Growing Labor Unrest Roils Foreign Businesses in China

INDUSTRIAL tragedies and labor disputes are stirring tensions between Chinese workers and their foreign bosses.

In November, at a toy factory run by a Hong Kong businessman in the southern special economic zone of Shenzhen, more than 80 women died when fire raged through the plant, trapping them behind barred windows and blocked doorways.

Less than a month later, 60 workers died when fire swept through a Taiwanese-owned textile mill in Fuzhou, capital of Fujian province.

Chinese officials and analysts say the accidents stem from abysmal working conditions, which, combined with long hours, inadequate pay, and even physical beatings, are stirring unprecedented labor unrest among China's booming foreign joint ventures.

In recent months, newspapers have carried numerous reports of abuses against Chinese workers, who were beaten for producing poor quality goods, fired for dozing on the job during long work hours, fined for chewing gum, locked up in a doghouse for stealing, and who went on strike to protest low pay.

The tensions reveal the great gap between competitive foreign capitalists lured by cheap Chinese labor and workers weaned on socialist job security and the safety net of cradle-to-grave benefits.

Chen Ji, a researcher at the All-China Federation of Trade Unions (ACFTU), calls the labor dissonance in some foreign joint ventures ``alarming'' and predicts the problem will grow with the number of foreign investors. ``China doesn't have a sound legal system and no labor law. So there is no mechanism in which workers can talk to owners through negotiation,'' Mr. Chen says.

``In the past two years, we've seen an increase in labor disputes in joint ventures .... The owners are often petty capitalists who don't have much money and are against having unions in their joint ventures,'' Chen says.

In one of the world's last self-proclaimed proletarian states, the new problems are further roiling an already unstable Chinese labor scene. Despite market reforms, the government has yet to deal with the millions of workers who will have to be laid off to streamline unprofitable state companies.

In addition, the Labor Ministry reports that in the next decade China will have to find jobs for 68 million new urban workers and 210 million rural people.

The report also indicates that China has been hit with a sharp rise in industrial accidents, which more than doubled during the first eight months of this year compared to the same period last year. More than 11,000 workers were killed in the accidents, which were blamed on violations of safety regulations. The government has called for stepped up protection for labor to curb the outbreak of wildcat strikes in some foreign-owned factories.

According to Chinese press reports, the number of labor disputes in foreign ventures has almost doubled this year in Shanghai, and in the industrial city of Tianjin, Japanese and South Korean-run companies have been hit with labor protests over poor working conditions. According to a recent report in Legal Daily, a national newspaper, the problems are particularly troubling in Guangdong and Fujian provinces, engines in China's booming economy.

Although the government requires China's 40,000 foreign-funded enterprises to establish unions, only about 1 percent have done so, according to Labor Ministry figures.

The situation is tricky for Chinese officials who lure foreign investment with promises of cheap workers and then worry that a tough labor stance will deter badly needed overseas funds.

``Workers ... are masters of the country and, as such, their political status and legitimate rights and interests are protected by the Constitution and law,'' says Zhang Dinghua, vice-chairman of the ACFTU, as reported by the New China News Agency. Unions ``must support foreign-funded enterprises in their legitimate management and business operations, but on no account must they waver in their work to protect the legitimate rights and interests of the employees.''

But Western businessmen and observers suggest the government has ulterior motives in pushing unionizations. They say it is a means to exert more inside influence over foreign joint ventures, which enjoy broad economic freedoms under market reforms.

By establishing official unions, the government also wants to preempt informal labor organizations that have cropped up to deal with workers' grievances and pose a challenge to the Communist grip over China.

Some Western businessmen worry that worker resentment against their foreign bosses could easily spin out of control and trigger a new antiforeign wave in the country.

``On the surface, Chinese say they welcome foreign investment, but under the surface they are resentful,'' says an American businessman. ``The government feels it has lost control of the foreign enterprises, and it is using this union thing to regain control. Tensions are running very high.''