The Korea Herald

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China labor rights lead to strikes for Nike, Wal-Mart

By Korea Herald

Published : May 7, 2014 - 20:27

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The Chinese government is gaining an unlikely ally in its effort to overhaul the economy: Striking Chinese workers.

So far this year, the China operations of International Business Machines Corp., PepsiCo Inc., Wal-Mart Stores Inc., and Yue Yuen Industrial Holdings Ltd., a major supplier to Nike Inc. and Adidas AG, all have been idled by labor protests.

“This is not a blip,” says Dan Harris, a Seattle-based attorney representing companies operating in China. “It’s going to continue and get worse.”

While China’s communist party was founded to benefit the country’s “workers and peasants,” Chinese leaders aren’t known for their patience with protest. This latest wave of labor unrest ― at least when confined to pocketbook concerns ― might be different. The government wants to rebalance the slowing economy to rely more on consumption. Higher incomes for workers would be a good start.

“The government is trying to play a game that uses worker demands to push its broader economic goals,” said Mary Gallagher, director of the Center for Chinese Studies at the University of Michigan. “They have a belief they can use this kind of activism.”

That’s a gamble. Six years after a new labor law gave workers greater rights, Chinese labor remains in a twilight world. While the central government wants workers to see income gains, local Chinese officials ― often promoted based on their ability to maintain stability and generate growth ― usually side with employers in any dispute.

Lin Dong, a volunteer with the Shenzhen Chunfeng Labor Dispute Center, an independent group that trains workers in collective bargaining techniques, was pulled from a hotel dining room on April 13 and forced to leave town by police before he could meet with striking Yue Yuen workers.

“In China, there is a common saying,” says Lin. “The government doesn’t help the people fix their problems. They fix the people who point out the problems, instead.”

A more vocal Chinese labor force could help Chinese President Xi Jinping achieve his economic goals. Wage gains in China’s manufacturing heartland would support the government’s efforts to promote consumption and also encourage some factories to move to the undeveloped interior, Gallagher said.

Chinese leaders in November endorsed weaning the economy from its addiction to investment, which has resulted in overcapacity in industries such as steel and cement. The aim is to have domestic demand “play a greater role in driving economic growth,” Premier Li Keqiang told the Boao Forum April 10. (Bloomberg)