The announcement ... unleashed a torrent of strongly critical commentary on the Internet, with thousands of people in news discussion groups and on blogs denouncing what were widely perceived as light punishments, and questioning the failure to pursue criminal charges or allegations of corruption.Update: Was obvious wrong here. One has been sentenced to death and 28 to jail, says the BBC.
A serious political incident was first turned into a serious criminal case, and then slowly transformed into a matter of ordinary malfeasance," wrote one online commentator. "Once all of these rustlings are over, the same things are bound to happen again."
In order to implement compulsory redundancies, the management of the Shuangma group offered each worker compensation at RMB 1380 for each year of employment.Lafarge is working in China through a joint venture with the famous Shui On Group from Hong Kong. The town has virtually closed off from the outside world and internet has been disconnected in an effort to try and stop news from leaking out, the publication says.
As part of the compensation deal workers will lose all entitlements to their pensions, social insurance and medical insurance, even if they have worked for this former state-owned company for over 20 years. It is reported that these terms were a prerequisite for the takeover from Lafarge’s side.
Two things in particular concerning the media's handling of the Shanxi Kiln Affair are inexplicable. One is the shallowness of reporting. Much news in the case early on was slapped together from unverified popular rumors and Web chatter. Subsequent reports failed to go deeper into the heart of the story, generously yielding free space for the subsequent “authoritative” version [offered by officials]. Secondly, after the affair broke, the media quickly turned the focus of the news story, neglecting investigation of the enslaved workers and their families, and of the tyrannical boss and the power clique that protected him. The focus turned [instead] to officials and law-enforcement as they worked to clean up the situation. [See ESWN translation of Southern Weekend report here]More details at the CMP.
Hongdong has made the preliminary decision to sanction Guangshengsi town mayor Xu Jintie. When Xu was interviewed by the Southern Weekend reporter, he said: "We definitely have an unavoidable responsibility. We have to accept our responsibility."
Then the Southern Weekend reporter asked this grassroots official: "If you were dismissed from your position, how would you feel?"
The mayor lowered his head for a long time and said nothing. When he raised his head again, he was crying.
That approach is in keeping with the Chinese government's push to create a "harmonious society." But it was clear that the Chinese were, both literally and figuratively, speaking another language from the Americans."We come here and they're talking about harmony," said Durazo. "Harmony? With someone who's just thinking about maximum profit? We just can't think that way."
I have seen your blog. You are the biggest liar I have ever seen in my life. You are seriously sick and need to see a doctor. By the way, I am not threatening you. I am going to sue you - that is exactly what I am going to do, and I will sue you for a huge amount of damages.I'm going to watch this for a while.
Wu: Last year I wrote an article that calculated the wage difference between Zaozhuang coal mines with and without a labor union. Before the labor union came, the workers were exploited terribly. Five years after the union arrived, workers' wages had risen 32%. Labor unions are one form of political power, and political power is worth money. It can be eaten - it was worth 32% of their former wages. The second question is whether the boss suffered after the wages were raised. Did profits drop? In those Zaozhuang mines, profits did not drop.
I've asked two bosses what would happen to their companies if, in the next five years, their employees' wages were to rise 30%. Would they forfeit market competitiveness? They said that the competitive edge that China has in the world market, particularly its cost advantage, is not just a point or two.
Today, Chinese products can be dumped on the world because of that labor cost advantage. This upsets workers in other countries, and has even caused problems to international order.
I've calculated that if China were to increase the salary of its 100 million migrant workers by 32%, this would bring to their families benefits worth 5 times what canceling the agriculture tax brought. This money would be transformed into spending power. One problem China has today is overproduction. Even if its competitiveness on the world market is weakened, the benefits of spurring domestic consumption are enough to make up for it.
