Wandering China

An East/West pulse of China's fourth rise from down under.

Taxi drivers end strike in eastern Chinese city [AsiaOne/Reuters]

The democratisation of China or a reminder that the Chinese have never been happy to accept unjust conditions for too long. One only has to look back at the rise and topple of a multitude of dynasties over hundreds of emperors. Recent actions such as the Honda China strike revealed deep labour discontent at low wages amidst rising living costs. And they seem to be winning. Foxconn has been made to raise wages by up to 66-70% (depending on who you read) which is indicative of a notable shift of power back to the people. And that’s just the tip of the iceberg. According to research at the Transition Institute, there have been 60 taxi strikes in Chinese cities in recent years.

For local coverage, check out China Daily – Striking cab drivers back to work in Hangzhou, August 5, 2011

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Taxi drivers end strike in eastern Chinese city
Source – AsiaOne, published August 4, 2011

Photo: Reuters

SHANGHAI – Taxi drivers in the eastern Chinese city of Hangzhou have returned to work after three days of protests demanding higher wages, the official Xinhua News Agency reported on Thursday.

A series of similar protests by taxi drivers have hit other cities across the nation, highlighting mounting frustration among migrant workers who make up a growing share of the country’s workforce.

The drivers in Hangzhou, who have gathered at several points throughout the picturesque city for the past three days, had begun taking passengers on Thursday morning after the government pledged to hold a public hearing and adjust fares, Xinhua reported. Read the rest of this entry »

Filed under: AsiaOne, Automotive, Chinese Model, Culture, Democracy, Domestic Growth, Economics, Government & Policy, Honda Strike in Foshan 2010, Infrastructure, Mapping Feelings, Politics, Population, Reform, Reuters, Social, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Transport

Red, Delicious, and Rotten: How Apple conquered China and learned to think like the Communist Party. [Foreign Policy Magazine]

From righteous upstart to luxury item where the Chinese want to show off their ‘Apple Identity’. Christina Larson from Foreig Policy magazine reveals some interesting statistics in this revealing article.

‘…Today an iPhone 4 16GB sells for 5,000 yuan, or about $775. Of course, that’s still an extraordinary sum in China. By comparison, a simple Lenovo or Nokia phone typically runs less than $100 in China. This in a country where the per capita income in 2010 was just $4,260, according to the World Bank. An iPhone, let alone an iPad or MacBook, is no casual purchase.’

Also of particular note – are the allusions to the sacrifices fellow migrant worker Chinese have to make to produce these goods for more affluent Chinese, and reported many times, at the expense of health and life.

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Red, Delicious, and Rotten
How Apple conquered China and learned to think like the Communist Party.
Source – Foreign Policy, AUGUST 1, 2011

Photo – Foreign Policy Magazine Online

A friend in Beijing recently told me a story about the time a China Telecom technician came over to install the Internet connection for her Apple laptop. The man, an experienced worker, puzzled over the slim, silver device. He picked it up gingerly, holding it away from his body as one might inspect a suspicious package. After a few minutes, he set to work, but then grew frustrated when he couldn’t find the familiar pull-down menus to configure the connection.

That was just three years ago. Today, it’s highly unlikely that any Chinese technician would be similarly flummoxed. Since the first Apple Store opened in Beijing on July 19, 2008, the company has made astonishingly rapid inroads into the Chinese public’s pocketbooks and imagination. In any high-end coffee shop like Starbucks or Costa Coffee in central Beijing or Shanghai, the ratio of Apple devices (iPhone, iPad, MacBook, etc.) to non-Apple devices is often more than 1-to-1.

