Pringle - Reflections on Labor in China

A G A I N S T the D A Y

Tim Pringle

Reflections on Labor in China: From a Moment to a Movement

A fter twenty-two years in prison, veteran labor activist Li Wangyang was found hanged in his hospital room in Shaoyang on June 6, 2012. The news triggered a ten thousand–strong demonstration in Hong Kong that developed into an international campaign demanding that the State Coun-cil of the People’s Republic of China organize a full inquiry into local gov-ernment claims that Li committed suicide. Li’s tragic fate is yet another reminder—as if one were needed—that building a labor movement is a deadly business. Nevertheless, as the struggle to clarify the conditions of his death continues, a longer historical view tells us another more optimistic—but cautiously optimistic—story: a workers’ movement is indeed in the making.

Heralded by the onset of labor shortages in 2003, the forces of labor appear to have undergone a transformation in China. During the spring of 2002, large-scale protests by laid-off oil workers in northeast China came to an end. I regard the defeat of the oil workers’ three-week occupation of Iron Man Square in Daqing as marking the end of the traditional danwei-based working class as a distinct organizing force.1 This moment stands in contrast to a Polanyian countermovement that has since emerged in the private sector. Within a year of the defeat in Daqing, the forces of internal migrant labor began, at last, to make themselves heard.

Almost a decade later, this still-nascent movement is having a profound impact on the international labor movement. Despite the continued absence of freedom of association and effective collective bargaining, portrayals of

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Chinese workers as powerless objects of authoritarian government and predatory capital are being replaced by a growing belief among workers, activists, organizers, and labor scholars in the capacity of the Chinese working class to constrain the forces of global capital.

On the other hand, the political direction of the gradually coagulating force(s) of labor in China remains unclear. Beverly Silver draws on a global database of historical labor unrest to conclude that capital mobility and reor-ganization of product lines facilitate the emergence of new labor movements “likely to play an important role in widening and deepening processes of democratization” (Silver 2003: 72–73) even as established ones fade. Writing in 2006, Feng Chen argued that path-dependent demands based on “old official norms” (Chen 2006: 60) and reflected in the slogans and points of reference of China’s urban working class preclude a significant positive out-come and prevent them from “redefining their interests in the market econ-omy” (60). In their forthcoming paper on the Honda strike and its impact, Chris Chan and Elaine Hui argue that the political consciousness of private-sector workers remains weak and that “state-led intervention is enough to pacify workers as soon as their wage demands are satisfied” (Chan and Hui 2013). Space precludes a fuller discussion of these important opinions, which, along with my own views on the link between labor unrest and trade union reform (Pringle 2011), will be tested in the coming years. In the mean-time, the goal of these short reflections is more modest: to reaffirm the cen-tral role of class struggle in the analysis of the labor and trade union ques-tion in China.

This essay reflects on the recent achievements of Chinese labor in slowing the process of informalization2 and improving the legal framework governing working lives. Of course, the politics of labor remain paramount and contradictory as the relationship between institutional reform and work-ers’ agency illustrates. On the one hand, attempts by the Communist Party–led All-China Federation of Trade Unions (ACFTU) to improve its represen-tative performance have been encouraged by the party as it strives to promote its vision of social harmony. Opportunities for pragmatic, pilot-led, institu-tional innovation at the local level were boosted by the ACFTU’s decision in 2003 to recognize migrant workers as part of the working class as well as the transfer to the more socially minded party and state leadership of Hu Jintao and Wen Jiabao during the same year. On the other hand, the political con-straints that slow trade union reform remain firmly in place—in order to protect social stability. To understand how these contradictions are being played out for labor and labor organizing and activism in China today, I

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reflect on some of the major shifts that have occurred in labor over the last twenty years. Beginning with the 15th Party Congress of 1997, I chart the general evolution of labor relations from the moment of the removal of the state sector’s “iron rice bowl” and the resistance this generated to the emer-gence of a movement of labor heralded by the waves of strikes in the spring and summer of 2010. My argument focuses on the primary role of workers’ agency and the work of labor nongovernmental organizations in the strug-gles to constrain capital and promote workers’ interests.