Chinese leaders have been alarmed by a spike in inflation that saw the price of eggs rise 37.1 percent in May from their price in the same month last year. Meat and poultry were 26.5 percent more expensive in May compared to a year ago.It is unclear what the effect could be. Minimum wages tend to be rather low anyway and compliance is another problem. The figures for the inflation seem pretty high, compared to what I have seen in Shanghai. Just like the minimum wages, figures for inflation might vary greatly between regions.
The increase "would have a great impact on low-income families," the Xinhua News Agency said.
What have media tycoon Rupert Murdoch and US trade union leader Any Stern in common? Both of them came to China with a mission, and both have seen some - but it limited - successes. Murdoch wanted to introduce modern media to China, Stern wanted to help the Chinese trade union to organize Wal-Mart and maybe more. In both cases the question is: what will happen to their heritage when they have obtained Chinese characteristics?
China has a pretty mixed reputation when it concerns receiving foreign guests. Early Jesuits were gladly offered a place to stay in Beijing, but in the 19th century the heads of foreign missionaries occasionally were chopped off. Both gentlemen seem to fit excellent in that missionary tradition that has dominated the relations between China and the rest of the world for centuries. Mr. Murdoch came closest in getting his head chopped off, at least in the early 1990s when he denounced authoritarian governments like that in Beijing. Those days are long forgotten and after some years of unease, Mr. Murdoch became good friends with those same people he sought to overthrow earlier in his life.
What Stern and Murdoch have in common with the earlier generations of missionaries is that making money is not topping their agenda, but more a more ideological drive is bringing both to China. Mr. Stern is educating China's trade union in grass root organization skills, skills they first applied last year when they organized the US retailer Wal-Mart. In the end a better-organized trade union in China might help to raise the Chinese wages and that might indirectly be beneficial for Mr. Stern's members back in the US, but that seems a target for the long haul. Most business people are more driven by quarterly figures and that makes them rather different from the missionaries, modern or old.
Mr. Murdoch is equally in the media business for the very long haul, if any, as he has discovered the hard way. While much of his efforts to educated the state-owned news media had been gratefully accepted, earning money himself has - possibly forced by the difficult circumstances for foreign media to work in China - obtained a lower position on his agenda too. Each of his media projects in China was seen as a sure winner but invariably ran into problems with backstabbing regulators, lackluster attention from the consumers or a combination of both. The recent launch of his elsewhere successfully social network MySpace has not been the instant success in China it was expected to be.
What both gentlemen have in common with the earlier generations of missionaries are their sky-high expectations on how they can change China. Changing China was high on the agenda of missionaries, as it seems to be on the agenda of Stern and Murdoch. Both work in industries that are heavily dominated by government-driven political agenda's and in both cases it looks very unlikely they might even make a dent in China's spurt forward. At best China will reuse some of the tools they offer and use it for their own purposes. They might leave behind some nice churches and maybe that is rewarding enough.
The illusion of being able to make a change in China keeps the missionaries running and makes them sometimes admirable people. It does not mean they will be successful.
"Can we take this Henan child with us?" I asked. "That is unacceptable. I spend 400 yuan to buy him."
ESWN translates more of the media reports on the Shanxi-slaves here. The issue is - rightfully - still high on the agenda.
Just settled down in Brasschaat, Belgium for the coming weeks. Struggling with bad connectivity and and host of thousands of RSS-feeds and twitters I have to go through. Will try to catch up by Monday.
Update I: Shanxi governor offers his apologies.
Update II: First two official arrested.
Update III: ESWN translates a case story of a now famous kiln in Hangdong county.
Even as the principal criminals at the illegal brick kilns are severely dealt with, we must hold accountable and punish severely in accordance with the state laws and disciplinary rules all those cadre leaders who refused to see or hear anything occurring within their jurisdictions and neglected to carry out their duties.
"Lewisian turning point" is based on a theory of Nobel laureate Arthur Lewis (1915-91), who said a developing country's industrial wages begin to rise quickly at the point when the supply of surplus labor from the countryside tapers off.
The Southern Metropolis Daily, a popular tabloid, said the same local officials who were now parading themselves as rescuers of trapped workers had long turned a blind eye to the trade...
