Concerns grow over spreading strikes in Guangdong

November 30, 2011

By NOZOMU HAYASHI / Correspondent

GUANGZHOU, China--Government and company officials are trying to head off a new round of strikes by factory workers in Guangdong province in southern China, called the "factory of the world," by improving communication and offering higher wages.

Shenzhen officials in the province plan to raise the minimum wage from January, which the local labor bureau has approved. In addition, some companies are becoming proactive to head off labor unrest through improving communication with workers.

About 240,000 Chinese and foreign companies are operating factories in Guangdong province.

Last year, workers, particularly younger employees, staged numerous strikes in various factories amid the shortage of workers. As a result, some factory operators were forced to drastically increase their wages.

On Nov. 22, about 2,000 workers at a Taiwanese personal computer parts manufacturer's plant in the Baoan district in Shenzhen went on strike. They were protesting the company's plan to force employees to work overtime on weekdays. The firm planned to avoid having employees work on weekends, which cost more.

In October, another strike also took place in a factory that fills orders for major Japanese watchmaker Citizen Watch Co. and other companies.

During the strike, a 28-year-old male worker said, "There is a rumor that the factory will be relocated to a different place. Because of that, many workers are thinking about getting compensation (for the relocation) and landing jobs in other factories."

Eventually, the factory operator ended the strike by making a temporary payment, ranging from 300 yuan to 2,000 yuan (3,600 yen to 24,000 yen) per worker and deploying police officers.

"The labor bureau (of the Baoan district) put priority on a peaceful settlement and urged the factory operator to pay settlement money (to the workers)," said a factory official.

At present, exports from Guangdong province are decreasing due to deteriorating economic conditions in the United States and Europe and the higher appreciation of the yuan against other currencies. If factory operators there raise workers' wages, they will face more difficulties in making a profit, putting them in a bind.

The Shenzhen city government, which raised the monthly minimum wage by 220 yuan to 1,320 yuan this year, has informed foreign companies of its plan to raise the minimum wage further to 1,500 yuan.

The rise is apparently also intended to prevent workers from taking jobs in other cities. However, there is a high possibility that other cities will follow Shenzhen's move in raising the minimum wage.

"We feel that the city government is saying, 'Companies that cannot accept the increase have to leave the city,' " an official of a Japanese manufacturer in Shenzhen said.

On the other hand, Xu Jin, vice director of the Baoan district labor bureau, said, "With the current wage levels, migrant workers cannot bring in their children from their hometowns and allow them to attend schools. They cannot work out their future plans."

Meanwhile, a growing number of companies are trying to improve communication with their workers which may prevent strikes.

In some firms, executives are trying to remember the names and hometowns of their employees and engage them in conversation. In other companies, executives hold parties for their workers.

Analysts say that increasing wages alone do not guarantee smooth factory operations.

"The biggest cause (for strikes) is a lack of communication between companies and their workers. Making an atmosphere for overcoming difficulties together is a key measure to prevent the spread of strikes," said Chang Kai, professor of labor issues at Renmin University of China, who interviewed many workers during the series of strikes last year.

"My actual feeling is that in companies in which strikes take place, there are causes for occurrence of strikes," said Akihiro Maekawa, a management consultant, who is well-versed in Japanese companies' management-labor issues in China.

"In regards to the aspect of establishing relations with workers and managing workers, the gap among companies is widening," he added.

By NOZOMU HAYASHI / Correspondent
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Workers strike at a factory in Shenzhen, China, on Oct. 26. The factory fills orders from major Japanese watchmaker Citizen Watch Co. The strike continued for two weeks. (Nozomu Hayashi)

Workers strike at a factory in Shenzhen, China, on Oct. 26. The factory fills orders from major Japanese watchmaker Citizen Watch Co. The strike continued for two weeks. (Nozomu Hayashi)

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  • Workers strike at a factory in Shenzhen, China, on Oct. 26. The factory fills orders from major Japanese watchmaker Citizen Watch Co. The strike continued for two weeks. (Nozomu Hayashi)

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