“No Work to Strike Against”: Restructuring, Privatization, and the Moment of Resistance

In the 1980s, the state cautiously withdrew from direct management of labor relations. The process involved a combination of regulatory reform and the introduction of private capital into the economy—the latter providing a much stronger impetus for the return of capitalist labor relations than the former. Initially, state-owned enterprises (SOEs) were granted contractual powers over the hiring and firing of new employees in 1986 but were reticent in exercising this autonomy, preferring to prioritize stability over profits (Liu 2005: 86). As the private sector expanded, competitive pressure on SOEs nibbled away at the material basis for danwei-based solidarity between man-agers and the managed, and market-driven contracts began to replace per-manent employment on a much wider scale in the mid-1990s. Since their introduction in 1986, individual labor contracts have become the basis for the new employment relationship, representing “the most significant break with the old employment system” that has “fundamentally changed the rela-tionship between the workers and the state” (Ngok 2008: 46). China’s first national labor law (1995) devoted an entire chapter to employment contracts, and of the nineteen articles therein, all but three related to individual contracts.

As a basic regulatory framework for capitalist labor relations based on individual rather than collectivized labor relations began to take shape, cau-tion in the policy arena faded. Deng Xiaoping’s southern tour of 1992 pre-pared the way for the 14th Party Congress to sanction Deng’s earlier formu-lation of a mixed “socialist market economy” (Pringle 2011: 35), and five years later, in 1997, the urban entitlements of secure formal employment were abandoned as the 15th Party Congress announced the policy to allow small and medium enterprises to close, merge, or restructure (zhua da fang xiao). While privatization as a vehicle for restructuring remained taboo, this is


effectively what happened, as upward of 25.5 million workers were made redundant between 1998 and 2001 (State Council Information Office 2002).

These figures are staggering: 25.5 million workers made redundant in three years! How did the Communist Party of China succeed in tearing up the so-called social contract between the party and working class (War-ner and Zhu 2000: 23)? How did it restrict the consequent social and polit-ical implications of dismantling the iron rice bowl to a moment and, for a while at least, effectively forestall the emergence of a labor movement?

Part of the answer lies in the state’s effective deployment of finely tar-geted repressive measures and a rigorously enforced prohibition on freedom of association. But in my view, the literature points to a more complex set of factors that was to prove the unmaking of the traditional postliberation (1949) urban working class. To begin with, a key instrument of the restruc-turing project was a policy of phased redundancy known in Chinese as xiagang—literally, to step down from one’s post—that had been piloted in thirty cities since 1994 (Pringle 2011: 37). SOEs could not simply sever all relations with employees but retained statutory obligations to pay reduced “livelihood wages” and reduced reimbursement of medical costs and respon-sibility for retraining in re-employment centers sometimes managed by the enterprise trade union. Despite frequent underpayments, rent-seeking, resource shortages, asset stripping, and corruption, the shock of being laid off was nevertheless partially cushioned for many of the millions pushed from the core of the production system to the margins of urban society (Zou and Qin 2001: 55–60).

But what about the workers? Did they not fight to retain their status as “masters of the enterprise”? Dorothy Solinger tracked regional varia-tions in how xiagang was rolled out, producing a “layering of statuses” that hampered solidarity (Solinger 2001: 688). Blecher argues that the national narrative of modernization led to “workers’ acceptance of the core values of the market and state” (2002: 283) and that this did nothing to unite resis-tance that often fragmented along the lines of division and categories Solinger identified.3 I find Feng Chen’s work on the sequencing and semantics of restructuring and privatization more convincing. He argues that the degree of organized resistance among laid-off workers is related to the timing and manner of an enterprise’s announcement of redundancies (Chen 2003: 241). As the policy was enveloped in the logic of capitalist accumulation and the p word lost some of its political sensitivity, privatiza-tion and one-off severance payments based on seniority were substituted for xiagang-related obligations, a development encouraged by the formal


phasing out of xiagang between 2002 and 2004.4 As a consequence, resistance departed from the generally passive “moral economy demands” of workers who felt abandoned by the party, to well organized struggles “framed in class language” (Chen 2006: 43) and directed equally at capital and the (local) state.

But the damage had been largely done. The fact that almost all acts of protest were organized after workers had been laid off gave the state the necessary room to maneuver. As long as production was not impeded, it was able to instruct local governments to avoid overt politicization of the protests by not resorting to violence—a guideline that was nevertheless ignored on occasion. The moment was, in effect, managed by a combina-tion of patriotic spin and minor payouts. Union cadres confined them-selves to conducting “ideological work” (sixiang gongzuo) during home vis-its after workers’ protests dispersed and enterprise leaders devoted their efforts to ensuring that the protests did not spread to production. For example, reports from the aforementioned eighty thousand–strong protests by redundant oil workers in the city of Daqing noted how “the oil company is concentrating on sowing discord among current and former employees. The March bonus has not been issued and the explanation to all employees has been ‘this is a direct result of the demonstrations. Go ask the protes-tors’” (Xianqu Jikan 2002: 6, cited in Pringle 2011: 80).

