China: The struggle for grassroots independent unions

Regime announces union ‘reforms’ – is democratisation of the state-run unions on the cards?

The recent strike wave in China reignited workers’ demands for real trade unions and elected representatives. How will the regime and its puppet unions meet this challenge – is democratisation a possibility?

On 17 May, when a 24 year-old worker at Honda’s transmission plant in Foshan hit the ‘emergency stop’ button, bringing the factory to a halt, his bold action started a two-week strike that, like the action of a railway switch operator, shifted the giant locomotive of Chinese labour onto a completely new track. The Foshan strike has become famous as the starting point of this summer’s daring strike wave. Most of the workers in this first strike, like those that followed, were in their early 20s. Many were interns whose conditions of employment are more precarious than other workers. Through audacity, determination and an ability to improvise tactics and methods ‘under enemy fire’ (management attempts to break the strikes) this new generation of migrant workers must be counted as a decisive factor in the new China.

Streik at Honda in Zhongshan

These dramatic events have forced politicians and economists around the world to take notice. The Wall Street Journal warns the strikes are, “a dilemma for the Communist Party” whose leaders are “very concerned about a scenario like that in Poland in the late 1980s in which an independent labour-union movement led to the overthrow of the Polish government…”

Although strikers have won what at first sight appears to be big increases, of 25%, 30% and in some cases 50%, these are little more than “catch up” increases. During more than a decade of sluggish or non-existent wage growth, China’s labour productivity increased at nearly 10% per annum, delivering huge gains for the capitalists especially in overseas markets. Then most local governments imposed a virtual wage freeze when the global capitalist crisis struck in 2008. Many commentators speak of employers “using the crisis as an excuse” to hold down wages and increase exploitation (longer hours, unpaid overtime, non-payment of retirement insurance and other benefits).

Across the country local authorities relaxed their enforcement of labour laws. One Dongguan factory manager said of the local government: “They don’t say you don’t have to follow the labour laws, but now it’s ‘one eye open, one eye shut’.” Other areas introduced local laws to counteract the provisions of the labour contract law. This law “entered a state of paralysis in certain areas” according to Qiao Jian of the China Institute of Labour Relations. Everywhere the working environment became tougher due to the crisis. People’s Daily Online (March 10, 2010) reported that 14.4 percent of the workers experienced unpaid wages in 2009, up 10.3 percentage points from 2007. These and other statistics covering wages and overtime pay reveal a further shift of power and wealth – under cover of the crisis – from labour to capital. This downward pressure has collided with spiralling costs especially as the economy has recovered. The price of rice is up by 17 per cent from a year ago and fresh vegetables are 22 per cent more expensive.

Recently Premier Wen lectured visiting Japanese government officials about the “relatively low wages” at Japanese companies being a cause of the strikes. Wages at many Chinese sub-contractors are even lower. Official media want to give the impression the government supports pay rises and even looks favourably upon the strikes as a way to extract better terms from foreign capitalists. This is a fairy tale. If true, why have the strikes been met by repression, greater or lesser police brutality, and a media blackout to limit any “copy cat” effect?

Despite reports that minimum wages have increased 12 per cent on average this year, the monthly minimum is still just RMB 770 in Dongguan and RMB 960 in Beijing (an increase from 800 in June 2010). Shanghai has the highest minimum wage in the country of RMB 1120. With the pressures of globalised capitalism and its “race to the bottom”, the Chinese authorities are forced to walk a tightrope between an explosion of workers’ anger on one side, and the capitalists’ ability to shift production, investment and jobs to the “lowest bidder” on the other.

The strikes of 2010 therefore represent to some extent the “revenge” of younger workers after the privations of the last years. A confluence of several factors suggested it was now time to take a fight. These were the upturn in the economic conjuncture and stronger economic growth in inland areas, which opened an alternative job market to the coastal regions, leading to a labour shortage in some parts of Guangdong and other export regions. Additionally there has been strong investment especially in the motor industry. Honda, which has been hit by at least ten strikes in China, announced plans to expand its China production capacity by one-third in the next two years. Despite higher labour costs the company expects to profit from the world’s largest and fastest-growing car market. Another crucial factor behind the strikes is the changing outlook of the new generation of migrant workers. A majority now regard themselves as “workers” rather than “farmers” or “farmer-workers”.

“They are a new breed. Their different experience means they have different expectations…. This society has shaped their thinking, cut off their road back home, and left them with no exit.” – This was the view of a Beijing student working at a Dongguan factory last summer [Random Thoughts on factory Life, China Labour Bulletin]

Call for “restructured unions”

Even before the recent strike wave, statistics show an upsurge in workers’ grievances and protests. In December last year, Liaowang (瞭望), the magazine of the official Xinhua News Agency, reported that “According to the Supreme People’s Court, the civil courts accepted 280,000 labour dispute cases in 2008, up 93.93 percent over the previous year. In the first half of 2009, 170,000 cases were accepted, up over 30 percent.”

