Mainland News Weekly Analyzes Reasons for Worker Unrest at Stella Shoe Factories

The mainland Chinese news media is becoming increasingly active in covering the controversial issue of worker unrest and labour disputes in China today. One recent example of this was an unusually forthright article titled "An Analysis of the Labour Unrest at Xing Ang Shoe Factory" published on 25 October by China News Weekly (Zhongguo Xinwen Zhoukan), a magazine run by the semi-official China News Service. While basically conveying the official government line on the incident, the article nonetheless also gave a fairly bold and independent analysis of the underlying social and economic reasons for the mass workers' protests that occurred at several of the shoe factories owned by Taiwanese-owned Stella International Ltd in Dongguan City, Guangdong Province in early 2004. In October and November, ten Stella workers were sentenced to prison terms of up to three and a half years for their alleged involvement in two of these protests in late April.

While repeating the state prosecutor’s allegation that the Xing Ang Shoe Factory workers engaged in "intentional destruction of property", the China News Weekly article also highlighted the defense lawyer’s argument that the prosecuting authorities had failed to prove that the workers' action was in any way “planned, organized or led by anybody." The article also quotes a Guangdong labour expert as saying that "workers should be allowed to organize themselves and to have a legal channel to express their grievances" – a proposal that chimes closely with China Labour Bulletin's long-standing recommendation that Chinese workers should be allowed to establish free and independent trade unions.

Below is China Labour Bulletin's translation of the complete article.

An Analysis of the Labour Unrest at Xing Ang Shoe Factory

China News Weekly (Zhongguo Xinwen Zhoukan)

25 October 2004

This year, labour disputes and conflicts have become a common occurrence in the Pearl River Delta as migrant workers, lacking regular legal channels of complaint, seek more assertive means to express their dissatisfaction. These conflicts have wide repercussions, and ultimately not only the workers, but also the employers, the government and society end up as the losers.

At 10A.M. on 25 August 2004, in Dalang [Public Security Bureau] Sub-station, Dongguan Number Two Detention Centre, Guangdong Province, Chen Lin (alias), a skinny teenager, and her four male colleagues stood in the defendants’ dock in a temporary courtroom.

A year before, Chen, now 16, used a false identity card to enter Xing Ang Shoe Factory, a branch factory in Dongguan owned by Taiwan’s Stella International Limited. Given her young age, the trial was held behind closed doors.

Among the defendants, Chen Nanliu is the eldest, although he is only 23. All of those involved in the labour dispute, or so called "riot", are being collectively tried on criminal charges of "intentional destruction of property", which could result in prison sentences of three to seven years. Lawyer Gao Zhisheng and five other lawyers – all from Beijing’s Shengzhi Law Firm – defended the five workers.

Five workers from another Stella-owned factory, Xing Xiong Shoe Factory, including a boy under 18, were tried separately for another "riot".

Between March and April 2004, labour disputes involving several thousand workers took place in four out of the five shoe factories owned by Stella International, which has more than 30,000 employees.

Chaos After Pay Cuts

On the evening of Friday 24 September, night had fallen in Xiaobian village, Changan County, in Dongguan City, but the light was still on at Xing Ang Factory At 8:30 P.M., machines slow down and a mass of workers in yellow uniforms pour out of the factory and are herded into the dormitories. It’s lights off at 11 p.m.

A typical schedule for a Xing Ang worker: Working hours from 7:30 A.M. to 8:30 P.M., with two mealtime breaks totalling one hour 45 minutes, 6 days a week.

However, at 11:30 P.M. on 23 April, the noise outside the dormitory made sleep impossible for Chen Nanliu.

Xing Ang Shoe Factory hires some 3,000 workers and 80 percent of them live in the factory dormitory. That night, they were too angry to sleep.

