Guangdong shelves plan for worker representation on boards
The Guangdong government held off putting a proposal through the province's legislature requiring mandatory worker representation on the boards of foreign manufacturers, a Hong Kong industrialist says.
Speaking after a forum on how Hong Kong small and medium-sized manufacturers should cope with the increasingly unfavourable operating environment, Federation of Hong Kong Industries chairman Cliff Sun Kai-lit revealed the development.
He said members of the federation learned last week through a meeting with officials of industrial policy setter Guangdong Development and Reform Commission, that it has no plans to submit the controversial proposals to the standing committee of the Guangdong People's Congress for approval.
'There have been some adjustments in the wordings in a policy document pertaining to the democratisation of foreign manufacturers' boards,' he said. 'I believe the delay is to reduce conflict in society.'
The proposals were put forward after labour unrest swept across the mainland this year, troubling foreign manufacturers from Japanese carmaker Honda to Taiwanese contract electronics maker Foxconn. They include making one in three company directors labour representatives and giving them a say on pay rises and employee welfare.
Sun quoted Guangdong party chief Wang Yang as having told over 40 Hong Kong industrialists operating in the Pearl River Delta last Thursday that they ought to 'raise their risk alertness', or they may not be able to survive another economic crisis.
Sun said although Guangdong leaders have reiterated its policy the processing trade has not changed. He expected tougher measures to phase out manufacturing that uses cheap labour to process low-value added products to come.
These include allowing union members to sit on manufacturers' board and take part in wage talks. Guangdong is eager to upgrade manufacturing in the Pearl River Delta to higher value-added activities and services, in order for the region to catch up with Shanghai-led Yangtze River Delta on economic growth rate. In addition to promoting the growth of technology industries, the logistics and financial services sectors, Guangdong is also inducing low value-added manufacturers to move to the less developed interior regions.
It has stiffened environmental protection rules on factories, raised sewage fees, boosted minimum wages and improved workers' rights to discourage pollution-prone and low value-added manufacturing.
Wu Jun, deputy director general of Guangdong's department of foreign trade and economic co-operation, said the province was spending 40 billion yuan (HK$46.5 billion) to build 34 industrial parks in 15 cities in these regions for the factories to relocate to. It also set aside 7.5 billion yuan to help them on staff retraining when they upgrade their production activities.
Michael Enright, a business strategy professor and adviser to governments, said amid the appreciating yuan, a dwindling supply of labourers willing to work in factories, rising material and energy costs, exporters must differentiate their products and seek new customer segments.
