Strike highlights pressure on wages
Justine Lau
Financial Times
27 October 2004
A strike at a Chinese factory acquired by China Resources Enterprises, a Hong Kong-based conglomerate, has highlighted the upward pressure on wages in China amid labour shortages.
The unusually long strike, in its seventh week, could also trigger similar incidents elsewhere in the country as the government continues with efforts to privatise more than 190,000 state-owned enterprises (SOEs), an industry observer said.
"There is similar unrest at factories all over the country at the moment and we expect more strikes as China continues its SOE reform" because local governments often exclude workers from restructuring discussions, said Robin Munro, research director at China Labour Bulletin, a worker-rights publication in Hong Kong.
While social unrest is widespread in China, strikes, which usually last for only a few days, are less common as they are illegal and can cost workers their jobs.
According to China Labour Bulletin, 6,800 workers in a factory in Shaanxi province in northern China have been on strike since the middle of September.
They are protesting against new contract terms, such as lower wages, set by their new owner, China Resources, a Hong Kong-listed, mainland government-backed group.
About 10,000 retired workers have also been protesting in nearby Anhui province for higher pensions.
The disputes underline the growing voice of Chinese workers, with the country now facing a shortfall of about 2m workers, although the shortages are confined mostly to coastal areas.
"It provides a strong wake-up call to local governments and investors that workers in state-owned enterprises are not likely to just take any offer they are given when their factories go under the axe," said Mr Munro.
Joe Zhang, analyst at UBS, expected more strikes in the future.
"Workers are becoming more aware of their rights and we expect the number of strikes to continue to rise," Mr Zhang said. "But I don't think there will be big confrontations because the government encourages mediation."