Apple now has four flagship stores in China — two in Beijing, two in Shanghai — and plans to open an additional store in Shanghai and its first Hong Kong location within a year. There are also hundreds of licensed Apple resellers in major Chinese cities, as well as many more unlicensed venders (including the elaborate fake “Apple Store” in Kunming unmasked two weeks ago by an American blogger). And these stores are packed with customers: As the company’s chief operating officer, Timothy Cook, revealed on a recent earnings call with reporters, “Our four stores in China [are], on average, our highest traffic and our highest revenue stores in the world.” Each attracts as many as 40,000 people daily (to accommodate crowds, Apple’s stores in China are designed to be much larger than in the United States). From 2010 to 2011, revenue in greater China has ballooned 600 percent, totaling $8.8 billion for the first three quarters of fiscal year 2011. Read the rest of this entry »

Filed under: Beijing Consensus, Domestic Growth, Economics, Foreign Policy Magazine, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Human Rights, Media, Resources, Technology, The Chinese Identity, The construction of Chinese and Non-Chinese identities

Social conflict on the rise: top judge [China Daily]

Statistics from the SPC [Supreme People’s Court] showed that courts nationwide handled 295,500 labor dispute cases in 2008, a year-on-year increase of 95.3 percent. The figure jumped to 318,600 in 2009, up by 7.8 percent over the previous year.

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Social conflict on the rise: top judge
By Wang Jingqiong (China Daily)
Source – China Daily, published December 21, 2010

BEIJING – The country’s courts are expected to face an increasing number of cases involving social conflict next year, the country’s top court official said on Monday.

Wang Shengjun, president of the Supreme People’s Court (SPC), said courts will face more challenges next year in safeguarding people’s rights and balancing the interests of different groups, as social welfare conflicts become more common and severe.

Wang urged judges from provincial courts to fully understand the impact of “domestic conflicts, especially rising conflicts in the social welfare sector” and to make improving people’s livelihoods their top priority next year. Read the rest of this entry »

Filed under: China Daily, Chinese Model, Culture, Domestic Growth, Economics, Education, Environment, Honda Strike in Foshan 2010, Human Rights, Social

Tree orders up, profits down in China [Straits Times]

A sign of things to come – China as the world factory may not be able to keep its prices down for much longer. With the cost of labour in Shenzhen increasing by up to 30 per cent this year in response to the widespread protests for higher pay this year, ‘The Chinese clearly did not foresee the leap in wages and raw material prices that would eat into their profits, even when they had raised prices by 10 per cent this year. Mr Liao said that although he received 30 per cent more orders this year, his margin was wiped out by the 15 per cent rise in his 200 workers’ wages. ‘

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Tree orders up, profits down in China
By Lee Choo Kiong
Source – Straits Times, published December 19, 2010

Orders for artificial Christmas trees have picked up after the financial crisis, but their Chinese makers are not cheering.

To them, Christmas is blue this year as a stronger yuan and rising costs ravage their profits and threaten to shut them down.

The impact has been felt by over 200 factories in Shenzhen city, a key production base for the pine in southern Guangdong province, even though orders from Europe and the United States have spiked. Read the rest of this entry »

Filed under: Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Human Rights, Lifestyle, Population, Social, Straits Times

iPhone maker faces new criticism over China labour practices [The Age]

Market research firm iSuppli estimates that a 4G iPhone costs $US6.54 to make in China, or just around 1.1 per cent of its retail price, while Apple’s profits margins hover above 60 per cent. It is no wonder that labour practices are as such – it is not just a Chinese problem, it is a problem of those who develop, and those who consume these products. In the grander scheme of things, as we want things cheaper, better and faster, something has got to give. It is too easy to push the blame on the obvious targets. 60% profit margins?

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iPhone maker faces new criticism over China labour practices
Source – The Age, published October 13, 2010

Terry Gou, founder of Taiwan's Hon Hai Precision Industry company, the mother company of Foxconn, gestures during a shareholder conference in Tucheng, Taipei county, June 8, 2010. Photo: Reuters

Hon Hai, maker of Apple’s iPhone, faces new allegations of worker abuse at its sprawling China plants in two reports that claim conditions have not improved despite company promises after a rash of suicides.

One report, based on interviews with over 1700 workers by 20 universities in Hong Kong, China and Taiwan, criticised Hon Hai for long working hours, a “militaristic” work culture and mass employment of low-wage vocational college students and interns on production lines to cut costs.

