Chinese Workers Hammer Honda. Is Strike Sign of Shifting Beijing Labor Policy?

By Roger Bybee

The economic boom in China, if one were to believe the fairy tales spun by NY Times columnist Thomas Friedman, has been the inevitable result of China's decision to don the "golden straitjacket" of "free-market" policies.

Untroubled by reality—China, like India, followed state-guided economic planning and steered clear of financial de-regulation—Friedman argues this "golden straitjacket" limits political options by re-orienting society to meet the needs of corporations, and in return produces immensely more economic wealth and freedom for the entire society. Fellow corporate globalization crusader Fareed Zakaria hails "the free movement of capital" as "globalization's celestial mechanism for discipline."

But a strike by 1,900 workers at a Honda transmission plant in southeastern China has blown the lid off a heretofore stable structure of oppression. The fact that the strike, in the city of Foshan, has been permitted by Chinese authorities is an extraordinarily important departure from China's repressive labor policy.

The strike indicates that many in the nation's elite believe that, according to the Times, "without higher incomes, hundreds of millions of Chinese will be unable to play their part in the domestic consumer spending boom on which this national hopes to base its next round of economic growth."

'CELESTIAL' EXPERIENCE?

Contrary to the reassuring bromides of Friedman and Zakaria, those actually working for foreign corporations in societies like China confined by the "goldem straitjacket," are finding the experience to be anything but  "celestial." 

Nor are their sacrifices of regimented lives living in barracks, long hours on the assemblyline, and miserable pay producing the promised  "golden" existence. Workers at the Honda transmission plant in Fushun receive just $150 a month and are vigorously pushing for major pay hikes

Generally, Chinese wages amount to about a pitiful 3% of those in the U.S. for production workers, according to Jeff Faux's book The Global Class War. Nonetheless, Western media reports about China's rapidly soaring elites almost invariably convey the image of a rising tide of Chinese prosperity lifting all sampans.

In reality a few are luxuriating on yachts while the majority continue to struggle to keep their heads above water while working in foreign-owned sweatshops. Fully 60% of China's exports come not from Chinese-owned firms, but from factories run by US, Japanese, and other foreign owners.
The strike—and the unprecedented amount of news coverage permitted about the struggle against Honda—are shining a spotlight on the massive inequality in China. 

CHINESE 'SOCIAL HEALTH' AT LEVEL OF JORDAN, BELIZE

The extent of poverty and inequality in China is truly breathtaking, especially given all the focus on the new affluence of China's commercial elite. But for those who do not matter, as Noam Chomsky recently pointed out, "One standard measure of social health is the U.N. Human Development Index. As of 2008,.. China ranks 92nd—tied with Belize, a bit above Jordan, below the Dominican Republic and Iran."

Around 2005, Chinese leaders were rocked by thousands of mostly spontaneous protests by workers fed up with long hours, low wages, and lives largely confined to work and the barracks in which they slept. So China proposed a new "labor code" in 2006 that provoked exit threats from U.S. and other foreign employers:

The move [the proposed labor code], which underscores the government’s growing concern about the widening income gap and threats of social unrest, is setting off a battle with American and other foreign corporations that have lobbied against it by hinting that they may build fewer factories here. …

Whether the foreign corporations will follow through on their warnings is unclear because of the many advantages of being in China …{like] millions of young workers to labor for low wages at companies that made cheap exports.

“Some of the world’s big companies have expressed concern that the new rules would revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany.

The opposition to new labor protections was ferocious, The corporate opposition prompted the late labor activist Tim Costello of Global Labor Strategies to note the glaring contradiction between the rhetoric of global uplift and the reality of globalized misery:

You have big corporations opposing basically modest reforms. “This flies in the face of the idea that globalization and corporations will raise standards around the world.

HONDA FEELING SECURE IN CHINA

Eventually, the corporate lobbying succeeded in softening China's efforts to restore stability by creating a greater degree of equality, and foreign corporations basically carried on as before.

Thus Honda felt it prudent to build a crucially important transmission plant in China. As reported the NY Times,

Each [transmission plant] costs as much as $1 billlion, more than twice the cost of an assembly plant…The factory here supplies four Honda plants in China, all of which have been shut down.

Automakers tend to put transmission factories only in the most politically stable and strike-free countries, because a shutdown for event a day is costly Until now, China was seen as a safe bet.

While the relentlessly pro-corporate Chinese government may yet yank the workers' leash on the strike, the Honda transmission-plant strike may be a signal that major transnational corporations will have to modify their 18th-century treatment of Chinese workers—who are increasingly unwilling to accept their society's massive inequality.