Abstract
As China rapidly becomes an economic superpower, the country has taken centre stage in policy debates, with concern focused on exacerbated competition and growing global economic imbalances. The wave of workers’ protests and suicides in China’s export processing zones and rising public resentment of growing income and social disparities raise questions about the sustainability of the Chinese growth model.
This book is therefore timely in providing the historical and cultural context for China’s unprecedented pace of growth and in looking at how its labour legislation and industrial relations have evolved in recent decades.
Most of the contributing authors are Chinese and have conducted on-site field research into these topics. Their presentations at a panel on Chinese labour relations at the Global Labour University (GLU) in Berlin 2010 gave rise to a lively debate among trade unionists and academics, leading the organizers to commission this book. Further contributions came from other researchers working in the area of labour and social inequality in China.
The book consists of four parts. The first deals with China’s high growth model, the concomitant rising inequality, the way class relations have changed since 1978, the emergence of collective contracts rather than collective bargaining, and the fragmented minimum wage system (Chapters 1–4). Part Two looks at the differing production regimes and the resulting heterogeneous industrial relations system. Starting with an interesting theoretical debate on the significance of different production regimes, specific examples from the textile, garment and automotive sectors are then looked at – notably the 2010 Honda strike. This is backed up by interviews with high-ranking officials from the official trade union in South China, looking into labour activism and the industrial relations context in their region (Chapters 5–8). Part Three looks at how official policies on corporate social responsibility (CSR) evolved in response to the perceived need for a ‘harmonious society’ to maintain social and political stability, and how Chinese and foreign companies have responded (Chapters 9–10). Part Four is devoted to the ‘commodification’ of land in the context of first the financial crisis, and second the transition to private ownership (Chapters 11–12).
China differs from such 19th century manufacturing hubs as Manchester, insofar as the Chinese working class has already tasted the communist vision of society. After three decades of communist-led command economy, the all-powerful party-state has been moving towards a capitalist economy since the 1978 economic reforms, a move that benefited from broad-based public consensus despite widespread dissatisfaction about its downsides. Unlike Detroit’s mid-20th century ‘arsenal of democracy’, Chinese workers’ militancy remained fragmented and politically suppressed. Though South China’s industrial belt has sucked in Chinese peasants on a massive scale, these have come from state farms, and not, as seen in Europe, from severed feudal ties, or, as in the US, from being ousted by corporate cash crop farming. The consequence is that the various stakeholders face different industrial relations challenges.
Exposed to arduous and hazardous working conditions, with low pay lagging productivity growth, poor living conditions and inadequate social protection, the main challenge facing workers is strengthening their ‘voice’ – at present largely absent from the official All China Federation of Trade Unions (ACFTU) – and gaining recognition of their collective bargaining rights, still elusive in current labour legislation and practice.
Having up to now benefited from cheap and abundant labour, employers are now seeing the legitimacy of their business model increasingly coming under scrutiny, both in China and abroad. Furthermore, demographic ageing and improving living conditions in rural areas are making it necessary to offer better pay and working and living conditions in urban industrial centres. The CSR initiatives adopted by companies in response to these challenges have so far had little impact on the shop floor (Chapter 10), though worker militancy and media attention have led to improved labour legislation and pay – particularly minimum wages.
For the official trade union movement – the ACFTU – the main challenge involves changing from merely being a party-state ‘transmission belt’, little more than a workplace social welfare agency and all too often siding with management in labour disputes, to becoming a genuine representative of workers’ interests, without challenging state rule.
For the ruling Communist Party the challenge is to contain labour unrest triggered by growing frustration with widening inequality and putting a question-mark over the Party’s legitimacy. This unrest is not just a threat to social and political stability but also to the Party’s hold on power. Government also has to deal with provincial and local authorities’ actions possibly contradicting its policies and aggravating these threats (Chapters 11–12). Government responses have been to endorse CSR as a way of achieving a ‘harmonious society’ (Chapter 9) and to enact or update labour legislation to mitigate inequality. Their implementation is however lagging.
Inequalities in income distribution are also seen as a threat to further economic development. Not only do they undermine social cohesion but they also limit domestic consumption, now considered an increasingly important factor for achieving more balanced growth and social and political stability (Chapter 1).
Despite the obvious discrimination between urban and rural migrant labour, where the former fully benefit from the fruits of growth – including housing, education, higher incomes, more stable jobs and social protection – while the latter remain in temporary and precarious employment, class consciousness has been slow to evolve among the latter. This is due to the continued link to their rural homes where they are entitled to (albeit low-level) social protection, education, etc. (via the ‘hukou’ system of residence permits). However, with a second generation of migrants emerging, any return to rural roots becomes less feasible. Their ‘proletarianization’ is consequently inciting more open protest against their living and working conditions. Awareness of this change has led the government to re-regulate industrial relations and develop more extensive social protection (Chapter 2). But while these laws have spawned millions of ‘collective contracts’, they have had little impact on wages and working conditions. Workers were not involved in drafting such agreements which were signed either by company ACFTU officials or by management, and the right to collective bargaining and the right to strike remain absent from labour laws and regulations (Chapter 3). Instead the government is attempting to meet workers’ rising expectations by raising statutory minimum wages. However, wage-setting methods remain non-transparent, resulting in great regional disparities despite recent substantial increases. The resulting wage floor is inadequate for achieving the government’s stated objectives of boosting demand and reducing inequality, even though minimum wages have significantly increased over time (Chapter 4).
Part Two throws a particularly interesting light on the classification of the diverse forms of industrial relations in modern China’s core manufacturing industries, i.e. steel, chemicals, automotive, electronics and textile and garment. They are based on the concept of ‘production regimes’ pioneered by Michael Burawoy and deal with workplace and external ‘politics’, focusing on the one hand on modes of production, management systems, work organization, the contractual foundations of employee rights, etc., and on the other hand on the extent that the social wage plays a major role in the bargaining position of the workers. The five production regimes discussed differ in the types of workers they employ, the career prospects they offer, social insurance coverage and relations to trade unions. These differences contribute to generating and maintaining inequality among workers, making it increasingly difficult to ensure socially accepted labour standards for all (Chapter 5). These and earlier findings are confirmed by the in-depth look at working conditions and industrial relations in the textile industry (Chapter 6) and at the Honda strike clearly illustrating the change of attitudes among second-generation rural migrant workers (Chapter 7). The shortcomings of the ACFTU as a ‘voice’ representing the genuine interests of workers is clearly acknowledged in interviews with ACFTU local officials in South China, who also courageously outline the way forward (Chapter 8).
The issue of land reform – notably making land a tradable commodity – is closely linked to the rise of social inequality. The central government response to the 2007 financial crisis resulted in increased debt levels through the mortgaging of public land in urban areas. With the government’s stimulus package requiring regional and local authorities to co-fund 70 percent of expenditure, the latter were forced to use public land to leverage loans as one revenue-generating measure. The resulting property boom fuelled inequality among city dwellers (Chapter 11). However, a more positive prospect exists in improved possibilities for the state to transfer collective land rights to individuals in rural areas. Though there is a danger of this leading to the further proletarianization and impoverishment of a majority of the rural population, the authors see it as a path towards higher rural incomes through a more efficient use of land (Chapter 12).
The outlook for the future remains mixed – some authors are rather pessimistic, while others see chances for progress. The book certainly deserves attention from social partners, policy-makers and academics looking into global economic and social imbalances and ways of making economic growth compatible with decent work.