Hon Hai and its Hong Kong based Foxconn unit, which make iPhones and iPads for Apple and goods for Dell and Hewlett-Packard among others, dismissed the report’s “unsubstantiated allegations” and said it treated and paid its workers well. Read the rest of this entry »

Filed under: 52 Unacceptable Practices, Culture, Domestic Growth, Economics, Education, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Influence, International Relations, People, Politics, Population, Social, Technology, Trade

Chinese university students investigate life on the factory floor [China Labour Bulletin]

The great thing about Hong Kong is, despite being under Chinese rule again, it has bandwidth to maintain its press freedoms. This is worth a read if you are interested in an investigation into life in China’s factory floors, and not the fleeting press reports that only cover the marco details. It raises questions on the interconnectedness of the global production networks, and a strong look at the Chinese psyche – have they softened? After all, their parents would have survived far worse – the Civil War, the Cultural Revolution and the Great Leap Forward combined.

“…The shift was 12 hours long nearly every day. Once you started, you hardly dared to think about the drudgery, but after you got into it, you found that you simply did not have time to let your mind wander. You were a machine. You just worked, and your brain did not need to be engaged at all, you just needed to carry out the same action repeatedly. That was all that was required.”

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Chinese university students investigate life on the factory floor
Source – China Labour Bulletin, published July 21, 2010

Chinese university students investigate life on the factory floor
During this year’s summer break, three students went “undercover” as migrant workers at a small shoe factory in Dongguan’s Houjie township. Their report, widely circulated in various forms on the Internet in China, details the pay and conditions of employees, the attitude of migrant workers towards employer abuses and their awareness of the law. It shows how the students tried to “raise the consciousness” of the young migrant workers at the factory and their frustration at their lack of success. The report also looks at the conditions at larger factories in the Pearl River Delta that pay more but also demand more from workers, and discusses the options available now to the younger generation of migrant workers, compared with their parents.

The essay reveals as much about the attitudes and values of young socially concerned urban intellectuals as it does about the subjects of their report, and as such provides insights into the 90s generation at either end of the social scale.

China Labour Bulletin has translated and edited Random Thoughts on Factory Life below. The original Chinese language report can be read here. Read the rest of this entry »

Filed under: 52 Unacceptable Practices, China Labour Bulletin, Chinese Model, Culture, Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Human Rights, Influence, International Relations, Media, Population, Social, The Chinese Identity, Trade

‘Made in China’ – but for how long? [China Daily]

An introspective piece that draws all the dots on China’s already present challenges (wages, Foxconn Suicides, the automotive strikes, et al) in staying as the world’s factory. Definitely worth a read as it sums up the significant events in the past year, plus the Chinese shift away from mere manufacturing to more all value activities. Is China’s global role as the most powerful mass producer over in just under twenty years?

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‘Made in China’ – but for how long?
Source – China Daily, published July 19, 2010

Editor’s Note:

The Chinese horn, or vuvuzela, buzzed throughout the World Cup, which ended a week ago, bringing resounding success to Chinese manufacturers and showing the overwhelming ‘Made in China’ power to the world.

Photo: China Daily

For the past decade and more, China has been the manufacturing workshop of the world. But rising labor costs may cast a shadow on the future of the ‘Made in China’ strategy.

‘Made in China’ faces vague future

Foreign investors considering relocating production

Strikes at Honda have also aroused concerns among foreign investors about labor unrest in China.

Two large US companies, Ann Taylor Stores, the women’s clothing retailer, and Coach, the luxury handbag maker, are poised to relocate production to countries, where labor rates are cheaper.

Mike Devine, chief financial officer of New York-headquartered Coach, which makes luxury hand bags, said at a conference recently a move was in the pipeline. Read the rest of this entry »

Filed under: Automotive, Beijing Consensus, Charm Offensive, China Daily, Chinese Model, Culture, Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Influence, International Relations, Politics, Social, Soft Power, Trade, U.S.

The cost of electronic gizmos set to soar [The Age]

I suppose this was bound to happen sooner or later. Global prices for much of these electronic gizmos are kept down thanks to cheap manufacturing costs in China but with the recent unhappiness leading to suicides and wage hikes, it will soon be much less profitable to make things there. I wonder how prepared China is for this. Is China prepared to move out of manufacturing? Or has it got the ability to squeeze water out of rock on this one?

