Friday, October 13, 2006

China at a Crossroads

This article at the New York Times gives us a snapshot of a conflict going on in China between the free market and organized labor. [NYT 10/13/06 David Barboza, "China Drafts Law to Boost Unions and End Labor Abuse"]

[Thanks to for the image.]

Excerpts, with my bracketed comments:

"China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers’ rights by giving labor unions real power for the first time since it introduced market forces in the 1980’s. [China has one labor union, the All-China Federation of Trade Unions, the Communist Party’s official union organization.] American and other foreign corporations ... have lobbied against it by hinting that they may build fewer factories here. It would apply to all companies in China, but its emphasis is on foreign-owned companies and the suppliers to those companies.

"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. [See my article for a description of this type of fiasco.] ... The Chinese government proposal, for example, would make it more difficult to lay off workers, a condition that some companies contend would be so onerous that they might slow their investments in China.... The proposed law is being debated after Wal-Mart Stores, the world’s biggest retailer, was forced to accept unions in its Chinese outlets.

"On Friday, Global Labor Strategies, a group that supports labor rights policies, is expected to release a report in New York and Boston denouncing American corporations for opposing legislation that would give Chinese workers stronger rights. [The New York Times couldn't resist looking immediately for an American defense of the European model, of course.] 'You have big corporations opposing basically modest reforms,' said Tim Costello, an official of the group and a longtime labor union advocate. 'This flies in the face of the idea that globalization and corporations will raise standards around the world.' [When will they get it? Because:]

"Until now, ... existing Chinese labor laws have gone largely unenforced, which has further complicated the debate here. Opponents of the proposed law argue that enforcing existing labor laws would be enough to solve the country’s nagging problems. Advocates respond that adopting new laws would set the stage for stricter enforcement.... [B]y the 1980’s, when the old Maoist model had given way to economic restructuring and the beginning of an emphasis on market forces, China began eliminating many of those protections — giving rise to mass layoffs, unemployment, huge gaps in income and pervasive labor abuse."

It will be interesting to see which tack the Chinese adopt in response to this pressure. If I could be a flea in the appropriate person's ear, I'd warn them to try to avoid the European labor model, in favor of a more open and responsible enforcement of reasonable and perhaps revised labor laws. ["Bzzz Bzzz."]


Blogger its mortgage magic said...

It is very scary that china is going threw an industrial boom right now. I wonder if they will end up as capitlast or keep there flag flying the same as they are. Cody

2:30 PM  

Post a Comment

Links to this post:

Create a Link

<< Home