My Journey to Hong Kong and China

My trip marked many “first times in China” for me: first time using the Internet; using a cell phone; driving on China’s freeways; reading China’s tabloid newspapers; seeing dozens of foreign TV channels on Chinese TV; and the first time seeing McDonald’s, Starbucks, Wal-Mart, Sam’s Club, KFC, and 7-11 stores everywhere.

Everyone in China tells me they want to see China be strong, prosperous, and free from any western power’s control. There’s no doubt that the Chinese Communist Party (CCP) and Mao Tse Tung liberated China from imperialism, feudalism, and colonialism; they also created a modern industrial and nationalist identity. Despite the fact that many people in China have strong criticisms about the government and the CCP, most Chinese people still strongly support it and its definition of Chinese nationalism. While many Chinese express a wish that the country could be as free and democratic as Europe and the U.S., they nevertheless oppose any foreign intervention in China’s domestic affairs. “Look what happened in the former Soviet Union and what America has done to Iraq,” I was told. 

To understand the rapid changes, Weifang, hometown of my grandparents, offers a good example. Located in the northeastern coastal province of Shangdong, Weifgang is considered a small city by Chinese standards: approximately 400,000 in the urban population and another 600,000 in the large rural areas. It’s a town with over 1,000 years of history, famous for kite making and woodprint posters. Except for its international kite festival in the spring, foreigners rarely visit the city. But over the past 20 years, the city has been transformed into one of the Shangdong region’s biggest industrial and agricultural centers. Though known for high technology and heavy industry, in the countryside private farmers with greenhouses grow many kinds of fruits and vegetables for domestic consumption and for export all year long. 

Yet, like any other Chinese city, Weifang has its social and economic problems. First of all, the income gap between rich and poor, urban and rural, is getting critical. For government officials, there’s a kind of a “trickle-down” argument: in order to develop the city’s economy (including its rural areas) with limited money, they should first spend on the development of industrial parks, roads, highways, and hotels so the city can attract foreign investment. The thinking is that industrial and urban development can help absorb the city’s urban and rural labor forces. Economic development would then help grow consumer demand for goods, sell more farm products, increase incomes, and eventually develop local industries. 

According to a local newspaper, one of Weifang’s rural districts has 90,000 semi-unemployed farm workers (“excess family farm labor forces”) in need of jobs, about 50,000 of whom have become export laborers traveling across the country, working in the construction, service, and manufacturing industries. Ironically, there are at the same time thousands of migrant workers from across the country coming to Weifang for work. As my grandmother says: “China has too many people; in all things the solutions are difficult.” 

Hong Kong 

H ong Kong is a socially and culturally modern, commercially and bureaucratically vibrant city of seven million people. Although a world class financial center, the key airport hub of the Far East, and home of the world’s biggest cargo port at Victoria Harbor, the city is smaller than the San Francisco Bay area. 

Beneath the night lights of downtown and the harbor, which give Hong Kong the nickname “Pearl of the Orient,” the city has always been one of the key organizing centers in the modern Chinese labor and revolutionary movements. From Sun Yat Sen’s revolution of 1911 to the creation of the Republic of China (ROC), through the Communist and trade-unionist movements of the 1920s and 1930s and the famous year-long general strike of Hong Kong and Guangzhou, to the communist revolution of the 1940s and the formation of the People’s Republic of China (PRC) in 1949, Chinese activists in Hong Kong have played a key role.

The labor problems, the environmental problems, and such cultural problems as Taiwanese businessmen getting mistresses are troublesome issues to be dealt with, but the sense is that eventually it’ll all work itself out. Overall, people tell me the companies run by the Westerners (Americans or Europeans) treat workers better then the companies owned by people from Taiwan or Hong Kong, the worst ones are generally run by small family-owned Hong Kong businesses. 

Labor unions are another issue. Contrary to the common notion, China is a highly unionized country. Most government employees, state or collective enterprise (semi-state/private capital) workers, and employees of major joint-venture companies whose Chinese side is owned by the state, have all joined a union backed by the All China Federation of Labor Unions (AFLU), which is controlled by the Chinese Communist Party. 