But more alarming for the Chinese regime and the “stability” it values above all else: “Mass incidents stemming from labour disputes dramatically increased and took more violent form, raising public awareness of the issues. Many experts and academics interviewed for this article agreed on this point, and added that labour disputes had now become a major source of conflict in Chinese society.” [Liaowang].

At the same time, the regime is wary of staging a crackdown. Not only do the strikes enjoy considerable support among other workers and middle layers, but also the regime is not sure repression will work and fears triggering a wider social explosion.

The most significant feature of the struggles of 2010 has been the calls, repeated by strikers from Dalian to Tianjin to Guangzhou, for ‘restructured’ trade unions and ‘grassroots’ representation. During the strike at the Honda Foshan plant, this demand was posed in the sharpest fashion when 200 paid thugs, hired by the local branch of the official union, attempted to physically break the strike. When this tactic backfired and, rather than weakening the strike, generated even greater fighting resolve among the young workers, the official union representatives were ‘sacrificed’ by their bureaucratic superiors and the Honda bosses. A written apology was issued by the union just days later. This was one of the workers’ most important conditions for a resolution of the strike.

These strikes, and the prominence of the trade union question within them, mark a turning point. This is because of the degree of organisation, the sympathy generated in society as a whole and above all the consciousness on the union issue. As one commentator in China Daily pointed out: “The All China Federation of Trade Unions (ACFTU) has realized that the Honda strike is a different form of labour protest, not least because it goes to the heart of a problem – what is the union’s legitimate role. Its impact is potentially enormous.” [Emphasis added by Socialist magazine]

There have been other mass struggles in which the demand for independent unions has surfaced. The movements in Liaoning and Heilongjiang in 2002 stand out as an important example. But also in other strikes such as the Shenzhen Uniden workers’ stoppage in 2005, the rejection of the ACFTU and demand for genuine workers’ representation was a driving force. In the 2002 movement, based mostly on xia’gang workers [laid-off state sector workers], the authorities responded with some token concessions but also with comprehensive repression. Protest leaders were arrested and jailed. At Uniden, management and local officials coordinated their response to “smother” the demand for an independent union by offering quite generous concessions. This time, however, because of the sweep of the strikes, a high degree of consciousness and antagonism towards the official union, and the centrality of this demand, it will not be so easy for the government to extricate itself. The genie of trade unionism has been released from the bottle!

What is ACFTU?

The ACFTU claims to be the biggest labour organisation in the world with a purported 226 million “members”. But it is a “yellow” (i.e. bosses’) union. And not just that, it’s also an integral part of the Chinese state. ACFTU chairman, Wang Zhaoguo, is a top member of the CCP hierarchy and a first vice-chair of the National People’s Congress. As a union the ACFTU has a rather unique track record:

• It has not led or supported strikes or advocated pay increases. Since 1982, when strikes were forbidden, the union condemns all such “illegal” action.

• It has never protested against arrests of worker activists or strike leaders

• It “recruits” members by co-opting private companies and their management into the union structures. For most workers the union does not have a physical presence, its existence is only shown by the deductions of “membership fees” from their wages.

The shift to capitalism “led to dramatic marginalisation of the ACFTU” in the 1990s, according to the Hong Kong-based IHLO. The ACFTU’s traditional base was in the – shrinking – state sector, while today about 80 per cent of companies are either privately run or foreign owned. Fearing a damaging power vacuum in privately-owned factories, Beijing pushed the ACFTU into this sector with instructions to establish “branches” and head off any steps toward self-organisation by the workers.

Where the ACFTU exists, and this covers most privately-owned companies today, it has been reborn as a “joint venture” between management and local government with the aim of controlling the workforce and preventing protests and independent organisation.

“In foreign enterprises in Guangdong’s Pearl River Delta region, union representatives (where they exist, that is) are assigned by the local governments, whose paramount interest is to attract foreign investment. These governments, historically, are former production brigades or communes or townships, which now rent out land to companies and appoint a few local union-ignorant people to run the trade union offices. Even some higher-level union officials dismiss them as ‘fake unions’.” [Anita Chan, China Daily, 18 June 2010]

Is the government-ACFTU about to change?

As to whether change is afoot the answer is both yes and no. Clearly, the government-ACFTU must change its methods in the face of these strikes. If it flatly refuses workers’ demands for grassroots unions it risks losing all control over the process. Echoing its approach to media controls in our internet age, the government will first try to sell “its own version”, backed up by restrictions and implied threats, rather than leave a vacuum in which other forces can come forward.

