Pearl Briefing

Strikes portend a summer of discontent in Pearl River Delta, world's factory

A series of successful strikes is stirring other disaffected workers to air their grievances

PUBLISHED : Saturday, 10 May, 2014, 4:13am
UPDATED : Saturday, 10 May, 2014, 4:13am

Strikes and other industrial action are on the rise in Guangdong.

A massive strike at a factory complex under Yue Yuen, which bills itself as the world's largest contract maker of branded footwear, has moved off the front pages but continues to reverberate across the region. Labour unrest in a number of sectors, from textiles to urban transport, is exposing inequities and lax government enforcement of labour laws.

Based in Dongguan, Taiwanese-owned Yue Yuen makes footwear for many top brands, including Adidas and Nike. Its headquarters are in Hong Kong, where it is listed as Yue Yuen Industrial Holdings on the Hong Kong Stock Exchange. It was a constituent stock of the Hang Seng Index until 2009.

There appears to be no end in sight for tensions between management and labour

Several hundred Yue Yuen workers staged a protest on April 5 claiming the company had failed to make social insurance payments as required by mainland labour law. They accused the local government of neglecting to enforce compliance with the regulations.

The action at Yue Yuen snowballed into a full-fledged strike, with the core group joined by upwards of 40,000 workers. On April 26, the company agreed to adjust workers' social insurance contributions and raise a monthly living allowance, effectively ending the strike.

Authorities have since tried to gloss over or play down the matter, which cast the local government in a poor light.

Many workers in the manufacturing-heavy region come from other parts of China. Disputes over minimum wage increases can spiral into walkouts by migrant labourers.

Despite official efforts to downplay the strike, labour disputes and related discussions - both online and off - are trending heavily in cities across the province and across industrial sectors.

Local media have moved on to other topics - in some cases by official order, or a sense that the story had played out - but on social media the talk is of a growing number of strikes, spreading from Shenzhen to Huizhou and Dongguan.

About 1,000 workers at IBM Systems Technology (ISTC), the server-making unit of IBM, have been on strike since March 3, when management announced the terms of employee transfers to Chinese PC maker Lenovo after it acquired the IBM unit. A week later, 19 workers were fired for violating company rules, according to ISTC

March saw the first wave of labour unrest in the region. In the second week of the month, several thousands of workers at the Ciyu Shoe Factory in Shenzhen went on strike over an abrupt reduction in wages.

On March 26, more than 900 bus drivers in Dongguan staged a strike for more pay and annual leave after government mediation failed. The following day, more than 1,000 workers launched a lightning stoppage over a pay cut at Shanmukang Technology, a supplier to South Korea's Samsung, in Dongguan. Employees returned to work when overtime pay and monthly subsidies were raised.

In April, industrial action continued to disrupt businesses in the delta, sometime referred to as the "world's factory".

Starting an April 8, about 1,000 workers downed tools at a Japanese-owned printing factory in Meizhou city, demanding better wages. Almost a week later, 2,000 angry employees at Galanz Electronics in Zhongshan damaged company property when management reneged on a promise to pay salaries.

This was followed, in quick succession, by new strikes by workers at the LG electronics factory in Huizhou, about 50 taxi drivers in Dongguan seeking a cut in their licence fees, and thousands of bus drivers in Shenzhen over wages and conditions.

A successful strike can inspire other workers to follow suit. Workers at Yue Yuen say they were inspired by the strike at Shanmukang in March.

"Because of our strike, the authorities and the company are setting up an office to normalise workers' social insurance payments," a workers' representative said at the shoemaker's Dongguan plant. "I also heard our action inspired migrant workers in Guangdong and across the country."

There appears to be no end in sight for tensions between management and labour. Some 1,200 workers from 101 factories across Shenzhen issued a letter online on May 1, Labour Day, demanding that factories comply with social insurance payments. The letter invited other workers to join the campaign, and demanded that employers provide living wages and a safe work environment.