However, non-state or non-collectively owned enterprises have a very low unionization rate. According to the AFLU, as of 1998, only 7.3 percent of the non collectively owned enterprises and just 4 percent of privately owned companies had labor unions. There is almost no union representation in export-oriented factories owned by overseas Chinese from Hong Kong or Taiwan. Although the AFLU and many other government officials repeatedly complain about the private companies’ violations of labor rights, they don’t seem to be able to suggest any good solutions. 

In many cases, the company fires workers who try to organize a union. In other cases, pressure from workers allows a union to form, but the leadership is controlled by management. I asked a Shenzhen labor official, while he was complaining about foreign companies keeping workers from joining a union, why the workers cannot form their own independent union if the major unions didn’t help them. The official replied, “It’s a violation of Chinese law; we do not allow the formation of unauthorized unions.” 

B ased on my observations, there are many myths about Chinese migrant workers preventing activists from correctly understanding labor conditions in China:  

(1) Most Ming Gong in China do not work for foreign-owned factories in coastal cities: rather, most of them are working in construction, transportation, domestic manufacturing, mining, and service industries all across China, and have nothing to do with export business. An estimated 20-30 percent of migrant workers do work in foreign-owned factories—including sub-contractors for Western brands—generally owned by overseas Chinese from Hong Kong, Taiwan, and the United States or Canada. 

(2) Not all migrant workers are young females: it depends on the industry. While female workers dominate the manufacturing and service sectors, male workers pre- dominate in the construction, transportation, and mining sectors. 

(3) It’s still about the money. It’s common knowledge that Western-owned companies and their large projects in China, or large Chinese state-foreign joint ventures, generally have the best working conditions; next come the large Taiwanese-owned companies in the Shanghai area, and then the Chinese state-owned industries. Farther down the line, in the Hong Kong- and Taiwan-owned factories (and in small family-type companies) that subcontract for western brands, the problems are generally low pay, hazardous working conditions, poor industrial safety, and sexual harassment. 

(4) The worst sweatshops in China are generally run by Chinese private businesspeople. For example, in the construction and mining sectors. They generally have nothing to do with the export business. Especially in the private coal mining sectors, the owner of the mine will typically pay bribes to local officials to ignore safety violations, causing many tragic accidents and resulting in hundreds of deaths every year. 

According to the recent government census, in 2001 the highest paying companies were foreign-owned major manufacturing industries (such as General Motors or Honda auto factories in China). Their workers’ annual wages were 15,358 YMB (USD $1,970), 46 percent higher then state-owned workers in China, 10,515 YMB (USD $1,348); subcontractors for western brands owned by over seas Chinese, 11,039 YMB annually (USD $1,415). Chinese-owned private companies, on the other hand, only paid their workers 7,740 YMB annually (USD $992). 

So what are the key areas of labor struggle in China? Based on different reports, it is concentrated in the following four areas: 

Violation of labor laws: The subcontractors in privately owned or foreign-based companies generally don’t give any benefits or worker securities. In addition, they force workers to work overtime without pay, with enormous working pressures, serious violations of health and safety codes, sexual harassment, while preventing workers from joining a union: all violations of Chinese labor law. 

In many cases, when workers are injured or even lose a hand or finger due to an industrial accident, they lose their jobs without any financial compensation. Some Taiwanese factory owners recently told the newspapers they refuse to pay compensation or medical bills because they accuse the workers of “deliberately injuring themselves to blackmail the company for money.” 

Except in some high-profile cases, the government generally does not actively help workers and, without unions or public/media pressure, they don’t have enough power to demand collective bargaining. 

Housing and food : Traditionally, Chinese workers live in a dormitory provided by the factory and eat at the factory’s cafeteria, both for free. Some subcontractors try to force workers to pay their housing and food, but “It’s a violation of the law, and also another way to cut their wages,” the official says. 

