Times are changing for China’s labor movement

This is Part 2 of a 2-part series based on a conversation with An Jianhua, international Secretary of the All-China Federation of Trade Unions, May 29, 2018. Part 1 can be read here.

BEIJING— It’s been a steep learning curve for Chinese unions these last forty years. The program of economic reforms initiated in 1978 has brought an influx of foreign capital and facilitated the expansion of mass production facilities in special economic zones that cater to international investment. But after 40 years of economic reforms and the government’s pursuit of what it calls a socialist market economy, Chinese workers have experienced an unprecedented rise in general living standards, though the growth has been uneven.

Wages across the country, while still low by U.S. standards, have risen for factory workers by 64 percent since 2011 and are now on par with workers in Portugal and South Africa.

Labor unrest has also been growing alongside the economic indicators, however, especially since the late 1990s. The country adopted an updated labor code in 2004 in response to a labor surplus, an epidemic of bad working conditions, and low wages. But even that hasn’t guaranteed an end to worker activism. In 2006, the All-China Federation of Trade Unions—China’s largest labor body—organized Walmart stores, and in 2016, strike waves hit the service and transport sectors.

According to An Jianhua, international secretary of the ACFTU, the labor movement is aware of what they are up against with foreign corporations. Chinese workers must fight constant violations of labor law by capitalist corporations that, even under a nominally socialist system, still seek maximum profits. Some of the biggest problems faced are migrant workers’ wages that go unpaid and underpayment for overtime work.

The latest revelations (reported after our visit) are a case in point: Foxconn, the Taiwanese tech manufacturing firm notorious for the bad labor conditions in its Chinese factories, is once again short-changing Chinese workers by paying temporary workers less and violating Chinese labor law by misclassifying workers.

Workers are more assertive than ever, joining the ACFTU in growing numbers and increasing their level of strike activity, much of it against transnational corporations and much of it legally unauthorized. This has included at least four nationwide strikes in the last two months over higher wages and labor law violations.

Is there a right to strike in China?

According to An, China’s 1954 constitution protected the right to strike, but this clause was removed when the economic reforms began. As it stands now, things are a bit gray legally. There is no provision for or against work stoppages, but carrying out a strike is not technically forbidden.

But while workers are striking quite regularly across the country, An and the ACFTU don’t see the strike tactic as necessarily the smartest one, given the conditions of China’s labor market.

“In China, we don’t believe a strike is an efficient way to protect the interests of the working class,” An argued. At the global level, “China is facing contradictions between the domestic working class and domestic capitalists, but domestic capitalists also compete with foreign capitalists. So if there is a strike, it will be detrimental to both the workers and capitalists [in China].”

Referencing Karl Marx’s writing on the “reserve army of unemployed,” An said, “China has a huge population, so striking will not help because [there are plenty] of people in labor to substitute.” Marx wrote that capitalists rely on there being more workers than there are jobs in order to keep wages as low as possible through labor competition.

Instead of strikes, the ACFTU prefers to resolve labor disputes through consultation, arbitration, or legal action. In China’s legal system, the country’s legislature (the National People’s Congress) and the judiciary can also formulate laws and instruct local governments in case of a strike.

If workers choose to pursue a legal solution, they can go to court at the grassroots level with a civil case or through a court focused on labor issues. One situation involving workers demanding a shortened work schedule recently went to trial, and the court reportedly ruled in favor of the workers.

Generally, workers’ rights are subsumed within the overall priority of economic development. Being at the mercy of the global economy and transnational corporations’ investment decisions means the country is in an objectively weaker position, for the moment, as it pursues development.

Relationship between the unions and the Communist Party

After its founding in 1921, the Communist Party of China (CPC) made building the labor movement a top priority, leading to the establishment of China’s trade unions and the ACFTU in 1925.

The ACFTU played a key role during China’s civil war, in the fight to liberate the country from Japanese occupation, and in establishing a socialist government in 1949. The first laws adopted by the new People’s Republic of China were on marriage and trade unions.

During the destructive Cultural Revolution of the 1960s and ’70s, the ACFTU was dissolved. It was reconstituted with the inauguration of reforms by the party leadership under Deng Xiaoping in 1978. It’s been engaged in an uphill battle ever since as it charts out how to deal with transnational corporations moving into China.

“Trade unions serve as a bridge as well as a bond between the people and the 86-million-member CPC,” said An. Unions are an institutional pillar of the political system and, at same time, are meant to serve the interests of the mass of people, especially the working class.

