Aaron Halegua quoted in Danish newspaper article on China's "Tumultuous Spring"

A good piece by Peter Harmsen discussing recent labor trends in China appeared in the April 21, 2016 edition of the Danish newspaper, Weekendavisen. The original Danish version is available here, but I have posted an imperfect but totally functional English translation below and it is also available as a PDF on my website.

China. The strikes number in the several thousands. The government attempts a familiar combination of sticks and carrots, but there are signs of an intensified official effort against the protesting workers.

Tumultuous Spring


Weekendavisen, April 21, 2016, p. 8

The Chinese city of Shuangyashan, Heilongjiang province, on the border of Russia, was about to boil over last month. The anger was due to the words of the provincial governor at a meeting in the capital city of Beijing, 1600 kilometers to the southwest. Coal mine workers in Shuangyashan have received the wages they were owed, the governor said. No one owes anyone anything. It did not sit well, and it got the miners on the street.

After loud protests, also echoed on social media, the governor had to retreat. He apologized and confirmed that some miners had not actually been paid for months. And the miners got more than an apology. They were also promised payment of the money they had been owed.

“Labour protests have entered a new stage in China. And with the ‘new’, I think that the workers do not intend to give up before the rights they legally are entitled to receive support,” said Han Dongfang, a longtime activist and currently head of the NGO China Labor Bulletin, which is based in Hong Kong.

According to statistics compiled by China Labor Bulletin, last year there were 2774 strikes around China, twice as many as the year before, and the trend seems to have continued in 2016. Both the government and the private sector are hit by walkouts. The Chinese leadership does not hide that it is a problem.

But the question that is rarely asked is: Why? Chaos in the workplace is often described as disruptive to the economy. And the individual entrepreneur is undoubtedly frustrated when battle cries resound through the factory halls. But there are no reliable figures on how it affects the economy as a whole - and the effect could in fact be modest, given that the companies affected are often already weakened. Strikes are more significant politically. It is undermining the Communist Party's legitimacy as the working class standard-bearer.

Not illegal but impossible

In a communist view walkouts should not take place, says Eli Friedman, a researcher of Chinese labor policy at Cornell University and author of The Insurgency Trap: Labor Politics in Post Socialist China.

“In other countries, strikes seen as normal phenomena in the labor market. In China it is - I will not say illegally, because there is no law that says you must not strike - but the fact is that the law does not mention strikes in one way or another, and that is simply not taken into account such an opportunity,” he says.

Despite the cognitive dissonance in Beijing, strikes are nothing new. There have been several waves of them before, not least between 1997 and 2002, when the state sector went on a diet, and up to 30 million workers received redundancy notices. Now state enterprises are again being streamlined, and it can be problematic, even though the number of unemployed this time can be much less, perhaps on the order of a few million.

What makes the situation different today, in Han Dongfang’s words, is that the workers will not “give up”, it is the economic climate. Growth has fallen to its lowest level in decades, and companies are forced to close or move production to cheaper plants in China or abroad. The layoffs in themselves are cause for concern, and hopelessness in the job market makes it worse. If you do not have any prospect of meaningful reappointment, there is nothing to lose, according to Aaron Halegua, a consultant with extensive knowledge of the Chinese labor market.

“Although the problems that workers are protesting may have existed for a long time, such as unpaid wages, the workers have previously been reluctant to challenge their employers for fear of losing their jobs. But when it seems that they will lose their job anyway, workers have little to lose and so take action to recover benefits previously denied them,” says Halegua, also a researcher at the New York University Law School.

NGOs take over

But there is an increasingly uncompromising posture on the other side - and that is also new. Local governments are primarily motivated by a desire to maintain peace and order, and the preferred approach has been a combination of stick and carrot. The workers have therefore soon learned that when they were unable to solve a problem with their employer, they could have a quick protest march through the streets and have been able to attract the necessary attention from the authorities.

“If an employer was unable to pay all the money that he owed his employees, the government would often step in and pay the difference. But as the economy has gotten worse, the local governments also have less money for this purpose, making labor conflicts more difficult to resolve,” says Halegua.

Meanwhile, Chinese politicians signaled that it is time to make sacrifices for the common good. The law on employment contracts, which increased job security in China’s workplaces in the past eight years, is “out of balance,” said Finance Minister Lou Jiwei recently. By favoring workers, he explained, it removes the incentives for employers to recruit new employees - so that everyone would benefit from a change in the law.

The carrot, in other words, is stored away, but the stick has been diligently used. Around the New Year, police arrested a number of senior members of NGOs, who are known for their activities in the labor market. It had great significance because some NGOs had begun to take over some of the functions that unions fill in other countries. For example, they had played an advisory role in the negotiation of collective agreements.

It’s all because of China’s own official trade unions are controlled by the state and the Communist Party. This means that instead of representing workers’ interests, they serve as communication channels down the system, and also keep an eye on their members to remain loyal to the regime.

Previously - and that is, before it started to go bad for the economy - the Chinese state otherwise often took a neutral and sometimes even constructive position. For example, several provinces introduced new laws on collective agreements. The problem is that there is no impartial organization that can represent workers in such agreements - and the NGOs may not, as the recent arrests signal. All this is worrisome, according to Han Dongfang of the Hong Kong NGO.

“There is only one way that the government can meet the challenge, and it is by giving workers the right to conclude collective agreements. Without a right to collective bargaining, the workers have no choice but to express their demands through street demonstrations, which in turn is likely to trigger police abuse. There is no alternative to collective agreements, if one wants a peaceful solution,” he says.

Not like Poland

Officers armed with batons and shields is not a pretty sight, but most observers believe that the Chinese regime, after all, can handle one or more such seasons. And they warn generally to expect a repetition of the events in Poland in the 1980s when a strong independent trade union, Solidarity, ended up being a real, existential threat to the Communist Party.

The key is nationwide organization. As long as the strikes are local and specifically directed at particular companies, people sleep quietly in Beijing’s government districts. The protesting workers allows companies to blame them for their problems, while they drop criticism of the central government or the existing political system, says Jonathan Isaacs, a lawyer specializing in the Chinese labor market at the consulting firm Baker & Mackenzie in Hong Kong.

“Most of the time, workers are simply interested in the most proximate goal, for example, to get their money paid. At the same time, they know that if they are political, then the local government and police immediately crack down. The striking workers are very careful not to make any political statements or do anything that they know will threaten the government,” he said.