Made in China

Chinese workers expected to shoulder burdens of free trade.

By Julie Chao
Sunday, July 7, 2002

DONGGUAN, China -- Song Zhifang, a skinny 20-year-old, had high hopes when he left his village two years ago and trekked 900 miles south to Dongguan in search of work.

He found employment in the factory of a Hong Kong-based company that makes plastic toys for American companies such as Fisher-Price and McDonald's.

"Everyone told me I would get rich down south," he said, crouched one evening atop a dilapidated pool table on a dirt lot across the street from the factory, "but I discovered all I'm doing here is suffering."

Zhao Fangta wanted to finish high school and study law, but her parents couldn't afford the school fees beyond junior high, so at 16, she, too, headed south from her village in Sichuan province. She found a factory job in Dongguan, then quit it because the pay was too low and production quotas were impossible to meet.

Then she found a slightly better job making $1.20 a day assembling stereo speakers.

"It's like being locked up in a jail," said Zhao, now 17. "As soon as we punch the clock we can't speak."

Song and Zhao and millions of young people like them are China's most abundant natural resource: cheap labor.

They have helped turn Dongguan into one of this country's economic success stories, a manufacturing and export powerhouse. Mostly farmland just two decades ago, it is now a densely packed warren of two- and three-story factories that churned out $15.8 billion in goods last year -- Reebok shoes, AT&T telephones, Disney toys. The city is China's third-largest exporter, behind only Shenzhen and Shanghai.

After two decades of market reforms, millions of Chinese have been lifted from poverty and millions more have gotten rich or are living a comfortable middle-class dream. Yet those same market forces are driving untold numbers off the farms and into the cities to work for measly pay under miserable conditions. And with the added competitive pressures brought by China's entry into the World Trade Organization -- a move that has forced bloated state-owned industries to slash expenses, reduce the number of workers and boost efficiency -- the situation is expected to worsen.

"In the migrant worker areas in south China, along the coast, I don't see the conditions getting better, only worse," said Anita Chan, a senior research fellow at Australian National University who specializes in labor issues in China. "This has to do with the fact that the WTO means freer trade will lead to more intensive competition among the developing countries to lower wages. The international pressure to keep wages low is just too great."

China does not want to see jobs and investment dollars go to competing Asian countries such as Vietnam and Indonesia. When it comes to enforcing overtime and minimum-wage standards, safety regulations and a host of other worker-related laws, local labor bureaus usually look the other way.

"Because China wants to attract foreign investment, it offers favorable policies," said Li Qiang, a former factory worker who runs China Labor Watch, a New York-based group with a network of activists in China. "The most favorable policy is low wages. They sacrifice workers to attract investors."

Factories pay as little as 12 cents an hour, even though, by law, minimum wage in Dongguan is 33 cents per hour. The pressure is so great that some factories can even get away with not paying workers at all. Back wages may accumulate for as long as a year or owners may skip town when orders are canceled.

Surplus of labor

And yet the workers keep coming. It's a measure of the hopelessness in the countryside.

They are part of what has been called one of the largest migrations in history: A "floating" population of an estimated 100 million people -- five times the population of Texas -- has left rural China in search of jobs. These migrant laborers have built the shiny new office towers of Beijing and Shanghai. They staff the restaurants, clean the homes and watch the children for the newly moneyed, and make the clothes, toys, shoes and electronic goods that fill American store shelves.

China estimates that more than one-third of its 482 million rural workers -- 65 percent of the country's total workforce -- is "surplus." That means as many as 170 million people are idle and presumably looking for work.

As low-priced grains and other agricultural imports start to fill China's markets under the WTO, farmers will be squeezed even more, and ever greater numbers will be forced to look for non-farming work. Yet their job prospects are dim. Fewer than 10 percent of rural workers have finished high school, and nearly one-third have not gone beyond elementary school. The number of surplus rural laborers is expected to grow by 8 million a year for the next five years.

With this seemingly endless supply of labor, Dongguan is set to keep on expanding. The city has announced plans to build a high-tech research and manufacturing center that aims to double the city's industrial output.

Situated at the southern tip of Guangdong province just north of Shenzhen, Dongguan's official population is 1.5 million, but another 6 million from outside the city live and work here. It is home to 13,800 firms, most of them backed by Hong Kong and Taiwan investors.

American consumer goods manufactured here are supplied by contract or subcontract. Thus American companies are not bound by Chinese or U.S. labor laws.

The urban landscape in Dongguan is depressingly monotonous. Mile after mile of low-slung factories are interrupted only by multi-story dormitory buildings whose balconies are crammed with hanging laundry, mostly the blue uniforms of factory workers.