The relationship between ACFTU and CPC has caused trade union federations in some other countries to reject formal ties with the ACFTU. Because the CPC is the governing party, they insist China’s labor movement is therefore not authentic or independent. This stance reflects lingering influences of anti-communism, though, and doesn’t recognize the role Communists have played in China’s labor movement throughout its history.

In China, the policy is to organize under one trade union federation. Trade union federations in some capitalist countries charge that this reflects restrictions on the freedom of the working class, but ACFTU maintains that organizing under one federation is more efficient than organizing separately. This is certainly something most labor activists in the U.S. would agree with.

Relationship with the global and U.S. labor movement

The ACFTU is a member of the International Labor Organization (ILO) governing board and has friendly relations with 400 counterparts around the world.

An said the ACFTU enjoys a high level of communication and exchange with the U.S. labor movement, which included a visit by AFL-CIO President Richard Trumka in 2013, the first time such a visit had occurred.

ACFTU solidarity unfolds in a highly globalized and interdependent world where transnational corporations are constantly in search of low wage zones. ACFTU insists Chinese workers are not to blame for the flight of capital from the U.S. Rather, blame lies with corporate greed and U.S. governmental policies that encourage offshoring of jobs and refuse to invest in modern infrastructure or develop domestic manufacturing.

As wages of China’s workers rise and the country pursues stricter enforcement of workplace health and safety and environmental protections, transnational corporations are leaving. They are taking their operations to developing countries like Vietnam, Malaysia, and others in search of greater profits. It is no longer the case that China is the world’s low wage sweatshop—labor costs are now only 4 percent cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics.

The principles of the Chinese government’s foreign policy are based on the slogan “building a community for a shared future.” Globalization and interdependence are only going to increase, and the Chinese believe this calls for raising the level of international cooperation on economic development; the development of global standards for wages, health, safety, and environmental protection; and to solve crises like climate change and poverty.

No country can solve problems in isolation, the government says, and cooperation—including in trade—can be a win-win for all. In practice, this means working out trading partnerships and development projects that benefit all countries involved.

Recent moves by the Trump administration to start a trade war with China and impose tariffs on steel and aluminum imports have strained relations between both countries and their labor movements. The AFL-CIO, for instance, supported Trump’s tariffs against China. But even Trumka recently acknowledged that Trump’s measures won’t “boost manufacturing, stop outsourcing, or raise wages.”

Trump and many in the U.S. labor movement accuse China of currency manipulation and “dumping” cheap steel on the global market. China is addressing its overcapacity in steel production, which some attribute to the drop in demand after the 2008 global recession, by closing plants with outdated technology. Ahead of schedule, it already accomplished its goal of reducing steel output by 150 million tons a year by 2020.

As for accusations of intellectual property theft from U.S. companies by China, An says China operates under the guidance of the World Trade Organization, “so accusations of forcing U.S. corporations to shift their technology to us are false.”

And even though Trump’s trade war talk is hot right now, restrictions on the Chinese economy are nothing new. “Naturally China wants to buy more goods from the U.S.,” said An. “But it’s not just soybeans we want. We would like to buy high technology, but those are the goods that are denied. The People’s Republic has been blocked by the Western powers for 40 years in terms of foreign trade. We overcame it, and now the U.S. is doing the same thing.”

The dissemination of technology, An said, “is a historical must in the process of development. Technological development is in the interest of the global economy and that has nothing to do with intellectual property rights.”

He argued that “all Chinese workers want is for transnational corporations to respect our laws.” And in return, he said, “we insist Chinese-owned corporations respect the labor laws of countries where they operate.” ACFTU is more than willing to engage in solidarity with the U.S. labor movement against corporations that operate in both countries, An insisted.

“Recently some Chinese state-owned companies in the vehicle manufacturing industry were signing contracts with American companies to build a subway and high-speed train,” he recounted. “We were welcomed to come to the U.S. to help them sign contracts.”

In 2013, a Chinese company, WH Group, bought the U.S.-based Smithfield Foods. Concerned about union recognition by the new owners, UFCW president Joe Hansen went to China and met with the ACFTU. The WH Group recognized the union and added 38,000 jobs.

Though Trump’s trade war just forced ACFTU to cancel a planned visit to the U.S., An pledged it is the federation’s “sincere hope to develop good relations and have more communications with our U.S. counterparts.”

Carol Widom and John Bachtell represented the Communist Party USA at a celebration for the 200th anniversary of Karl Marx’s birth hosted by the Communist Party of China on May 28 in Shenzhen. They toured the country afterward with representatives of other Communist and Socialist parties.