"The dereliction of local government departments and even collusion between officials and criminals is plain to see," said one local newspaper commentary reproduced on the Web site of the People's Daily (www.people.com.cn).
Other critics said the abuses highlighted the disintegration of local government in the countryside.
He has become a central villain in a national drama over possibly hundreds or more teenage and adult "slaves" forced or cheated into grueling labor in kilns, mines and foundries across Shanxi and neighboring Henan province...
"I felt it was a fairly small thing, just hitting and swearing at the workers and not giving them wages," Heng said, according to the Shiyan Evening News.
What a visit to Guangdong would tell you is not a story of worker shortages, but rather one of misallocation. Factories with poor conditions often have no shortages, while cleaner, better and newer factories struggle to staff-up... CSR reps, journalists and sourcers visiting factories around Guangdong report that the age of workers appears to be getting worryingly low, as the search for low end assembly workers intensifies. Add to this some more bad news in the run up to the Olympics (see our advertisers nervous about Darfur piece last week) with stories on the BBC, in the Guardian and from lobby group Play Fair 08 claiming to have found children as young a 12 producing Olympics merchandise in Guangdong (click here). All very worrying.
It said up to 1,000 boys were being held, but that Shanxi and Henan police had shoved responsibility for investigating onto the other side.
"Our children's safety is everything, but who will help us? With governments on both sides passing the responsibility, where can we go for help?" the petition said.
Much has already been said about the lengthy battle surrounding the draft labor contract law in China. A lobby, headed by US labor groups and Chinese academics like professor Liu Cheng, have put especially the American Chamber of Commerce in Shanghai in the position of the villain, accused of trying to to undermine efforts of the Chinese legislators to protect the rights of Chinese workers. By maintaining sweatshop conditions among their suppliers, foreign companies only focus on their own profitability, is the argument.
When you get into such a PR-crisis as Amcham Shanghai did, setting a successful counter-strategy is tough. When Yahoo came under fire because it helped the Chinese authorities to jail the Chinese journalist Shi Tao, they simply kept silence or tried to avoid the issue. The issue is still haunting them. Perhaps, when you action is really indefensible, like in Yahoo's case, shutting up is perhaps the only strategy. But while the way Amcham Shanghai has been dealing with their input for China's labor law certainly does not deserve a prize in a beauty contest, keeping silent only adds to the impression its stance is indefensible. That might be the wrong signal.
An organization like Amcham brings together a great variation of companies, huge, small from almost every conceivable industry. Their opinions on how to deal with labor in China might vary equally, creating a problem whatever position Amcham would take. There would always be a larger portion of the membership disagreeing. Microsoft simply has fewer possibilities to squeeze its suppliers than Wal-Mart.
I think the lobby in favor of a stronger labor law has done itself a disservice by simplifying the debate to a pro-labor and pro-company stance, while ignoring the differences between companies.
Nike is a good example company, despite their dependence on a large number of Chinese suppliers, trying to turn around the current dilemma. Nike has about 800,000 workers in its global supply chain, says this article of the Financial Times, Most of its products come from China.
The company says it will set up an educational programme on workers' rights to freedom of association, to be implemented in all of its contract factories by 2011, the date the company has set for reaching sales of $23bn (€17.1bn, L11.6bn).
Hannah Jones, Nike's vice-president for corporate responsibility, said the brand was now placing a greater effort on promoting "systemic" change in its supply chain, which would include strengthening the ability of factory workers to speak out on their own behalf about problems. "We believe constructive dialogue between workers and factory management leads to better conditions," she said.
Clearly Nike is trying to set a new standard now policing the suppliers failed to work. How that will work out in China, where the government and its only trade union ACFTU has just announced they want collective bargaining for all companies in place in a few years time, is very unclear. For sure we have some interesting developments ahead of us and it would be interesting to see whether Amcham Shanghai would see a role for itself in this new process.
