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Chinese worker's strike update

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I got a reply from the Adidas Group concerning the situation in the Yue Yuen factory. It is a hilarious letter, some excerpts are below

We were closely monitoring the situation at the production site from the beginning. In order to minimise the impact on our operations, we reallocated some of the future orders originally allocated to Yue Yuen Dongguan to other suppliers. But we never intended to pull out of the Yue Yuen factory in Dongguan and we have no plans to do so.

And here is why we need an international labour movement, if companies can minimise the impact of a strike, what leverage do workers have to negotiate?

It is our understanding that the insurance contributions which YY had been providing, together with corresponding deductions from the workers, were in accordance with an agreement which they had reached with the Dongguan authorities and the local social insurance bureau.

Read corruption here. The letter fails to mention that the same local authorities used riot police against the protesting workers and incarcerated labour rights activists.

YY has now committed to achieve full compliance with the national requirements by May 1st 2014

Yay! The strike ended last week, additional to the contribution in the insurance funds, workers also got a pay raise and other benefits.

Some links:

A card carrying member

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Last week I became an official member of the IWW, red card and everything. Which is fitting because I really wanted to write about the workers' strike in China.

Since almost two weeks 50.000 workers of the shoe factory Yue-Yuen in Donguan, Guangdong have been on strike. They are fighting for the legally guaranteed employers contributions to social (health, retirement, housing funds) insurance funds.

The employer is required to contribute to these funds according to the Labor Contract Law, which was adopted by Standing Committee by the 10th National Congress in 2007. A copy of the law can be found here.

It is an astonishingly progressive piece of legislation, requiring every employer to provide a written contract, pay at least minimum wage, pay workers equally and regularly (wage default was very common), guarantee safety regulations, regulate work hours and pay into social insurance funds.

As a reaction to the law most of the biggest sport shoe companies announced that they are looking for alternative production sites, claiming production costs would rise too much, if they had to adhere to the law.

In reality the law has been mostly a paper tiger. The law is seldom enforced not only because of the widespread corruption.
The whole political/economic system is geared towards economic growth. GDP is the major outcome measure used for evaluation on local as well as national level. In the last two five year plans (11th: 2006-2011, 12th: 2011-2016) the main target was to grow the GDP by 7/8% .

These are also the criteria used by the CCP to evaluate the performance of local governments. These evaluations also concentrate on short time spans, half a year to a year, which means local governments main goals are rapid growth, rather than long term sustainable development and instead of cooperating they are pitched against one another.

Donguan is positioned right next the towns of Guangzhou and Shenzhen and is part of the Perl River Delta, one of the main hubs of China's industry based economic growth.It has experienced an immense population growth in the last ten years, due to the influx of migrant workers, in 2008 only every 5th resident did not have a migration background and population has grown from around 2 to 8 million in this time.

This demographic development requires an immense amount of infrastructure to be build, such as living space, which would not immediately show a big return as far as economic growth measured in GDP is concerned. Furthermore local governments become interested in production values of companies settling there.

Therefore, despite what the central committee decides in the five year plan (The 11th included the labour contract law, while the 12th had a whole section devoted to the issue of migrant workers.) local governments are more inclined to cater to the need of cooperations than the workers.

Workers are systematically misinformed about their rights. Independent workers rights organisations are... discouraged. Yet, in the last 7 years awareness among workers about their rights has increased and they have been fighting more and more for them, culminating in the strike of more then ten thousand workers.

A few days ago I read in "der Spiegel" that the Adidas Group (Adidas, Reebok, TaylorMade and Rockport) is pulling contracts from the shoe factory because of the strike. It does however keep the business relationship with the supplier company "Pou Chen Group" intact, showing a blatant disregard towards workers rights and local laws. I encourage people to write to them and ask them to adhere to local labour laws and regulations and to draw consequences if their suppliers don't.

Here is their contact page:

More info about the strike:

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