Crucially, while a new discourse of workers’ rights and class struggle began to emerge in the private sector in this period, strikes at the point of production in the state sector were the exception, not the norm. Apart from blocking roads and railway lines, a course of action that invariably drew forceful intervention from the People’s Armed Police, the majority of state workers’ actions did not, in the final analysis, have the capacity to impact directly on accumulation itself. As one veteran labor academic observed, in many cases there was “No work to strike against!” (wu gong ke ba!).5

The Private Sector and the Making of Workers’ Autonomous Agency

At its economic heart, China’s reform strategy since the 1980s has opened up additional sites of capital accumulation as resources have been chan-neled into the creation of a giant export-led manufacturing sector directly integrated with consumer markets in developed countries. For most peo-ple around the world, this is the China they know best through the press: the “Made in China,” export-driven economy. In the southern provinces of Guangdong and Fujian, the export sector was driven by foreign and overseas


Chinese capital, initially via the establishment of joint ventures with SOEs and later by private units of capital. Enterprise ownership was diversified as the rural communes of the Maoist era were transformed into township and village enterprises managed by entrepreneurial local governments (Wu 2010: 624) prior to their being privatized. Beginning in 2006 under the pre-vious leadership of President Hu and Premier Wen, the state attempted to rebalance the economy, putting wealth redistribution on an equal footing with employment creation and spreading development inland from the coastal powerhouses.

China’s private sector employs huge numbers of off-farm migrants involving the largest rural-urban economic migration in human history. In the early years of reform and “opening up,” migrant workers had to negoti-ate their way through myriad administrative hoops to obtain formal per-mission to work in towns and cities. Underpinning these negotiations was the administrative residential registration system known in Chinese as hukou zhidu or simply hukou, which links access to state-provided services such as education and access to public medical care to one’s place of birth. As the private sector expanded and capital has required ever-increasing numbers of workers, hukou rules have been gradually relaxed in order to maintain a downward pressure on wages and allow China to retain a com-petitive advantage over developed countries (Pringle and Clarke 2011: 62).

The combination of authoritarian government, hukou restrictions, and poorly regulated nonunionized workplaces has produced well-documented and entirely predictable results. In the mid-1990s, workers began to make use of the fledgling labor dispute resolution processes of external arbitra-tion and the courts, but the system, like the national labor law itself, oper-ated on an individual basis that isolated workers. Collective resistance to the exploitation and abuses concomitant with rapid export-led development was largely confined to short sit-ins outside local labor offices aimed at pro-voking government officials into ordering capitalists to obey labor laws. However, the state’s prioritizing of employment-led development, decen-tralized investment regimes, and often corrupt links between government officials and investors stacked the cards against these first-generation migrants whose knowledge of the factory system and the laws supposed to govern it was weak.

Longer campaign-driven struggles seeking compensation for occupa-tional injury and disease allowed relatively small numbers of workers to join with labor NGOs that have in turn attracted the support of the wider regional and international labor community. Consumer-led groups in developed


countries worked hard to force multinationals to adopt more rigorous cor-porate codes of conduct, although these have had little impact on the enforce-ment of labor standards in the global South (Wells 2009: 567). Indeed, cor-porate social responsibility is no substitute for effective primary trade unions and worker representation. Xiaomin Yu and Pun Ngai’s comparison of two Wal-Mart suppliers, one regularly monitored by code inspectors and the other left to its own devices revealed that “the unmonitored factory paid more and provided better accommodation” (Yu and Pun 2011: 69). Given that ACFTU branches are yet to make a significant and consistent impact at enterprise level, where they remain weak and dependent on employers (Pringle and Clarke 2011), we must ask: how has effectively unorganized Chinese migrant labor in the private sector produced the first signs of a labor movement out of these dire circumstances?

