Walmart in China

PUBLISHED : Sunday, 15 January, 2012, 12:00am
UPDATED : Sunday, 15 January, 2012, 12:00am


Related topics

Walmart in China
edited by Anita Chan
Cornell University Press

When inspectors visited a factory in Shenzhen making toys for Walmart, management and workers were given advance warning. Managers coached workers on what to say; they were offered a 50-yuan bonus if they answered correctly and would be fired if they gave the wrong answers.

Company rules stated a maximum work week of 72 hours but employees were often required to working until midnight - four hours past the daily limit - especially in the six weeks before Christmas. Since it was illegal, it was not paid.

'One day, the line leader sent me for a talk with the Walmart auditor,' one worker said. 'The auditor asked me how many overtime hours I took, how much I was paid and if overtime work was voluntary. But I did not dare tell the truth, because right before I went to the office, the manager told me how to answer these questions 'correctly'.'

So it reads in one chapter of Walmart in China, which gives an insight into one of the thousands of subcontractors who produce goods for the world's largest retailer. If its own auditor cannot find out what is going on, what hope has any inspector from outside?

China is the most important manufacturer in the world for the US giant and supplies 70 per cent of its merchandise. Of its thousands of global suppliers, 80 per cent are based on the mainland. The centre of its global purchasing is in Shenzhen. Its annual imports from China are more than US$30 billion, making it the largest single US importer of Chinese products.

In addition, Walmart has become one of the biggest retailers in China. As of August 5, 2010, the company had 189 units in 101 cities on the mainland, employing more than 50,000 people and nearly 20,000 suppliers.

The book is edited by Anita Chan, a Hong Kong-born scholar based at the Australian National University. She has published widely on the conditions of Chinese workers, trade unions and labour rights issue.

The book consists of 11 chapters by 13 experts in different disciplines. The topics include the lives of a Walmart store manager, a lower-level store supervisor and a cashier, employees' wages, 'voluntary' overtime and the company's strict labour discipline and how a trade union established branches in its stores - that has not happened in its branches outside China.

'After more than a decade of proliferating codes of conduct in the global toy industry, sweatshop labour abuses have clearly not been eliminated,' Yu Xiaomin and Pun Ngai write in their chapter on labour standards in toy factories in southern China.

China's Labour Law stipulates a working week of 40 hours, with a maximum of nine hours overtime. The two found that Walmart allowed its suppliers to have a standard of 72 hours a week. The final take-home pay for workers during the busiest season was 600-700 yuan a month in 2004 and 2005, the period studied. 'Walmart's internal and external monitoring systems are not sufficiently credible, accountable or effective.'

But in its perpetual hunt for lower prices, Walmart is finding that even China too expensive. In 2010, it announced that it had decided to source garments from Bangladesh in a big way, doubling its purchases to US$2 billion a year and sourcing 20 per cent of its garments from the country.

For those who want to understand how this giant retailer operates in China, this is a detailed and well-researched book.