Factory to the world will soon get the right to strike

HONG KONG: Workers in China may be just a step away from attaining the ultimate proletarian utopia — the right to strike, which they have been denied for nearly 30 years.

The revolutionary move is indicative of the tectonic changes under way in China’s economy, say labour activists, and could have far-reaching implications for China’s hitherto-low-wage manufacturing prowess and for companies that do business here.

Draft labour regulations, introduced in June by the municipal government of Shenzhen, the booming Special Economic Zone in southern China that has consistently set the pace for reforms across the country, have effectively brought the “taboo” subject of strikes “within the scope of legal regulation,” says Chen Yu of the Shantou Federation of Trade Unions.

“We are only a step away from the right to strike,” exults Chen. “The paper-thin barrier can be breached.”

China’s meteoric rise as a manufacturing giant and an economic superpower over the past three decades was made possible by the fact that it had one of the most flexible labour markets, where workers did not have the right of collective bargaining or the right to strike. Only one workers’ union, the official All China Federation of Trade Unions (ACFTU), is recognised under law. Such business-friendly provisions made China the envy of enterprises in other developing economies such as India, and were a magnet for corporations from all over the world.

The right to strike was excised from China’s Constitution in 1982 as part of an amendment on the grounds that the political system in place had “eradicated problems between the proletariat and enterprise owners”. Since then the word “bagong” (strike) has remained taboo in Chinese legislation, and been replaced instead by references to “tinggong” (work-stoppage) or “daigong” (slowdown).

The amended Trade Union Law of 2001 states that in the event of a “work-stoppage or a slowdown”, the trade union “shall... assist the enterprise... in its work so as to enable the normal production process to be resumed as quickly as possible”.

Even though workers don’t have the right to strike, work stoppages are fairly common in the manufacturing centres. In the Pearl River Delta, considered the “factory floor of the world”, some form of labour dispute plays out virtually everyday, involving thousands of workers, notes Han Dongfang of China Labour bulletin, a Hong Kong-based labour advocacy group.

It is in this context that the Draft Regulations on the Growth and Development of Harmonious Labour Relations in the Shenzhen Special Economic Zone, unveiled in June, acquire significance.

The draft regulations too don’t mention the word “strike”. But significantly, they no longer insist that trade unions have to help enterprises resume production as quickly as possible when stoppages occur. Going further, they stipulate that in the event of a work-stoppage, the government may issue an order prohibiting management and workers from taking any action that is liable to exacerbate the dispute, for up to 30 days.  

“By stipulating the rights and obligations of employers and workers, the Draft Regulations have, in fact, brought industrial strike action within the scope of legal regulation,” reasons Chen.

The proposed changes in Shenzhen are finding resonance in other parts of China as well. “Local and regional governments across China are responding to rapidly changing economic and social conditions and workers’ demands by introducing new labour regulations and provisions designed both to protect workers’ rights and to improve relations between labour and management,” notes Han.

Indicatively, a new Employment Promotion Law and a Labour Contract Law came into effect in January 2008; a Labour Dispute Mediation and Arbitration Law, too, was enacted in May.

The promulgation of three major labour laws in one year indicates just how effective workers’ action has been in forcing the government’s hand, says Han. “These laws have not been introduced because the government is particularly enlightened, but because workers’ strikes and protests against widespread and continued rights violations have left the government with no option but to change the law, as a means of forestalling increased labour conflict.”

The proposed measures have prompted concerns that China’s competitiveness, derived from labour-cost advantages in low-end manufacturing, could be undermined, and trigger a flight of manufacturing to other low-wage economies that don’t have labour law rigidities of the sort that China is now contemplating.

Han points out that even if the revolutionary draft proposals are adopted, their effective implementation is critical. Several questions remain, he adds. “How will China establish the nuts-and-bolts of a genuine collective bargaining system? Will such a system allow workers to negotiate wage agreements that reflect the true value of their labour and not just the legally mandated minimum wage? Will the ACFTU embrace the system or sit on the fence?”

Even so, as Chen says, Chinese workers may well be within striking distance of winning the right to strike.