A number of factors are important. First, despite the enduring image of China as an endless supply of cheap rural workers, labor shortages appeared following the Spring Festival holiday of 2003 and have continued ever since. Initially confined to skilled and experienced workers required in the coastal provinces, the shortages have spread to other areas of the country. Moreover, the state’s rebalancing policies have spread the shortages to include unskilled workers. Improved conditions for farmers—especially the reduction of tax burdens—has slightly reduced the migrant flow to the coast; urbanization has generated employment opportunities in towns closer to home; and the effects of population control have lowered the numbers of available young people capable of withstanding the stress of working in a global supply chain. For the first time in the reform era, the balance of forces has tipped from capital toward labor.

Second, workers have been quick to recognize the change. The appearance of structural gaps in China’s development model have allowed second- and third-generation migrants to prize open the legal and political space to organize in pursuit of collective interests (Pringle 2011; Pringle and Clarke 2011; C. Chan 2012). The tactics of collective protests have shifted from the short-lived demonstrations outside government offices of the ear-lier period to confronting employers directly via strikes, picket lines, and occasional roadblocks. In the absence of representative trade unions and mechanisms for collective negotiation, a kind of collective bargaining by riot has challenged the low-pay regime and forced employers onto the back foot in some sectors. Although somewhat overshadowed by the Foxconn suicides during the spring of 2010, the extraordinary seventeen-day strike by voca-tional college interns contracted by their school to the Honda car parts plant


at Foshan in 2010 is, to date, the most promising outcome in the new situa-tion. The strikers moved beyond the riotous assembly that had sometimes marked earlier mass strikes and organized peaceful effective picket lines that can still be seen online (Radio Free Asia 2010). The strikers elected representatives to negotiate with management, called in the assistance of a top labor academic, and won a 24 percent pay raise. The strike provoked copycat incidents all over the country, forcing local governments to raise the monthly minimum wage by up to 40 percent and employers in most sec-tors to increase wages.

The third factor has been the reaction of what I term the “functional authoritarian” state informed by regime-survival strategies that are com-plex and sometimes contradictory. In 2008, acutely aware of growing col-lective labor militancy, the state introduced three laws aimed at pacifying the unrest. The centerpiece was the Labor Contract Law. Its drafting pro-cess was subject to an unprecedented public consultation exercise that facilitated the usual saber rattling from the agents of capital spearheaded by the US Chamber of Commerce’s dire warnings of capital flight. On the other hand, labor, NGOs, and even international trade union organizations were able to submit formal commentaries that, to a limited extent, shored up the ACFTU’s input to the drafting process and, for example, strength-ened the case for collective contracts. While the end result was an inevita-ble compromise, the Labor Contract Law nevertheless represents the func-tional authoritarian state’s aim of “curbing informalization” (Gallagher et al. 2011: 9). It was accompanied by two other laws. The Law on Mediation and Arbitration of Labor Disputes makes it (a little) easier for workers to pursue claims against employers and represents the state’s policy of chan-neling disputes into juridical channels. The Employment Protection Law makes it (a little) more difficult for employers to practice discrimination in staff recruitment. In response, employers have increasingly turned to col-lege interns and dispatch (agency) workers to avoid the slightly more labor-friendly legal framework.

The fourth and, for the purposes of this discussion, final factor that has influenced the emergence of a movement of labor in China—perhaps not quite yet a labor movement—has been the reaction of the ACFTU and its partial transition from a command economy labor bureaucracy to a trade union adapting to the market economy. I believe that problematizing the challenge of transition should not be restricted to the extent and pace of reform—which is painfully slow—but should correctly acknowledge the impetus for reform: class struggle.


The constraints on the ACFTU operating as an effective trade union are not complicated: It is legally and constitutionally bound by Communist Party of China leadership. It does not have to compete with other unions for membership. Despite its party connections, it remains very weak at enter-prise level in the private sector. It lacks bargaining and negotiating skills. Finally, it is mainly staffed by civil servants rather than trade unionists, which has negative implications for performance criteria and promotion.

The organization has made some spectacular advances over the last decade. A recruitment drive has increased membership from 87 million members in 2001 to 239 million as of October 2010 (ACFTU 2011). Relations with the International Trade Union Congress have improved to the status of “open dialogue,” and partly as a result, the ACFTU has regained its seat on the International Labour Organization’s Workers’ Group. In 2006, the ACFTU took on Wal-Mart and succeeded in establishing workplace union branches in twenty-two superstores within four weeks (A. Chan 2011: 199). Moreover, some of these branches were established by ACFTU officers orga-nizing employees without the prior knowledge or approval of management. Later in the same year, Foxconn accepted trade unions after the Shenzhen Federation of Trade Unions “unilaterally set up a trade union and did not go through management” (Shanghai Ribao 2007, cited in A. Chan 2011: 207).

