New Internationalist

Made in China

Issue 388

On the eve of the world trade summit…

Hong Kong today – bright lights, and a dark side too.

Few places embody the words ‘international trade’ so convincingly as Hong Kong.

Take the highway from the best airport in the world, follow it past vast modern docks, and you enter a buzzing, vertical city, a multi-levelled cathedral to commerce, with state-of-the-art skyscrapers, spotless metros and elevated walkways teeming with busy people.

Two hours up the railway line lies a restless giant. China, the world’s most booming economy, has just replaced Britain as the fourth largest trading power. At its current pace it could become number one by the beginning of the next decade. Nobody who has entered a shop in the past five years really needs to be told this.

Hong Kong is well positioned to take advantage of the boom. It’s the ideal spot for trade fairs aimed at businesspeople eager to access the world’s largest cheap-labour market.

On the edge of the glittering waters of Victoria Bay is the Convention Centre where the world trade summit is to be held. Flanked on either side by two expensive hotels, well-heeled delegates need not stray outside the protected zone. If they do, they will find themselves in Wanchai, Hong Kong Island’s smart – but also red light – district. It seems that someone has thought of everything.

Now for the other side of the Hong Kong story.

A few metro stops away, up into the Kowloon peninsula, several workers share one room in order to pay their extortionate rent. Some will be from Hong Kong’s 200,000-strong population of low-paid migrant workers, many of them domestics.

But others may be locals fallen on hard times. Not so long ago Hong Kong had a million manufacturing workers; now it has 200,000. Many of the people working as hotel cleaners or in the kitchens of noodle bars are former manufacturing workers who were well paid until they lost their jobs when production moved to mainland China.

High GDP does not mean high income: 250 million of China’s people still live on less than $1 a day.2

‘Free trade is working for big business tycoons but it’s a failure for workers,’ says LC Yan of the Hong Kong Confederation of Trades Unions. ‘Workers are suffering from free trade policies and we are unable to protect them. Wages are five to ten times higher in Hong Kong than in China, but the cost of living is more than ten times higher.’

So – lucky workers in mainland China. Hong Kong’s loss is their gain. It’s a story that is repeated and reported in newspapers in many parts of the world. Or, in the words of Mexico’s President Vicente Fox, the Chinese are ‘stealing’ Mexican jobs.1

It may come as a surprise, then, to learn that China’s trade miracle has done almost nothing to increase employment in the country. While the 1990s saw China’s economy growing at a staggering 10.4 per cent a year, net employment growth was as low as 1.1 per cent.2

This was partly due to mass lay-offs in the sectors controlled by the state. Between 1996 and 2001, no fewer than 26 million manufacturing jobs were lost, accounting for 40.5 per cent of all such jobs.1 The current unemployment rate in China is as high as 10 per cent in rural areas and 12 per cent in urban areas.2 The Hong Kong People’s Alliance, which is co-ordinating the civil society events, complains that mainland activists are being prevented, at the eleventh hour, from travelling to Hong Kong.

But gemstone worker Fong is one who has made it and his story sheds light not only on conditions in China but also on its relationship with Hong Kong. He is a laid-off employee of a Hong Kong company that relocated to China.

’I am one of the first silicosis victims of the opening of the market economy in China. I cannot fight against my boss because my boss is very rich and I am poor. Last year I came to Hong Kong to look for my employer but he refused to see me. He is evading his responsibility. But it’s not only him. The Government too is evading responsibility. Hong Kong is taking advantage of a cheap labour force to abuse workers.’

More than half a million workers are suffering from ‘occupational diseases’ in China today. Labour activists reckon this is an underestimate. Coalmine deaths get international coverage, but actually the main cause of illness and death is poisoning by chemicals.2

The young woman who now takes the podium at this international gathering of trade unionists works for the Hong Kong-owned company Kamsang, which produces Golden Peak batteries. It too relocated its production to mainland China. The company is embroiled in a dispute with its workers, who claim they are suffering from cadmium poisoning.

