Growing labor unrest worries China’s leaders



Labor unrest is on the rise in China, driven by its economic slowdown and rising expectations for wages and labor rights, and exacerbated by problems in both local governance and China’s social safety net, analysts report:

China Labor Bulletin, a labor rights group based in Hong Kong, recorded more than 2,700 strikes and protests last year, more than double the number in 2014. The strife appears to have intensified in recent months, with more than 500 protests in January alone.

As China’s economy slows after more than two decades of breakneck growth, strikes and labor protests have erupted across the country. Factories, mines and other businesses are withholding wages and benefits, laying off staff or shutting down altogether. Worried about their prospects in a gloomy job market, workers are fighting back with unusual ferocity, The New York Times adds:

Last week, hundreds if not thousands of angry employees of the state-owned Longmay Mining Group, the biggest coal company in northeastern China, staged one of the most politically daring protests over unpaid salaries yet, denouncing the provincial governor as he and other senior leaders gathered for an annual meeting in Beijing.

Most demonstrations have refrained from political attacks and focused on grievances such as wage arrears, unpaid benefits like pension contributions and unsafe working conditions….

The upsurge in industrial action represents a challenge for a Communist Party that bases much of its legitimacy on its ability to manage the economy, The Washington Post adds:

Experts say it is not about to threaten the party’s vice-like grip on power, but it will ring alarm bells for local officials whose careers often depend on their ability to stamp out stirrings of social unrest.

Three days of demonstrations by thousands of unpaid coal miners posed the first direct challenge to Beijing’s plans to shut mines, steel mills and other loss-making production, The Financial Times reports:

The demonstrations took place during the annual meeting of the National People’s Congress in Beijing, which Premier Li Keqiang has used as a platform to make the case that lay-offs and government funding will be needed to address China’s crippling overhang of unprofitable industrial capacity. Up to 6m people could lose their jobs by some estimates, as Beijing tries to correct for the distortions caused by an excess of state-directed investment and subsidies in the years since the last big restructuring of the state-owned enterprises sector took place between 1998-2001….In China many lossmaking businesses keep workers formally employed but only pay them sporadically, to meet a political objective of maintaining low official unemployment numbers and keeping the newly jobless from protesting.

“Heightened labour unrest (especially from the coal and steel sectors) could undermine the government’s motivation to implement tougher reforms,” Sabrin Chowdhury, Asia analyst for BMI Research, wrote on Monday. She noted that laying off workers would also do little to address the large debt obligations carried by “zombie” groups.

China’s labor protections are coming under fire from high places as economic restructuring pits officials concerned about social stability against a lobby arguing inflexible policies are stifling job creation and suppressing wages, Reuters adds.

“The Chinese government wanted the best, the most polished labor legislation they could find, and simply imposed it on an economy that couldn’t cope with it,” said Geoffrey Crothall, communications director at China Labour Bulletin.

President Xi Jinping, concerned about challenges to the ruling Communist Party, has responded with a methodical crackdown, quashing protests, dismantling labor rights organizations and imprisoning activists. But his government has also sought to placate workers, putting pressure on businesses to settle disputes and making billions of dollars available for welfare payments and retraining programs, The Times adds:

The approach underlines the political dilemma that labor unrest poses for the Communist Party, which has continued to portray itself as a socialist guardian of worker’s rights even as it has embraced capitalism and welcomed tycoons into its ranks….. At the same time, Mr. Xi is grappling with a labor force that is better informed and more easily organized because of social media, and also more assertive, in part because of grass-roots rights groups that have emerged.

The tide of protests appears to be cresting as Mr. Xi contemplates an enormous downsizing of China’s bloated state industries, which are producing much more steel, cement and other goods than the market needs. According to recent study, more than three million workers could lose their jobs in the next two years if the cuts go through.

“This is probably the thing that keeps Xi Jinping up at night,” said Eli Friedman, a scholar at Cornell University who studies Chinese labor issues. “Governments are not swimming in money the way they used to be, and there’s less room to compromise.”

See also the separate New York Times video report by Jonah Kessel on the rise in labor disputes and associated danger for organizers and participants, says China Digital Times, a partner of the National Endowment for Democracy.

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