Increasing income inequality : Although overall income for factory workers is rising, some Hong Kong and Taiwan subcontractors are “forced” to cut workers’ wages in order to win contracts with foreign firms such as Wal-Mart. It’s a much discussed issue at the factories in the Pearl River Delta region. The workers blame greedy factory owners, while factory owners blame U.S. companies and too much competition in China willing to work for less. One typical example: Chinese-made microwave ovens sold for $30 last Christmas season in stores across the U.S. The factory owner claims that in order to meet the less then $10 manufacturing price, he needs to slash worker’s wages, require overtime without pay, and take almost no profit on the ovens.

According to a recent government report, in 2003 the per capita income of urban residents (35 percent of the Chinese population) was 8,472 RMB ($1,033 USD), an increase of 9.0 percent from the previous year; whereas for rural residents (65 percent of the Chinese population) per capita income was 2,622 RMB ($320 USD), one-third of urban incomes and only increased 4.3 percent from the previous year. As more wealth is concentrated in the cities and the middle-class (which, depending on the definition, ranges between 10 and 30 percent of the Chinese population). 

Deadbeat Wages : According to the news reports, there are up to 17 million workers whose employers, primarily from Chinese owned private companies, owe workers back wages. Estimated amounts are in the range of 10 billion YMB. ($1.25 billion USD). Some employers even owe workers over three years’ back pay. The “deadbeat wages” issue creates huge tensions between local government, employers, and workers. Every day in the Chinese press, you’ll read many stories about “deadbeat wages” and how local government officials fight to get money for the workers from the deadbeat bosses, so workers can go back home for the holiday. 

End Notes 

I t has been months since I returned from my trip to Hong Kong and China. Recently, the Bush administration rejected the major U.S. labor unions’ request for trade sanctions against China. It was considered good news in the Chinese media because it’s a victory for China’s fight against what it sees as racist protectionism from the United States. 

As a labor activist, I have mixed feelings from the trip. Most U.S. labor activists do not understand China. For instance, most pro-“democracy” right-wing activists in Hong Kong are members of Western supported groups, getting U.S. funding and clearly serving U.S. anti-China interests.Yet many U.S. activists go to Hong Kong and only meet with these U.S. front groups. 

Sweatshops are a complex socio-political phenomenon. More than a simple economic exploitation, they are also a product of the Cold War between East and West. The economies of most U.S.-backed right-wing military governments in Central America and the Caribbean, such as Haiti, El Salvador, Panama, and Nicaragua, rely on the sweatshop factories invested in and operated by Korean and Taiwanese companies. 

These countries in turn maintain diplomatic relationships with Taiwan. Thus, Central America is the region where Taiwan maintains most of its alliances with countries who help it to continue its U.S.-backed breakaway from China. 

Most Chinese believe that Taiwan is part of China and there’s no compromise possible with this issue. Ordinary Chinese are angered by the Taiwanese government’s use of economic tools (sweatshops) to keep diplomatic relationships. China, in turn, also tries to win support from Chinese across the world by supporting their economic needs and their businesses, which in practice means supporting sweatshops. 

After my trip, I again returned to my work in a sweatshop in downtown Los Angeles: hope, disappointment; more hopes, more disappointment again. My godmother (in the U.S.) always tells me: “Never say never, never give up the hope. People come and go, the true one will always stay.” I think the same about anti-sweatshop and anti-globalization movements—we need to believe there’ll be hope and love at the end, otherwise, there’s no reason to keep doing this. 

One of the missing links in the sweatshop struggle is a focus on the Hong Kong and overseas Chinese who run sweatshops. Most export factories in China, other parts of Asia, Saipan, and Central America are owned by Chinese from Hong Kong, Taiwan, the United States, and Canada. Without putting the Hong Kong and overseas Chinese owners into the equation, we’ll never be able to find the faceless workers in China, Indonesia, and El Salvador who make the products, the invisible hands that make it happen.