The proposals so far unveiled are largely cosmetic, rather than possessing real substance. As always, vague indications of coming change are qualified with the word “gradually”. One thing is clear: the fundamental character of the one-party state and its fake union remains the same. It is simplistic and naive to say as some commentators did on news network CNN that “the ACFTU now faces the choice of changing into a genuine workers’ union or remaining marginalised.” Such a perspective, of the ACFTU evolving into a genuine workers’ organisation, is ruled out.

The government understands the implications of the call for “restructured unions” should this trend continue its sweep through industry. An independent trade union movement, based upon the world’s most numerous proletariat and in its biggest exporting base, would become an economic and political superpower. There are many things an authoritarian dictatorship can do, but it cannot for any length of time share power with a rival or independent power. The “reform” initiatives announced by the government-ACFTU in recent months must be understood in this light – as part of a defensive manoeuvre to head off a movement towards real trade unions.

The main plank of this “new” policy is some superficial and still unclear gestures in the direction of workplace elections. The aim is to provide a safety valve for workers’ discontent, a mechanism to release pressure but not provide workers with a real means to fight. Some scope for workplace elections will be granted. But the regime will want to keep this within strict limits, to fence each workplace off as a hermetically sealed unit, and prevent genuine grassroots structures emerging. According to the ACFTU plan, workers may be allowed to elect factory representatives, but these will be under the “supervision” of the union hierarchy at district or city level i.e. the government!

Some labour rights advocates and ‘experts’ are already applauding this conjuring trick. Han Dongfang, Director of China Labour Bulletin in Hong Kong, has described the government’s response as “positive”, saying the new proposals “could turn out to be of historical significance”. The Socialist warns that this is absolutely not what the government-ACFTU intends. That they can be pushed to concede more, much more, than they wish is another matter altogether. But this depends on the level of mass struggle in the coming period, not on alleged “reforms” or “reformers” whose influence within the government is negligible. The positive factor in this situation is that the government feels forced to beat a retreat – albeit a small one. This means there is more to be won, that mass struggle can produce bigger, more far-reaching concessions!

No one should be overly impressed with the offer of workplace union elections, made as they are within the controlling framework of the ACFTU. As the saying goes, “the devil is in the detail”! According to Liu Jichen of the ACFTU’s legal work department, the elections will feature candidates “endorsed by the union”. He added, “Even with direct elections [of union chairmen], no mode is allowed other than the current unified trade union system, where grassroots unions are led by their higher authorities.” [South China Morning Post, 23 August 2010, emphasis added by Socialist magazine]

Clearly, the election system envisaged by Liu and other bureaucrats will include built-in “safety switches” such as the right of higher-level ACFTU committees to approve or reject candidates at factory level. The role of such “safety switches” – like the odious functional constituencies in Hong Kong’s “democracy” – is to guarantee the one-party dictatorship ultimate control and insure workers and grassroots’ demands are filtered out of the system.

Strength resides in unofficial workers’ organisation

The Chinese regime has considerable experience of organising small-scale elections – in tens of thousands of villages – and these are hardly a good omen. Not only are these elections conducted in such a way as to preclude real campaigning, or grassroots organisation, but they have increasingly become a battleground for naked business interests or clan-based power struggles.

If companies lose the power to appoint union representatives which they wield today, they will bring their pressure to bear on the union structures through a more indirect approach, cultivating the higher echelons of the ACFTU more assiduously and also intervening in the “democratic experiments” at factory level, supporting their own agents against genuine worker representatives. This of course can be achieved by numerous means, from bribery and threats to black propaganda. This is also the experience from the above named village elections.

Workers in China should therefore treat the latest official noises on union “reform” with the greatest scepticism. This does not mean dismissing this development altogether. Any symptoms of a crisis in the ruling apparatus should be exploited. Workers should naturally press for the right to elect their own representatives “according to the law” and try to use this process to advance their demands. But for this to be successful, it is necessary to organise informally and separately from government institutions. Despite its ongoing ‘face-lift’, the ACFTU remains for workers a hostile undemocratic organisation, capable only of undermining the class struggle and limiting workers’ horizons to one workplace, with no possibilities to forge links between factories and cities.

To build stronger organisations it is necessary to exploit even the most limited legal channels. But unless unofficial structures, factory committees or other directly elected and accountable local organs are built within the shell of the official structures, workers will not have an instrument they themselves control. The example of the Honda Foshan workers is again a great lesson. In negotiations their representatives pledged not to reach any agreement without putting this to a vote of a workers’ assembly, and they demanded management give all workers time off to attend such assemblies.

The Beijing regime will do its utmost to resist, and its capacity for manoeuvre and delay is legendary. But the formation of independent grassroots’ unions is now only a question of time. This is the significance of the recent strike wave.

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September 2010