Albion Monitor

Case Study: China

by John Tanner

Stitching shoes 12 hours a day for 75 bucks a month

GUANGDONG, China -- He Sau Yen is 23 years old and stitches sports shoes for a company called Nority in the city of Shenzen. She is paid just 600 yuan ($75) a month for working 12 hours a day, six days a week.

She stitches the uppers of brand names that include the United States corporation Reebok. Sau Yen (not her real name) shares a dormitory room with three other girls. The room is free but she pays about 30 yuan ($3.75) a month for electricity and water.

"It was so boring in my village. I wanted to see what life was like in Shenzen and I wanted to have more money," says Sau Yen. "But working in the factory is not very good because the hours are long and this week I am on the night shift."

Special Economic Zones in China have brought in foreign investors

She has worked for Nority, a Hong Kong based venture in the Guandong province in southern China, for less than six months. Sau Yen comes from a village more than 1,000 miles away in the Sichuan province, where her parents farm an acre of land with her elder sister and younger brother.

Like millions of her generation, Sau Yen has come south to the land of opportunity and factory jobs. Everything, from CD Roms to sports shoes, toys and garments are manufactured here for export to the United States, Europe and Japan.

Since the 1980s, keeping with the economic reform program of paramount leader Deng Xiaoping, the Chinese government has successfully brought in foreign investors and created millions of new jobs in the Special Economic Zone (SEZ).

Between 1985 and 1992, 70 percent of the foreign investment in Guandong came from neighboring Hong Kong. By 1993 the standard of living in the Guandong province, at 4,900 yuan ($613) per person a year, was almost twice that of China as a whole.

"In the early 1980s a lot of Hong Kong manufacturers relocated to Guandong," says Warren Kwok of the Federation of Hong Kong Industries. "Labor costs (in Hong Kong) went up and land costs went up so our manufacturers naturally crossed into China."

Most of the joint venture companies in China carry out "original equipment manufacturing" or OEM. They supply products for brand names in Europe and the United States to specifications laid down by a separate foreign company.

The Hongyun Toys Company, for example, makes plastic dolls for Lucky Industrial Holdings of Hong Kong. Under brand names such as "Fashion Corner" and "Dreamland," the dolls are sold in the United States, Germany and Scandinavia.

The 700 or more workers are paid around 700 yuan ($88 a month) including overtime, and receive subsidized housing. The workers mold the plastic bodies and stitch the doll's hair, which is imported from Japan, into the tiny plastic dolls' heads.

"The labor laws are actually quite good in China," says Gerard Greenfield, an Australian working for the Asia Monitor Resource Center in Hong Kong. "But the implementation is just not happening on the ground."

The new Chinese Labor Law which was passed in July 1994, took effect in January 1995. It says that the working week should not exceed 44 hours and overtime, which must be voluntary, should be no more than another 36 hours a month.

Local districts set their own minimum wages, which in the Shenzhen Special Economic Zone is 380 yuan ($48) a month, not counting overtime. In practice, wages are often below the minimum amount and overtime is effectively compulsory.

Lui Li, 31, came to Shenzhen three years ago from her village of Teng Jia in the Sichuan province. She machine sews dresses for a Hong Kong clothing company seven days a week for 1,000 yuan ($125) a month, working up to 11 hours a day.

Lui Li's husband also works in a factory in Shenzen but their ten-year-old daughter lives with her grandma in Teng Jia. "Of course I miss my little girl but we have to live and there is no work in the village," says Lui Li.

After she has paid about 300 yuan ($38) for food each month and sent money back to the family in Sichuan, there is little left over. With her husband, she hopes to save enough to return to Teng Jia to live with their daughter again.

With such long working hours it is not surprising that there are safety problems at some Chinese factories. In January, there was a fire at a Christmas ornament factory in Shenzhen which killed 20 people and injured another 89.

Workers who try to organize unions can be charged with subversion and sentenced to death

Trade union organizations, other than the official Communist Party trade union, are banned in China. Workers who try to organize independent trade unions can be charged with subversion and sentenced to death.

Even so the official All China Federation of Trade Unions (ACFTU) reports a sharp increase in labor disputes. There were 150,000 labor disputes in China in 1995, double the number two years before, and the number is still rising.

Recently, some foreign companies have drawn up codes of conduct which they are seeking to impose on their Chinese suppliers. Reebok, the sports shoe company, has its "Human Rights Production Standard" which is intended to guide its suppliers.

The Reebok standard speaks of "the rights of all employees to organize and bargain collectively," which is hard to achieve in China. The standard also opposes "compulsory labor" but it is not clear whether this includes compulsory overtime.

The Hong Kong Toy Council is drawing up its code of conduct for the industry which could be approved in December. "But monitoring of the code would be very difficult, if not impossible because of commercial confidentiality," says Warren Kwok.

"Without monitoring, the codes stand no chance of raising the standards in Chinese factories," says Gerard Greenfield. The only hope he says is giving Chinese workers more information about their rights and about health and safety.

The concerns of Sau Yen in her shoe factory and Lui Li in the garment factory are more immediate. For them and millions of others, even rock bottom wages and long hours provide opportunities that are simply not available in rural China.

© 1996, InterPress Third World News Agency (IPS)

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