, was adopted to control rural-urban migration and labor mobility. For people holding rural hukou, they are considered rural residents entitled only to social benefits provided by their places of origin even if they live and work in urban cities. Chinese migrant workers, who hold rural hukou but work in urban China, are thus not considered urban residents. Thus, for migrant workers, they cannot access social welfare in their working places, such as education, healthcare and pensions, which are only eligible to local urban hukou holders. Moreover, most migrant workers are incapable to meet the requirements to change a rural hukou to an urban one. Migrant workers often suffer from social exclusion in big cities. They are mostly staffed in manufacturing sector and other low-end services that urban residents rejected. A 2004 national survey indicated that migrants accounted for 68% of the manufacturing sector’s workforce (Wei 2006).

b. First & Second generation migrant workers

         The distinction between the old and new generation of migrant workers is vague, usually workers born after 1980s are considered the new generation. According to a national survey from 2013, the total number of new generation migrants has exceeded 100 million, which is about 60 % of the total rural migrants in China. The Second generation migrants are usually depicted in literatures as having better education, more connected to urban life, and more actively engaged in defending their rights compared with first generation migrants. Comparisons between the social integration of first and second generation migrant workers have constantly received wide research attention. The comparisons become important indicators of improvements in migrant workers’ living and working conditions.

c. Dispatched Workers

         China’s Labor Contract Law in 2008 demands companies to provide labor contracts only to direct employed workers. As a result, companies see “dispatch workers” that are paid and employed by subcontracting agencies a way to cut cost. Dispatched workers tend to receive less pay compared with their directly employed counterparts and endure partial or delayed payment of wage as most subcontracting agencies are not supervised under strict regulation. In 2014, an International Labour Organization study revealed that against rising costs in a slowing economy, there was systemic usage of subcontracted labor in the Chinese manufacturing, construction, and services sectors (Liu 2014). By 2011, there were 37 million dispatched employees, accounting for 13 percent of total employees in China. And a little over half (52%) of the sampled dispatch workers were rural migrants(Chan 2019).

d. Student Intern

         Students at technical schools are required to do internship at factories in order to get a graduate diploma. Since students normally lack leverage and legal channel to secure their rights, factories and schools together exploit the cheap labor of students. 

Chinese worker empowerment

1. Mistreatment of Migrant Workers

Rural migrant workers are the equivalent of cheap migrant labour in Lewis’s (1954) model of unlimited surplus labour supply. Their ‘temporary’ legal status and permanent ineligibility for local citizenship make them vulnerable to mistreatment and easily expendable (Chan 2010). Many migrants suffered inferior working conditions including long hours in dirty, noisy workshops and frequent wage delay and defaulting (Chen 2009). Workers sometimes even desire overtime working because their basic wage is too low to meet local living standards. The Chinese Household Income Project Survey of 2002 show that over 80% of migrants worked seven days per week, and only 7% workers’ working time was in accordance with what law regulated (Shi 2008). Migrant workers make up 80% of the deaths in mining, construction, and chemical factories. And about 90% of those suffering from work-related diseases are migrant workers (Zheng 2005). The 2002 CHIPS data also indicates that only 5 per cent of migrant workers were covered by a pension scheme, less than 2 per cent by unemployment insurance, 3 per cent by medical insurance and that less than 10 per cent were living in public housing (Shi 2008). In Hengyang Foxconn, survey showed student interns are required to work 10 hours a day, six days a week. For interns who refuse to work overtime and night shifts, teachers threaten them with graduate diploma and carried out physical violence. These teachers were in turn provided a 3000 RMB ($425) “subsidy” from the factory (China Labour Watch 2019). At the same time, in one documented case concerning a dispatch worker in the steel industry, the dispatch worker’s claim for “equal work equal pay” was rejected as the court’s verdict read: “…Equal work refers not just to the same kind of work, but also to equal labor ability, skill, and equal results and so on. Those issues are not within the capacity of the court to determine.” (Chan 2019).