The factory bosses can escape by playing golf, shopping at the Volvo or Fiat dealerships or heading home to their gated villas with Romanesque statues and uniformed security personnel.

Urban poverty grows

Competing with migrant workers from the countryside are displaced workers from China's old state-owned enterprises. Some of these workers -- disgruntled and frustrated -- have staged protests the past few months. They've blocked traffic, shut down production and risked arrest. But experts say there is little chance of an organized labor movement starting anytime soon in China. It's not just repression that's stopping workers from forming unions; they lack the vision to unify their disparate causes.

In Daqing, a gritty city 700 miles northeast of Beijing, workers of the Number Two Construction Company haven't been paid in four years. They weren't fired or laid off or otherwise made eligible for any state benefits. They were simply told not to come to work because there was no money to pay them. They obstructed a railway in protest, but virtually nothing came of it.

Across town, thousands of workers at the Daqing Petroleum Administration have been holding a sit-in for months to protest a buy-out package they say is unfair and leaves them with little for their future. Their rage is compounded by what they see as blatant corruption -- managers are thriving while the underlings suffer. They vow to demonstrate until their demands are met.

These two groups of workers, living in the same city, are victims of the same painful economic restructuring brought about by China's entry into the World Trade Organization. They are driven by the same outrage at official malfeasance. Yet they barely know of each other's existence.

"Workers must be organized in order to develop their class consciousness," said Chen Feng, a professor at Hong Kong Baptist University who studies labor issues. "Relying on workers to sympathize spontaneously would be difficult. Workers won't see the class interest by themselves; they only see personal interest."

To workers in Daqing, the bad guys are the local officials or bosses, not the central policies that allow those officials to get away with withholding paychecks or possibly even lining their own pockets.

"Their only demand is to have enough to eat," Chen said.

The lack of political freedoms, the absence of a free press and arrests of anyone who organizes a protest or dares speak out on behalf of workers make it nearly impossible to spark a broader labor movement. Paltry payouts -- in the case of the Daqing construction company, a $30 holiday bonus -- usually are enough to get most protesters to go home.

As government-run enterprises lose subsidies and become responsible for their own profits, a generation of low-skilled, middle-aged workers struggles. Many of the unpaid employees of the construction company in Daqing have resorted to selling vegetables and grains at the street market. If they're lucky, they eat meat a couple of times a year. Many survive mainly on rice, noodles and other staples.

They're part of a new phenomenon in modern China -- urban poverty. According to the official Xinhua News Agency, more than 5 million urban dwellers make less than $18 a month. Workers who were told at the beginning of their careers that they were "masters of the state" and would eat from the "iron rice bowl" for life now scrape to get by.

Laboring in the dark

Awareness of worker rights among migrant laborers is low. Zhao and others interviewed had not heard of a minimum-wage standard.

Accidents and injuries are widespread. Reports of abuse, sexual harassment and deadly fires are not uncommon.

Zhang Qi, a 21-year-old whose parents in rural Guizhou province ran out of money after his first year of high school, sprays paint on plastic telephones and makes at most $60 a month. He's gotten used to the rules: He's fined if he's late, fined if he doesn't finish his meals and will be fired immediately if managers catch him with a girlfriend. And he's aware his painting job is affecting his health, that the thin cloth mask he wears does little to protect him from the fumes. He often gets dizzy spells, but he keeps working because he wants to save up more money.

"Complaining is no use," he said. "If you complain to the boss, they just axe you."

Zhang starts work at 8 in the morning, gets breaks for lunch and dinner, then continues to work from 7 in the evening until late at night. Sometimes, his work days stretch to 16 hours. "We have no idea what time we'll get off. It's until whenever they say," he said.

Workers go back to dorm rooms shared with 10 to 15 others, though some rooms sleep as many as 24. Zhao, the 17-year-old who assembles stereo speakers, lives on the fifth floor of a building where the water stops on the third or fourth floor.

The poor living conditions mirror the poor working conditions.

"The boss is so cheap," complained Li Yuanyuan, who assembles stereo speakers with Zhao. "It's so hot, but he never turns on the air-conditioning. It's really miserable inside."

At the Merton Company, the toy contractor where Song works, turnover among the 11,000 workers is high. Workers say they're forced to put in overtime on many Sundays. If they refuse, they're docked a day's pay.

Even though Song, one of the few workers who finished high school, is a low-level manager, he plans to leave soon. "I think I'll go home," he said. "It'll be better than here."

But conditions cannot keep declining indefinitely, says Han Dongfang, a Hong Kong-based labor activist.

"When things get worse and approach the limits, you will get people fighting back," he said.