China's economic slowdown, and the rising costs of labor in the country's main industrial hubs, are contributing to a transformation in the way workers negotiate with employers, says a Hong Kong-based workers' rights organization. Equipped with a better understanding of their rights, workers in China are increasingly using collective actions to negotiate pay and benefits.
"In the past two years, collective actions by organizations established by workers themselves have become the mainstream type of labor movement in China," says the Fifth Report on Chinese Workers' Movement released this week by the China Labor Bulletin
, an organization that monitors workers conditions in China.
The report looked at 270 strikes that occurred between 2011 and 2012 in various regions of China. It found that workers took to the streets during disputes over issues such as non-payment of overtime, and compensation after the companies' relocation or management changes. The majority of the disputes happened in factories in the coastal provinces of China, where most manufacturing companies are traditionally located.
Countries affected by the global financial crisis and the European debt crisis, such as the United States and Eurozone members, have decreased their orders from China in recent years.
As a result, China's export sector - key to the country's economic growth in the past decade - has suffered, and manufacturing companies have taken measures to cut their losses, including eliminating staff, relocating production to cheaper locations or selling.
"These actions affected the relationship between employers and workers," the report said. "Some workers did not agree to relocation, others faced unemployment, others again did agree to remain in the company but worried that the new management would not recognize their years of work and seniority."
The report cited examples of how such grievances have turned into collective actions. In January of last year, 3,000 workers from Sanyo Electric in the Guangdong city of Shenzhen went on strike. Sanyo had not notified workers of an agreement to merge with Panasonic, and refused to pay merger compensation to the workers.
"Chinese workers have already found their status, they understand their own rights, and are taking action to see those rights realized," the report said.
Geoffrey Crothall, the communications director at the China Labor Bulletin, said that while these were very encouraging signs, the labor movement in China still lacked a long-term and well-established mechanism to resolve labor disputes through peaceful negotiation.
"At the moment, if workers have grievances they still pretty much have no option but to simply go out on strike and force management to at least listen to their demands," said Crothall.
Crothall said that the Communist Party-sanctioned nationwide labor union has largely been a bystander in labor disputes.
"They have made some attempts to be more actively, and more positively involved over the last couple of years in the local level, in Shenzhen and Guangzhou," he said. "But generally, it is still the case that the workers are on one side, managers are on another, and the trade union is on the sideline looking in."
The All China Federation of Trade Unions
is the only organization permitted to represent workers in China. The group is responsible for overseeing workers' rights, but often has been accused of failing to act on its members' behalf.
The union has a wide presence in state-owned companies, and has established branches in private and foreign companies operating in China as well.
Liu Erduo, associate professor at the School of Labor and Human Resources at Beijing's Renmin University said that, while trade unions within state-owned companies were not likely to change the way they managed workers, progress was likely to happen within private firms.
"The nature of trade unions in non-state companies might vary in the future," said Liu. “Unions might be able to be more independent in their management, and as a result there might be a trend towards a variety of forms in social movement by workers, collective bargaining, as well as management of disputes between workers and employers."
In 2008, China passed a far-reaching labor law that granted increasing contractual rights to workers, and enhanced the role of unions in negotiating wages and working conditions. Many local NGOs have been able to use the law as a tool to educate workers about their rights, as well as push companies to grant employees better deals.
Crothall said that NGOs and worker activists were now doing the job that the official trade unions should be doing.
"Ultimately the ideal solution is for worker activists to actually get involved in the official trade union, either through election at the factory level, and really act as proper union and workers representatives in the workplace," said Crothall.
The continuing slowdown in China's economy is likely to spur more discontent as more companies are forced to relocate, or are not able to fulfill their contractual promises.
In the first four months of 2013, the China Labor Bulletin recorded 201 cases of labor disputes, almost double the number during the same period last year.