Global corporations moved to China for one simple reason – a plentiful supply of labour, low wages, a compliant government and few, if any, health and safety restrictions. Super-exploitation has produced a growing wave of anger and militancy. Now the same corporations are lobbying hard against a decision by the Chinese government to respond to this unrest by introducing modest labour reforms.
The proposed legislation will not provide Chinese workers with the right to independent trade unions and the right to strike. But even so, foreign corporations are threatening to withdraw investment if the laws, that deal mainly with contracts and health and safety, go through. This campaign is promoted publicly by three major organisations representing foreign corporations operating in China: the American Chamber of Commerce (ACC) in Shanghai, which represents over 1,300 corporations, the US-China Business Council, which represents 250 US companies and the European Union Chamber of Commerce in China, which has more than 860 members.
ACC comments on the draft legislation warn that the law may "reduce employment opportunities for PRC [People’s Republic of China] workers" and "negatively impact the PRCs competitiveness and appeal as a destination for foreign investment". ACC goes on to criticise the proposed changes in the law for making it harder to fire workers and for "rigid" restrictions on "business administration of enterprises." It concludes: "We doubt whether it is necessary to carry out such significant changes." Dr Keyong Wu, on behalf of the British Chambers of Commerce, warned: "Business is attracted to China not only because of its labour costs but also because of its efficiency. If regulation starts to affect that and flexibility, then companies could turn to India, Pakistan and South-East Asia."
Just what the corporations are trying to defend is outlined in an excellent report published this week by Global Labor Strategies, an American research organisation, which exposes the campaign to block the new law. "Foreign corporations want to maintain the current system which creates a large underclass of highly precarious workers with no rights," says GLS. The report adds: "Despite extraordinary economic growth most Chinese workers live on the edge of poverty. They earn little and often work under abysmal conditions. Most lack basic rights or access to those rights. About 150 million Chinese urban and rural workers are unemployed — more than the entire workforce of the US. China abandoned its so-call ‘iron rice bowl’ cradle-to-grave social security system in the 1980s when it ended traditional central planning and embarked on its wide open, laissez-faire, development model. During the 1990s state enterprises were closed, private enterprises mushroomed, foreign investment skyrocketed and workers were left to fend for themselves." Labour contracts are supposed to stipulate wages, basic terms of employment, and the duration of employment. The report adds: "The reality is that many workers lack contracts and basic protections. Seventy per cent of all rural workers and about 15% of urban workers do not have a contract which means they can not access even minimal rights or benefits. In China’s booming construction industry 40% of all workers have no contract."
And that’s the way it will stay if the global corporations get their way.
Paul Feldman, communications editor