‘We have many health problems to do with poisoning, including hair loss. We have asked for proper medical treatment but we do not receive it. We are told to wash our bodies several times before a body check. Why? These are unreasonable demands. The checks take place in a hotel, not in a hospital. Why? Many workers have to travel a long distance to have the checks. Some of those examining us are not qualified to do so. Security guards beat up workers when we protested.’

China’s workers are not passive. The number of industrial disputes has grown from around 10,000 in 1992 to some 300,000 a year. And one of the issues that most provokes workers is that of ‘back-wages’.

Hundreds of thousands of Chinese workers are having to wait two, three, sometimes six months for their wages. Some $43 billion is owed to them, says labour analyst Munina Wong.

These are the people who are funding the Chinese miracle. Yet they have no say, no rights, no collective bargaining power. The one official trade union body – the All China Federation of Trade Unions – is a paper union, run by management.

When international labour activist Neil Kearney visited a factory in China recently this is what he found: ‘700 workers, ragged, dirty, malnourished. They were living in factory premises, sharing one room between 12. For food they had watery soup, with a little bit of rice or vegetables. I was shown a notice that said: “This factory is run by its workers” and which identified the general manager as the head of the union.’

The labour activists gathered here are clear about what form of trade justice they want. Decent work and labour rights must be at the heart of it. They want the World Trade Organization to incorporate into its mandate the ‘core labour standards’ drawn up by the International Labour Office (ILO). These are very basic and include: freedom of association and the elimination of forced labour, child labour and discrimination in the workplace.

Pascal Lamy, WTO Director General, has been invited to speak to the meeting. With characteristic caution he indicates that his position is the same as it was before he became Director General. He thinks that there should be ‘coherence’ between the WTO and ILO standards.

This is music to the ears of many activists gathered here. But others have their doubts. Martin Khor of Third World Network says: ‘Of course I support labour rights and ILO core standards, entirely. But we need to reduce the power of the WTO, not increase its mandate.’

In manufacturing one pair of Timberlands, sold for more than $100, workers receive less than $0.60.2

Which takes us to the next stop: Victoria Park, in Hong Kong’s Causeway Bay area, where thousands of people from all walks of life and from around the world are gathering.

  1. ‘The Post MFA Era and the Rise of China’, by Au Loong Yu, Asian Labour Update, Issue 56, July-September 2005.
  2. ‘Whose Miracle? How China’s workers are paying the price for its economic boom’, International Confederation of Free Trade Unions (ICFTU), December 2005.

Chinese T-shirt

They called it ‘bra wars’– but bras were only part of it. When, in January 2005, the Multi-Fibre Arrangement (MFA) expired, clothes made in China flooded into Europe and the US. In some instances EU imports rose by 500 per cent. Panic ensued, then customs hold-ups, followed by negotiations with China to limit textile imports in the next few years.

China may be flooding markets but it only receives a small portion of the profits from its textile exports. The value added is often as low as 10 per cent. The lion’s share goes to Western corporations such as Wal-Mart and other brand companies sourcing products in China.

In fact, China’s producers are in a bit of a fix thanks to their government. While negotiating accession to the WTO, China agreed that other countries could apply ‘safeguard measures’ to protect them from import surges from China. But domestically it played down these concessions and in 2004 producers went on a shopping spree for expensive foreign machinery to boost capacity.

When the US and EU re-imposed import barriers in mid-2005 Chinese producers were taken by surprise. Feeling the pressure are textile workers for whom a 15-hour working day is not unusual. Many are low-paid migrants from the countryside, brought in to replace more experienced (and expensive) workers. In Guangdong Province alone two million skilled workers were fired.

‘Instead of viewing Chinese workers as competition,’ says Chinese academic Dale Wen, ‘labour movements outside of China should unite internationally and support Chinese workers’ rights.’

Source: Dale Wen, ‘China Copes with Globalization’, International Forum on Globalization, San Francisco, December 2005.

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