2. Labor Unrest in China

Labor unrests in China are mostly localized and usually characterized as “defensive”. Workers demand most often for immediate wage rise. A research analysis of 308 strike cases verdict indicates that from 2008 to 2014 more than a half of strikes argues for a rise in salary. Yet, cases of strikes in China are scattered among pieces of news report without any official data collection. China Labour Bulletin 2011 estimated that roughly 30,000 strikes and protests by workers occurred in 2009 alone (Elfstrom 2014). A recent peak in labor unrest was in 2010, when labor disputes and strikes concentratedly took place. Among the incidents are the well-known cases of employee suicides at Taiwan-owned enterprise Foxconn and a series of strikes in Honda. After hundreds of workers walked off the job at a Honda plant for two weeks, Honda was forced to increase workers’ pay by up to 32 percent. Similarly, Foxconn announced a 70 percent pay rise after worker suicides raised questions about working conditions at the factory (Ward 2010). In addition, during the “summer strike wave” in 2010, the Shanghai- and Suzhou-centred Yangtze River Delta, the Pearl River Delta and the Dalian-centred Liaoning region all experienced interest-based strike actions that called for the increase of wages and benefits (Chang 2015).The database of the Supreme People’s Court shows a marked increase in lawsuits over “dispatch work” in basic-level courts: from 59 cases in 2012 to 1255 cases in 2014 (Chan 2019).

  3. Literary Works & Chinese Worker Empowerment

a. Positive Attitude

Optimistic attitudes about worker’s empowerment persist in works analyzing the new-generation migrant workers. C. Cindy Fan and Chen Chen (2013) wrote that new-generation tend to pursue migrant work not only for economic return but also self-improvement and urban experience. They are less tolerant of low pay and poor working conditions and are more ready to express their frustration, including resorting to protest and even suicides (Fan 2013). Elfstrom (2014) also affirmed that due to labor shortage and media openness, workers are gaining more leverage and are becoming more assertive in their demands arguing for higher wages, better working conditions and more respect in their working environment. Data from the research supported the claim by suggesting a steadily increasing trend in strikes, from 3.6 actions per month in 2008 to 32.1 actions per month in 2012. Cheng (2014) noted that with the suicides at Foxconn, the new-generation migrants demonstrated strong will when they held strikes, undertook collective bargaining, and achieved impressive outcomes. Cheng pointed out that the strategies used in the Honda strike in 2010 and 2011 were unprevailing among the first-generation migrants.

b. Pessimistic Attitude

         Nevertheless, Ching Kwan Lee (2016) reveals that the soaring cost of living in bigger cities already outweighs the minor increase in salaries and that the second generation consumes more but earns less – their demands also fail to go beyond rising wages. Discussing strikes, Ching Kwan Lee  acknowledges that once set in a longer time period, the amount of strikes is actually decreasing and the corporations are more able to respond to strikes by firing the organizers or by “reinstating its own management staff” as head of labor unions. He and Wang(2016) indicated that urban lives of the new generation suffer from the same level of precarity as their predecessors, sometimes even worse because the rigid hukou system and fiercer competition among migrant workers. Friedman and Lee (2010) argued that Chinese strikes are largely localized, with workers demanding for change only specific to their factories. “Strikes are fundamentally cellular in the sense that the cells are not combining to form tissues.’’ Even if workers successfully had a wage rise, it is still unlikely that a durable system of adequate workplace representation will be created. 

Moreover, Li (2014) suggested that older migrants showed better mental health status than younger migrants. According to Leng (2020) the new-generation migrants have a significant weaker sense of rural identity than first-generation migrants, while they show no significant stronger sense of urban identity. Instead of integrating better into the urban society, their social identity is in fact “stalled”.

Ethnicity & Labor

1. Ethnic minority groups in China

Ethnicity discrimination seems a minor issue in China, where people rarely stand out in the crowd because of skin color or ethnic dress code. With efforts of homogenization of ethnic minorities made by the Chinese government, ethnic identity of individuals is gradually ignored and we intuitively categorize Chinese people we meet as people of the Han ethnic group. As a result, minority groups in China become increasingly marginalized as their needs and demands are disregarded. The Han ethnic group makes up 92 per cent of the 1.2 billion population, while minority groups which include Tibetans, Mongolians, Uighurs, Koreans and Tujia make up around 109 million people (2001). The Uigur, Kazakh and Kirgiz nationalities, who concentrated in the region of Xinjiang, speak Turkic languages and regard Chinese as a foreign language. Furthermore, their Muslim traditions bear little resemblance to the Han cultural traditions. Tibetans, at least half of whom live in the Tibet Autonomous Region display a high degree of cultural homogeneity which is religious-based, Tibetan Buddhism, and also linguistic: fewer than one in three Tibetans can write Chinese (Isabelle 2000).