It was wage day. Most of the workers had learned that their wages for the month had been cut by 50 to 100 Yuan. The news provoked a reaction. From the dormitory, workers shouted "Increase our wages and improve our meals!" and threw washbasins, cups, shoes, anything, to create more noise. An eyewitness recalled: "The girls' screaming was really loud." 70 percent of the employees were women and they "scolded the boys for being too cowardly to protest, as those in the Xing Xiong Factory had done."

Workers in the Xing Xiong Factory also staged a wage-cut protest on 21 April. After learning that their wages had been cut, more than a thousand workers broke factory machines, overturned vehicles and telephone booths and injured a manager. The factory reported a loss of 135,008 Yuan.

The girls goaded the boys into taking action. They went downstairs and met in the common area.

Chen Nanliu recalled that as he joined other workers walking towards the factory he became quite emotional. Having worked as a chopper for two years, he took the chopping tool and smashed things in the workshop and dormitory and the windows of vehicles. He and fellow workers overturned a vehicle and broke into the factory store and took six bottles of water and two packets of cigarettes.[1]


According to the prosecution, workers broke into the factory workshop and office and destroyed machines, computers and office equipment. They let off fire extinguishers, broke glass in the factory, canteen, and notice board, stole food from the store, and overturned vehicles.

Anti-riot police officers and some 30 security officers from the factory couldn’t stop the workers. They continued for three hours before becoming exhausted and returning to the dormitory. The factory management reported that the protest cost them 153,534 Yuan.

Who are the instigators?

After the protests, police interrogated more than 100 workers from the two factories who had been recognized in the video recording of the protests. Their involvement was corroborated by the testimony of security guards and information provided by other workers. The factories then posted a notice, warning that workers who withheld information about the rioters would be punished.

At the same time, Xing Ang Factory fired 23 workers and it was said that Xing Xiong fired even more. An informant estimated that about 1,000 workers from the Stella factories have either been fired or have quit their jobs.

After a series of interrogations, workers were detained for "assembling to disturb public order" and ten of them were eventually charged with "intentional destruction of property".

The prosecution accused the ten workers of "instigating the riot and inducing other workers to take part in the protests…leading to the workers' collective action in causing different degrees of destruction to factory properties."

Lawyer Gao Zhisheng, whose law firm is defending some of the accused workers, conceded that if the prosecution’s allegation against the defendants was proved to be true, they would have to be held accountable for the incident. However, the defense lawyers argued that the workers’ action was spontaneous and that the prosecution had no evidence to prove that the workers' action was planned, organized or led by anybody. "The accused did not instigate the protest", lawyer Tang Jingling from Guangdong maintained.

Lawyer Gao argued that each defendant should only be held responsible for his/her own actions rather than for the collective action. Individually, their actions did not warrant even a minimum prison sentence.

The incidents at Xing Ang and Xing Xiong factories were a continuation of the protests which occurred in the two other Stella factories a month earlier. Some managers and workers later admitted to the police that the protests at Xing Ang and Xing Xiong could have been anticipated and avoided.

Causes of the Unrest

Wages and working hours are the common ground for the protests in the four factories. For a long time, Stella International Limited has required its workers to work 10 hours a day, six days a week.

Usually, a worker earns 450 Yuan per month, which by law is the minimum wage for a 40 hour week. It is also the legal minimum wage in Dongguan City.

After paying for meals - 150 Yuan, and accommodation - 48 Yuan, 252 Yuan are left for personal expenses. In order to earn more, workers have no choice but to work overtime. By law, overtime pay should be 150 percent of the original hourly rate for weekdays, and 200 percent for weekends. So a 60-hour week should bring in 700 Yuan or more.

However, following the global trend embodied by the Corporate Social Responsibility movement, brands such as Nike and Reebok have repeatedly demanded that the Stella factories reduce working hours. Nike has even demanded that overtime should be limited to 36 hours per month.

Under tremendous pressure from its clients, Stella increased workers’ days off from four to six per month. "We want workers to be more relaxed", said Que Ruxin, manager of Stella International’s Corporate Social Responsibility Department.

