China labour unrest intensifies as orders decline

China is facing its worst wave of labour unrest since a series of wildcat strikes at Japanese-owned car plants last year, as declining export orders force factories to reduce workers’ salaries.

In the past week, more than 10,000 workers in Shenzhen and Dongguan, two leading export centres in southern Guangdong province, have gone on strike over deteriorating work conditions. The latest protests broke out on Tuesday at a Taiwanese computer factory in Shenzhen, just across the border with Hong Kong.

“There has been an intensification of labour unrest in the past week that is probably the most significant spike in unrest since the summer of 2010,” said Geoffrey Crothall of China Labour Bulletin, a Hong Kong-based labour advocacy group that monitors unrest in China.

The spike in labour unrest comes amid mounting concerns about the global economy, which is suffering from the European sovereign debt crisis and a weak recovery in the US. Fears about the Chinese economy grew on Wednesday after a manufacturing index compiled by HSBC fell to levels not seen since March 2009. Underscoring the concern, the acting governor of Guangdong last week said the province’s exports dropped 9 per cent in October from the previous month.

According to Mr Crothall, factories are cutting the overtime that workers depend on to make a living because of a drop in orders from western companies that source their products from Chinese factories.

Tuesday’s protests followed a bigger demonstration last week at a shoe factory in the industrial city of Dongguan that supplies footwear to Nike and Adidas. About 7,000 workers at the factory owned by Pou Chen, another Taiwanese company, were protesting against a cut in overtime and the shifting of work to other factories in the Chinese hinterland and Vietnam where labour costs are lower.

“We still haven’t started working. We were forced to return to the factory,” one worker told the Financial Times. “But we just sit there. No one is operating machines.”

The worker, who did not want to be identified, said the local government had taken a tough stance on the negotiations and had sided with the management.

Mr Crothall said companies in south China were quick to pass on the effects of declining orders to workers, which sometimes came as less overtime. He pointed out that the average basic wage for electronic workers, for instance, was about Rmb1,500 ($236) a month, which rose to Rmb2,500 with overtime.

“Their basic wage is never enough on its own without overtime,” Mr Crothall added.

At Jing Mold Electronic, the computer peripherals factory where there was a strike on Tuesday, workers said they had been asked to work 16-hour days on weekdays so that the company could avoid paying them overtime for working at the weekend.

For Guangdong’s leaders, the wave of industrial unrest comes during a week when protests by farmers against land acquisitions also reached a crescendo. On Monday, an unusually large demonstration of almost 5,000 residents in the town of Wukan was allowed by the local government.


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