Strike in China: A new phenomenon

A strike at an enormous Honda transmission factory southeastern China has suddenly and unexpectedly turned into a symbol of this nation’s struggle with income inequality, rising inflation and soaring property prices that have put home ownership beyond the reach of all but the most affluent.

And perhaps most remarkably, Chinese authorities let the strike happen — up to a point. The new permissiveness, however temporary, coincides with growing sentiment among some officials and economists that Chinese workers deserve higher wages for their role in the country’s global export machine. And without higher incomes, hundreds of millions of Chinese will be unable to play their part in the domestic consumer spending boom on which this nation hopes to base its next round of economic growth.

“This is all because there is a major political debate going on about how to deal with the nation’s growing income gap, and the need to do something about wages,” said Baker & McKenzie lawyer Andreas Lauffs. If wages do rise, that could bring higher prices for Western consumers for goods as diverse as toys at Wal-Mart and iPads from Apple. The Chinese media may also have found it a little easier, politically, to cover this strike because Honda is a Japanese company, and anti-Japanese sentiment still simmers in China as a legacy of World War II. Certainly, the strike is hitting Honda hard, as the resulting shortage of transmissions and other engine parts has forced the company to halt production at all four of its assembly plants in China.

Honda has an annual capacity of 650,000 cars and minivans in China, like Jazz subcompacts for export to Europe and Accord sedans for the Chinese market. Because Honda’s prices in China are similar to what it charges in the US, the cars tend to be far out of reach financially for most of the workers who make them.

The intense media coverage may evoke historical memories of the 1980 shipyard strike in Gdansk, Poland, that gave rise to the Solidarity movement and paved the way for the fall of Communism in Eastern Europe. But the reality here is much different.

Instead of tens of thousands of grizzled and angry shipyard workers, the Honda strike involves about 1,900 mostly cheerful young people. And the employees interviewed say their goal is more money, not a larger political agenda.

Many workers at other factories in southeastern China already earn $300 a month, but they do so only through considerable overtime. And even that higher income is not enough to embark on the middle-class dream in China of owning a small apartment and subcompact car. Officially, though, the government is discouraging heavy reliance on overtime, and workers here said that Honda was not assigning much.

The profile of striking workers seems to run more along the lines of slightly bookish would-be engineers — perhaps without the grades or money to attend college — rather than political activists. Besides their low wages, the workers seem focused on issues like the factory’s air-conditioning not being cool enough, and the unfairness of the work timings.

Workers said that in addition to their pay, they also received free lodging in rooms that slept four to six in bunk beds. They also get free lunches, subsidised breakfasts for the equivalent of 30 cents and dinners for about $1.50. The striking employees said that some senior workers, known as team leaders, had allied themselves with management. But they insisted that the rank-and-file workers were solidly in favor of walkout — a claim impossible to verify.

Although China is run by the Communist Party and has state-controlled unions, the unions are largely charged with overseeing workers, not bargaining for higher wages or pressing for improved labor conditions. And they are not allowed to strike, although China’s laws do not have explicit prohibitions against doing so.

Workers at the Honda factory dormitory said that the official union at the factory was not representing them but was serving as an intermediary between them and management. The unusually permissive approach of the authorities toward media coverage of the strike follows a decision to tolerate extensive coverage this month of suicides by workers at the Taiwanese-owned Foxconn factory complex in nearby Shenzhen that supplies Apple and HP.

China Institute of Industrial Relations Associate Director of the department of employment relations Zheng Qiao, said the strike was a significant development in China’s labor relations history and that “such a large-scale, organised strike will force China’s labour union system to change, to adapt to the market economy.”