However, in order to avoid paying the price in reduced production, the factory management promised that wages would remain unchanged as long as workers produced the same amount of goods as before the change.

In fact, workers’ wages were on average reduced by 100 Yuan a month. Factory management claimed that it was because they were not efficient enough. Yet workers said the total production had not dropped. They were upset by the decrease as 100 Yuan was equal to two weekends’ overtime work.

"We failed to realize that 100 Yuan is a significant amount to workers", Mr Que confessed. For migrant workers, making money is the only reason they are in Dongguan, an alien place far from home.

On 19 March, the day when workers of Xing Lai and Xing Peng – the two other Stella factories in Dongguan – were to receive their wages, a protest broke out when workers found that their wages had been cut. This protest was to have a different consequence from the other two.

That night, several hundred workers – some say 2,000 – who had taken part in the protest, sent representatives to negotiate with the factory management, who then agreed to increase their wages, improve the food in the factory canteen and forbid any physical attacks on the workers. The incident ended without police involvement, and no worker was punished.

This success encouraged the workers of the Xing Ang and Xing Xiong factories. However, they did not know that the Stella management had decided to stand firm this time. When they staged their protests a month later, in April, the response of the management was heavy-handed.

A staff member of a Guangzhou-based NGO observed that although brands like Nike and Reebok did not want to be linked with labour disputes and had jointly imposed pressure on the Stella management, they did not seem to reduce or cancel their orders after the protests had occurred.

This pressure seemed to have prompted the Stella management to make some improvement, Mr Que said. Workers were allowed to set up a cooperative group to facilitate better communication with the management and their income had returned to the original level.

A Xing Ang worker confirmed that Mr Que’s words were partly true, as workers were again required to work 60 hours a week.

Labour Relations in Danger

The conflict between the brand companies’ request for a reduction in working hours and the workers’ demand to have the option of working overtime became a major factor in causing the unrest. Stella faced the dilemma of who to satisfy, the brand companies or the workers. At least that was the view of the person-in-charge of the Taiwan Businessmen Association in Dongguan. Yet, is it as simple as that?

Stella International started with some 1,000 workers when it first moved to Dongguan from Taiwan in 1991. Now, in 2004, it hires 35,000 workers and produces more than 30 million pairs of shoes for brands like Reebok, Nike, Timberland, Clarks and New Balance, worth a total of 3 billion Yuan.

A labour researcher has pointed out that the working and living conditions at the Stella factories is slightly above average when compared with other factories in Dongguan. For instance, each worker is given two apples a week which costs the company about 320,000 Yuan per month.

Thus the shoe industry in Dongguan was shocked that protests happened at the Xing Ang factory. Yet a labour expert in Shenzhen commented that the Xing Ang workers’ protest was to be expected as labour relations in the Pearl River Delta have become more tense.

A report issued recently by the Ministry of Labour and Social Security (MOLSS) reveals that migrant workers in the Pearl River Delta have received a wage increase of only 68 Yuan per month in the last 12 years. (A Xing Ang worker said workers’ minimum wage has increased from 350 Yuan to 450 Yuan since he entered the factory seven years ago.) Over the same period of time, one catty [around 1 lb.] of rice or pork has more than tripled in price and civil servants are earning five times more than they did. The GDP of Dongguan has been increasing by 20 percent annually. In comparison, migrant workers' wages "in fact remain stagnant or have even decreased", the report said.

The working and living conditions of migrant workers also lag behind, although they are improving. For years, migrant workers have been marginalized, or even seen as a social problem.

More than 2,000 migrant workers live in each square kilometre of Dongguan. They are treated as machines to generate profit and better GDP rather than as citizens. A Dongguan journalist described them as "having no careers, no family, no life and no future."