“But what it does not reveal is that manufacturing in China is soon to become far more expensive. Soaring labor costs caused by worker shortages and unrest, a strengthening Chinese currency that makes exports more expensive, and inflation and rising housing costs are all threatening to increase sharply the cost of making devices like notebook computers, digital cameras and smart phones.”

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The cost of electronic gizmos set to soar
Source – The Age, published July 11, 2010

LAST month, while enthusiastic consumers were playing with their new Apple iPhone 4, researchers in Silicon Valley were engaged in something more serious.

They cracked open the phone’s black plastic shell and started analysing the new model’s components, trying to unmask the identity of Apple’s main suppliers. These ”teardown reports” provide a glimpse into a company’s manufacturing.

What the latest analysis shows is that the smallest part of Apple’s costs are in the southern Chinese city of Shenzhen, where assembly-line workers snap together things such as microprocessors from Germany and Korea, US chips that pull in Wi-Fi or cell phone signals, a touch-screen module from Taiwan and more than 100 other components. Read the rest of this entry »

Filed under: Culture, Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, International Relations, Media, Migrant Workers, Politics, The Age, Trade

No cheap labor? China increases minimum wages [China Daily]

This is the key – ‘officials hint cheap labor may no longer be considered China’s sole competitive edge.’

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No cheap labor? China increases minimum wages
By Uking Sun
Source – China Daily, published July 2, 2010

At least 18 provinces, including big cities like Beijing and Shenzhen, have increased the minimum wage by an average of 20 percent from Thursday as officials hint cheap labor may no longer be considered China’s sole competitive edge.

Jiangsu province was the first to increase its minimum wage this year, ushering in the beginning of a nationwide wave that will be followed by 27 provinces and municipalities by the end of this year, the First Financial Daily reported.

Sun Qunyi, an expert with Wage Research Institute at the Ministry of Human Resources and Social Security, said this round of wage increases is compensation to low-income workers since the global economic crisis froze wages in 2009. Read the rest of this entry »

Filed under: China Daily, Domestic Growth, Economics, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Lifestyle, Politics, Population, Social, Strategy

Why $106b (SGD) isn’t enough to keep China stable [Straits Times]

Perceptive piece that points out China’s annual expenditure on maintaining cohesiveness (read stability necessary for economic development) has been increasing at a rate faster than its growing armed forces. With 90,000 recorded ‘mass incidents’ and growing, China needs to pay attention inwardly to keep its people orderly.

“…the budgetary allotment for social stability went up by 16 per cent last year compared with 14.9 per cent for defence. The increases this year are 8.9per cent and 7.5 per cent respectively, which translate into 514 billion yuan and 516.6 billion yuan.

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Why $106b isn’t enough to keep China stable
To stem social unrest, Beijing should learn to watch less, listen more
By Ching Cheong, Senior Writer
Source – Straits Times, published June 11, 2010

WHAT price social stability? For China, it is spending 514 billion yuan (S$106 billion) this year to maintain cohesion in society. This amount is nearly 9 per cent more than that spent last year.

Beijing has upped this expenditure annually in recent years but so has the number of incidents of social unrest and other conflicts.

To break out of this vicious circle, China needs to change tack, according to a report by the Tsinghua University Social Development Programme released in April.

The report suggests that the Chinese government should revamp the political system to give more room for expression to those disenfranchised by the country’s rapid economic development.

The report is perhaps the first public acknowledgement that setting aside bigger sums of money for the purpose of maintaining social stability has not been effective.

The huge sum is spent solely on maintaining a security apparatus to keep people under surveillance and discourage travel to Beijing to lodge complaints.

Tellingly, none of this money to maintain social stability is earmarked for income distribution efforts – suggesting that for China, cohesion is viewed more as an issue of monitoring and suppressing dissent than one of proactive measures to bridge social inequalities. Read the rest of this entry »

Filed under: Chinese Model, Culture, Domestic Growth, Foxconn Suicides 2010, Honda Strike in Foshan 2010, Human Rights, Migrant Workers, Migration (Internal), Nationalism, Politics, Population, Social, Straits Times

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