Business Spectator: Holding up China's sky

China Labour Bulletin appears in the following article. Copyright remains with the original publisher.

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Isabelle Oderberg
16 December 2008

This week, the managing editor of Time Magazine unveiled the final nominees for the famed 'Person of the Year' edition. The list included a number of the usual suspects, including Barack Obama and Ben Bernanke, but the most surprising addition to the list was also the most deserving – 'The Chinese Worker'.

In unveiling the finalists, Time's managing editor, Richard Stengel said, “China almost every year is so important in the global economy and this was the year of the economy. In fact, if China had not had eight per cent growth, as it had, which is due to all of those workers, the world economy would be in a much worse place. So it’s a way of looking at China’s influence on the world, which is just incalculable, really.”

If China is the engine room of world economic growth, then these are the people who keep the wheels of progress turning. In 2007 China had a total workforce of 786 million people. That is 35 times the entire population of Australia. Through the last three years, China’s workforce has faced setbacks and progress, stagnation and change. But still they labour on, driving what will soon be the world’s biggest economy.

Of all the workers in China, around 37 per cent are located in urban areas. China’s domestic migratory patterns in the last decade have been staggering and put massive pressure on the government. The trend of rural workers travelling to the city to find employment has spawned a new class and brought with it a host of problems.

An estimated 150 to 200 million Chinese rural workers are currently living and working in cities in China. They pay costly registration fees and are in many cases discriminated against by their urban peers. If migrant workers wanting to move to urban areas can get through the stringent qualification and registration criteria, they often face discriminatory practices from employers, including forced overtime with no additional pay, penalties for sick leave and no holidays.

Amnesty International's report Internal Migrants: Discrimination and Abuse, The Human Cost of an Economic 'Miracle' quotes former internal migrant turned successful businessman Wang Yuancheng, also a member of the National People’s Congress, as saying: “The lives of migrant workers are miserable. They have to live in makeshift shelters, eat the cheapest bean curd and cabbage. They have no insurance and their wages are often delayed. And most of all, they are discriminated against by urban people.”

While the global financial crisis has brought considerable wealth to the richest of China’s rich, the poor continue to suffer, with the gap between wealthy and poor still growing. “It has been an indisputable fact in our country that the gap between the rich and the poor is increasing,” says Zeng Xiangquan, the director of the school of labour and human resources of People’s University of China.

Surveys have shown that the richest 10 per cent of Chinese control 45 per cent of the country's wealth, while the poorest 10 per cent of Chinese control only 1.4 per cent of wealth. An overwhelming number of China’s richest people, the nation's billionaires, are the children of high-ranking officials and recently polling showed that a large number of ordinary Chinese have seriously healthy dose of resentment towards their wealthy countrymen. If you were toiling in a factory every day for tuppence and the newspapers were full of stories about stockbrockers and financial advisors in Shanghai snapping up flat-screen TVs, wouldn’t you?

In the lead-up to the global financial crisis, China enjoyed a level of growth that has assisted in propelling it through the current, more troubled times. But with it came staggeringly high levels of inflation, reaching almost nine per cent at some points in the cycle. While this inflation has cooled off more recently, rising in November by 0.6 per cent after nine straight months of declines, workers have faced years of hardship, with their ability to pay for basic necessities like food, shelter and healthcare increasingly limited.

At the height of the GFC, the Chinese government unveiled a massive stimulus package to keep its economy pumping, but much of that liquidity has been pumped into an already over-heated property market, resulting in what many believe is a huge bubble and adding significantly to the cost of living for average Chinese workers.

During that desperate period, 20 million Chinese workers found themselves unemployed. Graduates were being pumped out of universities to a job market in crisis. And while the government is trying desperately to create jobs, it will take time to replace many of the lost positions.

Now, it may be a case of a Chinese worker coming to a worksite near you, as the Chinese government looks increasingly at manpower exports as a way to solve its internal jobs crisis. Some even believe that India may be losing its English advantage to China.

However, there has also been some major progress as Chinese workers again realise their importance in the China growth story and start to put their collective feet down for better recognition, labour standards and health and safety.

The Chinese coal industry, for instance, is described as the world’s most dangerous industry. Just last month, over 100 workers were killed at the XinXing coal mine in Heilongjiang province. Interestingly, this year it was labelled ‘exemplary’ by safety authorities. Official data shows that the number of deaths in the sector has been cut in half since 2002, to 3,210 last year – still a number that would be totally unacceptable in any developed nation.

But Chinese workers are standing up for change. In 2007 and 2008, government officials sat down at negotiating tables all over China in a bid to mediate disputes with workers, both within state-owned enterprises and private companies. Even western companies with operations in China have been dragged into the fray, one of the most notable being a one-day strike held by workers at Intel’s Sichuan-based plant.

According to the report Going It Alone; The Workers Movement In China (2007-2008), produced by the China Labour Bulletin, after the government implemented the Labour Contract Law and Labour Arbitration Law in 2008, the number of cases dealt with by China’s labour dispute arbitration committees nearly doubled to 693,000 by year’s end, with the number of workers represented by these cases rising to 1.2 million, from 650,000. A whopping 22,000 collective cases were accepted by the committees, which was a 71 per cent increase from 2007. While there are still inconsistencies and cases where the human rights of many workers are still infringed upon, strides have been made in the several years and the Chinese government has assisted.

The Chinese government, or to use its real name, the Communist Party of China, should remember that the workers make up the backbone of its economy. Without these ordinary people, China would not have made the strides it has – strides the western world is right to be grateful for
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