Labour disputes also stem from the nature of the economic model in Dongguan and even to that of the whole of Pearl River Delta. Dongguan increases its wealth at the expense of the migrant workers who arrive in a continuous flow. Many factories producing high technology goods employ unskilled workers at low rates of pay. The same report from MOLSS says: "Manufacturers are trying to attain the highest possible profit margins at the expense of workers’ wages and living conditions."

Resentment towards this long-term exploitation is surfacing, and the relationship between workers, employers and the government has turned sour. "They [the workers] want to take revenge", a labour researcher said.

He further explained that workers who took part in the protests in Xing Ang and Xing Xiong factories did not have any leaders, representatives, organization or concrete demands. It seemed that the protests were a spontaneous expression of discontent.

"It was a collective and spontaneous release [of anger]," the researcher concluded, the use of an opportunity to take revenge after long-term suppression.

In Lawyer Gao’s defense statement, he also pointed out that the root of the workers' "inappropriate collective action" was in fact fear for their own survival prompted by wage deduction, unfair and unequal relations between employers and workers, lack of channels to resolve labour disputes, and the absence of any functioning judicial protection of the rights and interests of the labourer.

Better Labour Relations Improve Competitiveness

A labour researcher from Shenzhen told China News Weekly that incidents of labour disputes have been on the rise in recent years, especially in Dongguan and Shenzhen, reaching a new high in 2004. Nearly 30 protests, each involving more than 1,000 workers, have occurred this year and the problems are always low wages, overtime work and poor living conditions.

On 6 October, workers from a Hong Kong-invested electronics factory staged a road blockade to protest against their being paid less than the minimum wage over a long period of time. It was reported that 3,000 workers had taken part in the protest.

A researcher of these workers' protests cites the fact that workers do not have representatives to fight for their interests, or a channel to express their discontent as the reason why the labour conflicts get out of control. He maintains that if workers in Xing Ang and Xing Xiong could have had their own representatives and organization to negotiate with their employer, as did the workers of Xing Lai and Xing Peng factories, they might have achieved their goals without paying such a price.

However, like most other Taiwanese-owned factories in Dongguan, Xing Ang has neither a trade union, nor a system for negotiation between workers and employer.

"Migrant workers are challenging the current system and conceptions. We used to be afraid that workers would organize themselves [against the employer]. But now we have realized that unorganized workers are even more dangerous, as they are more likely to act beyond control."

He said that workers should be allowed to organize themselves and to have a legal channel to express their grievances. They should be educated in the basic principles of the expression of grievances, how to negotiate, and how to fulfil their responsibilities to the company and society.

But first, both the government and employers needed to rethink some basic concepts. The head of a labour rights NGO in Guangzhou said: "Local governments tend to stand by the employers in labour relations. In their views, a cheap and "safe" workforce is essential to maintaining their local area’s competitiveness. If workers make any 'trouble,' local governments will take heavy-handed measures to maintain order in the factory and society."

The labour expert pointed out that harmonious labour relations in fact play a significant part in maintaining competitiveness and investment. Frequent labour disputes not only drag down a company’s productivity, but also affect its international competitiveness. From the government’s point of view, it endangers both short and long-term social stability.

Workers are the major victims of most labour conflicts, but employers and the government in fact also stand to lose.


[1] The journalist’s allegations in this paragraph concerning Chen Nanliu’s actions are contradicted by Chen’s own defense plea at trial, which was “not guilty.” In addition, his defence lawyer demonstrated in court that the prosecutor had failed to produce any evidence linking Chen or any of the other defendants to any specific acts of violence or other criminal activity on the night in question. (CLB)

For full details of the subsequent trials, see:

Eight Arrested Workers from Stella International Shoe Factories Go on Trial in Dongguan, Guangdong Province

Five Workers of Taiwanese-owned Shoe Factory in Guangdong Sentenced to Up to Three and a Half Years’ Imprisonment for Protesting Abusive Employment Conditions

Five More Stella Shoe Factory Workers are Sentenced to Up to Three Years’ Imprisonment following Mass Protest in April

14 December 2004

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