On the other hand, the ACFTU’s recruitment drive has been con-ducted principally by resorting to quota-driven top-down targets that are achieved with a phone call from the district office to enterprise management rather than genuine organizing through direct contact with workers. The Wal-Mart breakthrough has since degenerated into a bureaucratic exercise that has more in common with traditional command economy unions (Prin-gle and Clarke, 2011: 41). Jonathon Unger, Diana Beaumont, and Anita Chan looked at the performance of union branches at six Wal-Mart stores and con-cluded that the union branches made no difference to wages and conditions (Unger, Beaumont, and Chan 2011: 238). Tragically, the Foxconn trade union could not take action to reduce working hours from one hundred hours per week or to challenge the management practices that induced the suicides of young workers at its Shenzhen plant, as one senior ACFTU official implied (Zhuang 2010).

My research suggests that the initiatives of individual ACFTU offi-cers responding to class struggle at the local level can produce sustainable outcomes with a wider reach. For example, the Yiwu Workers’ Legal Rights Center in Zhejiang province overcame opposition from employers and gov-ernment departments to establish the first trade union–managed labor


rights center in the country. The Yiwu Federation of Trade Unions went beyond the traditionally rigid division of labor between different govern-ment agencies by integrating trade union rights work with departments and institutions that included the local justice department, media organizations, and the National People’s Congress. Yiwu Federation chair Chen Youde referred to this approach as the “socialization” (shehuihua) of trade union work and pointed out that the Yiwu Center’s legal advisers were hired “out-side the union . . . and are not civil servants” (Pringle 2011: 149–57). In the context of the growth of labor NGOs doing labor rights works in China, the Yiwu Center is significant as an institutional interpretation of a rights-based response to labor unrest. It is unlikely to be rolled out on a national scale in the near future, but the model will be emulated, adapted, and hopefully improved upon in other parts of the country. In citing the center as a positive outcome of workers’ struggles, I am not arguing that such results are a desir-able goal for the emerging workers’ movement, which is a matter for Chi-nese workers to decide. Rather, my aim is to demonstrate that the ACFTU is capable of reform that is not driven by top-down initiatives. Similarly, an unprecedented local sector-level collective wage agreement covering twelve thousand workers producing woolen sweaters in 112 small and medium-size enterprises in the Xinhe district of Wenling City was a response to well-organized protests and strikes led by skilled workers taking advantage of emerging labor shortages. The original agreement was struck in 2003 and involved a genuine, if not properly accountable, bargaining process that involved local party leaders ordering employers back to the negotiating table (Pringle 2011: 114–32). Apart from the wage agreement, the process also led to the establishment of a local sector-level trade union specifically for work-ers producing woolen sweaters. As with the Yiwu pilot, class struggle gen-erated a local initiative in sustainable institutional reform—in this case a sector-level bargaining model—that has since gained national approval from the ACFTU leadership. If class struggle can produce such outcomes, continued class struggle can provide further impetus for more radical departures from traditional trade union practices. The historically impor-tant collective agreement negotiated by elected worker representatives dur-ing the Honda strike in Foshan is a case in point. While nothing is set in stone—and a backlash from the state and capital cannot be ruled out—I hold that China’s development trajectory is producing conditions in which an integrated national labor movement capable of challenging the injus-tices of capitalist globalization has the potential to emerge. We may even reflect on the possibility that the moment has already arrived.


Notes

1 In the command economy, a danwei or work unit was a place of urban employment that provided a low wage but high levels of nonpecuniary benefits, including subsi-dies for housing, education, medical care, heating, and even haircuts.

2 Processes of informalization such as substituting agency workers for permanent work-ers, outsourcing production and the global supply chain—have been integral to the neoliberal project. This has resulted in (re-)commodifying labor so that it is exposed to the insecurities of the market. In 2002, the ILO responded to the ongoing increase in the size of the global informal sector by renaming it the “informal economy.”

3 Divisions within the working class are certainly not specific to China. However, the somewhat static, patron-client nature of social relations within the danwei system tended to reinforce divisions between and within sectors and enterprises.

4 These dates are approximate. Policy changes and even laws from Beijing take time to filter down to the regions and even then are implemented based on localized “con-crete conditions.”

5 Phone conversation with author, Hong Kong, October 17, 2002. The author’s source wishes to remain anonymous.

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Pringle - Reflections on Labor in China