IBM strikes shine light on China’s labour laws

Strikes in China: gross inconvenience or golden opportunity for labour reform?

Author: Rita Lobo
March 14, 2014

Though the strike at the IBM plant in Shenzhen last week was highly disruptive, it had much wider implications than simply halting production for a few days. The strike, which involved over 1,000 workers, was the latest in a series of walk-outs to hit Chinese industries over the last three years, signalling the cementing of a new trend of industrial activism.

According to advocacy group China Labour Bulletin, there were 1,171 strikes and protests in the 18 months to December 2013, with the majority occurring in Guangdong Province, one of China’s main industrial hubs.

Chinese workers have been increasingly prone to strike action as labour shortages have tilted the balance of power in their favour

Chinese workers have been increasingly prone to strike action as labour shortages have tilted the balance of power in their favour. Shortages have also meant that employers have been forced to offer more attractive remuneration and benefit packages to workers, in order to entice them into staying.

Workers have started to protest when companies are bought and sold – often without their being notified – in order to ensure their favourable working conditions are preserved under the new owners.

Though it is down to circumstances that Chinese workers have suddenly found themselves with the upper hand in negotiations, it is an unprecedented situation that the government would do well to exploit.

In many of the recent strikes, workers have been arrested and convicted of a range of public order offences. Not only are these arrests misguided, they are downright damaging. Nothing will be gained by imprisoning strikers. China should instead take this opportunity to upgrade its labour protection provisions.

Though China has profited greatly from its cheap and vast labour force by attracting international companies to its industrial hubs; now is the time to protect its workers. A healthy and well-provided for workforce is by far more sustainable than an exploited one.

Furthermore, now that workers have realised how effective their actions can be, the Chinese government will do better to compromise than to instigate further actions by workers. Repression by authorities will likely only escalate actions by workers and may push them towards unionising.

Twenty workers were fired during the IBM strikes, and another 300 to 400 are said to have quit work entirely. Workers who agreed to return to work were offered a bonus by IBM – a dangerous and potentially costly move from the company. If adequate provisions for compensation had been in place, IBM and Lenovo, who are taking over the plant, would have budgeted adequately and not lost a week of production and half their workers.

By protecting workers rights, the government can ensure that conditions remain attractive for foreign companies looking to relocate to China, but also that the workforce is looked after and contented. By repressing protests violently, and with morally questionable arrests, authorities will only be increasing the risk for companies settled in the country, rather than mitigating them.