Labor conflicts and industrial relations in Chinese manufacturing industries

1. Labor conflicts and industrial relations in Chinese manufacturing industries Boy Lüthje Institute of Social Research, Frankfurt (Germany) Visiting professor School of Government International Center for Labor Research Guangzhou (P.R. China) 吕博艺 德国法兰克福社会研究所

3. Outline • Reform of labor policies: a core piece of „harmonious society“ • The growing diversity of labor regimes in Chinese factories • Labor conflicts and social stability

4. 1. Reform of labor policies

5. Management, trade unions and governmentWhere do workers fit in? Source: Chang/Qiao 2009

6. “Fragmented representation” Behind the storefront of centralized labor relations: • Different forms of ownership (SOE, FIE, Joint Ventures, Chinese private and hybrid companies, Overseas Chinese) • New models of production and work • Foreign models of HR management and industrial relations (US, EU, Japan) • Institutional fragmentation of state policies (national and local governments, “disorganized despotism”) • No civil society or “hegemonic state” to mediate conflicts between workers, management and government • The challenge: understanding the relationship between shop-floor conflict/workers’ social movements and institutional change

7. Types of production regimes

8. Distribution of regimes of production Steel State bureaucratic (SOE classic) Chemical State bureaucratic, Corp bureaucratic Corp high performance Auto Corporate bureaucratic IT/electr Corp high performance, flexible mass production, low-wage classic Text/garm Flexible mass production, low wage classic

9. 2. Shop-floor labor relations

10. 5 Core industries Total Employment总就业Non-SOE非国企 Auto 汽车2,57 Mio. 1,61 Chemical 化工3,09 Mio 2,33 Steel 钢铁1,88 Mio. 1,12 Electronics/IT电子信息4,26 Mio. 3,85 Textile/Garment 纺织/服装4,83 Mio. 4,22

11. Example # 1: Corporate bureaucratic • Oldest auto JV in China • Core factory 12.000 employees • Euro-style lean production with less automation • Stable workforce, but massive productivity pressures • 35% productivity increase by modular production 2005-2007 • New high performance factories in greenfield sites

12. Evaluation of Regimes of Production – Draft BL, for comments and suggestions, 06-2009 (cf. Edwards, Gordon/Edwards/Reich) ___________________________________________________________________________ Name of Company, production facility, location „Corporate bureaucratic“

13. Example # 2: Flexible mass production

14. Evaluation of Regimes of Production – Draft BL, for comments and suggestions, 06-2009 (cf. Edwards, Gordon/Edwards/Reich) ___________________________________________________________________________ Name of Company, production facility, location „Flexible mass production“

16. Personalized control Edmond Tang/China Daily

17. Example # 3: Low wage classic„Dragon Cable Assembly“Cable assemblies, chargers etc. for mobile phonesEstabl. 2000 in South China, mother company in Hong Kong„Assembly license firm“ – processing material, import/export through HKThird-tier subcontractor to multinational GPN1200 workers before 2008, now 300Became China registered FEI in 2009No substantial upgrading after global crisis

18. Evaluation of Regimes of Production – Draft BL, for comments and suggestions, 06-2009 (cf. Edwards, Gordon/Edwards/Reich) ___________________________________________________________________________ Name of Company, production facility, location „Low wage classic“

20. 3. Perspectives and problems

21. No New Deal for Chinese Workers • Low base wages and high variable pay (allowance, bonuses, OT) incentive for extensive overtime work • Strong wage hierarchies vs. „equal pay for equal work“ • Almost complete lack of seniority-based workplace regulations • Lack of employee control over speed and intensity of work • High degree of employment flexibility and insecurity (in spite of labor contract law) • China cannot raise domestic demand without stabilizing wages and labor standards under contractual arrangements

22. A regime of underconsumption(Hung 2009)

23. Hard rules, soft rules, no rules Hard Laws Labor contract Govt regulations Work time, OT Collect contract procedures Basic OSH Temp Labor Minimum wage Soft Collective contract content Wage adjustment Wage agreements Payment of bonuses Govt guidelines Benefits Employee consultation No Hourly and monthly wages and salaries Wage system/hierarchy Performance/work intensity Work organization Seniority Collective bargaining and coll labor conflicts

24. Patterns of labor conflict State-bureaucratic Individual bargaining, occasional mass mobilizations over downsizing and plant closures Corporate bureaucratic Limited individual bargaining Individual labor conflicts on pay and job assignment Occasional protest over restructuring Corp high-performance Limited individual bargaining Individual labor conflicts on pay and job assignment Occasional protest over restructuring Flexible mass-production Individual barg. limited by strong workplace control High turnover Individual labor conflicts over pay and OSH, protests and petitions over OSH , „shop-floor riots“, sometimes industry-wide mobilizations and informal bargaining Low wage classic Day-to-day conflicts over workplace discipline Individual and collective labor confl over pay, OSH Occasional mass mobilizations

27. Perspectives of transformation • Continuing weakness of tripartism – no future for liberal corporatism and Euro-style labor relations! • Fragmented representation within models of company paternalism as the dominant pathway (cf. Japan, Singapur, Taiwan) • Further growth of non-union segments in core industries, driven by new production models (e.g. auto industry) • Collective bargaining: developing collective contractual rights at the shop-floor • The law: developing legal standards for collective bargaining, wage categories, flexible pay – based on „right to know“ • Regional contracts and wage regulation in SME-based industries may show a way

28. Chinese trade unions: which side are they on?

29. Thank you ! 非常感谢!