The fact is that ethnicity conflict continues to be a persistent issue in China.In the manufacturing and textile city of Ningbo ethnic minorities are sometimes blamed in the media for rising crime rates, perpetuating inter-ethnic tensions and negative stereotypes (Tyson 2018). In an ethnic riot in 2009, at least 150 people have been killed and thousands more have been injured or arrested in Urumqi, Xinjiang (Lipscomb 2016). Researchers recorded 213 ethnic violent events between 1990 and 2005 in the Ethnic Violence in China database (Cao 2018). News reporting abuses and conflicts in ethnic minorities are filtered before reaching the public. Chinese government feel compelled to minimize the impact of ethnicity tensions in an attempt to maintain national stability. At a UN Committee on the Elimination of Racial Discrimination hearing to consider a Chinese government report on minority rights recently, China was accused of having a superiority mentality, especially in its reference to Tibetans and other minorities as “backward” (The Irish Times 2001). 

2. Exploitation of labor force of minority groups

In Xinjiang and Tibet regions, government has been taking radical measures to repress minority groups with the excuse of combating extremists. News reports on the subject was rarely heard of, never making their way up to Chinese online platforms. Nonetheless, as the Australian Strategic Policy Institute estimates, between 2017 and 2019, more than 80,000 Uighurs were transferred out of the far western Xinjiang autonomous region to work in factories across China through schemes under central government policy known as Xinjiang Aid. At the factories, the Uighurs were forced to have Mandarin lessons and “ideological training” outside of working hours, subjected to constant surveillance and banned from observing religious practices. Furthermore, it was “extremely difficult” for Uighurs to refuse or escape the work assignments with the threat of “arbitrary detention” (BBC News 2020) Villagers from Muslim minorities, targeting mostly Uighurs and Kazakhsare, were compelled to work with order from Chinese officials. The labor bureau of Qapqal ordered that villagers should undergo military-style training to convert them into obedient workers, loyal to employers and the ruling Communist Party. Under pressure from the authorities, poor farmers, small traders and idle villagers of working age attend training and indoctrination courses for weeks or months, and are then assigned to stitch clothes, make shoes, sweep streets or fill other jobs. The government maintains that the Uighur and Kazakh villagers are an underemployed population that threatens social stability. “Turn around their ingrained lazy, lax, slow, sloppy, freewheeling, individualistic ways so they obey company rules,” the directive said (Buckley 2019). Such acts of coercion towards ethnic minorities in China again poses heavy suspicion whether Chinese laborers are actually enjoying the rights they are entitled to.

Chinese Governmental Infringement

Labor unions, a common tool workers turn to when defending their rights in workplace, operate differently in China than that in western countries. After the massive worker protest at Tiananme in 1989 that caused heavy injuries and multiple deaths, independent labor unions were prohibited in China. The All China Federation of Trade Unions (ACFTU) became the only labor union admitted by the government, which can establish its branches at local levels. Chinese labor unions are highly integrated with political institutions. ACFTU, in its essence, is an organ of Chinese Communist Party. The main objective of the organization is thus to help ensure central government policies are carried out swiftly instead of answering petitions of grassroots labor. In 2006, ACFTU Chairman Zhao Wangguo affirmed, “All trade union organizations must consciously accept the leadership of the Party, resolutely implement the Party’s line and directives and also comply with all decisions and plans adopted by the Party Central Committee.” (Bai 2011) As China fosters rapid economic development in recent years, the trade union sides more often with capital than with labor. 

One recent attempt the Chinese government made to ensure fair employment for migrant workers is the Labor Contract Law in 2008. The law clarifies regulations related to the content of labor contracts and imposes penalties for companies failing to provide written contracts to employees (Bai 2011). It also aims at improving processes of labor grievances through mediation, arbitration, and litigation in order to avert collective actions of labor protests(Remington 2015). The 2008 law is no doubt a milestone for labor rights in China. However, enforcement of the law is still largely overlooked at local levels. While the central government focuses on reinforcing its authoritarian role, it is the local government that in reality enforces specific terms and laws. As Lee (2008) stated, local government aims at the “accumulation of revenue and resources rather than legal reform”. Local government usually aligns with large corporations, but stands opposite from the exploited workers. As a result, workers right are not strictly protected and judicial cases at local levels are loosely tried. Chinese and International NGOs become workers’ main support for their power of leverage, taking labor right cases over for civic and obligation causes.

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About the author

Xiaolin (Cathy) Lu

Cathy is a junior at the Shanghai Foreign Language School Affiliated to SISU