Labor’s Opening to China

The announcement in December by the International Trade Union Confederation (ITUC) that it would begin a “dialog” with the All China Federation of Trade Unions (ACFTU) marks a sea change in global labor’s approach to China.  Equally significant is the endorsement of the talks by the AFL-CIO.  Until now, the ITUC, the AFL-CIO, and most national labor federations shunned official contacts with the ACFTU—China’s sole legal union—because they did not consider the party-state controlled organization a legitimate representative of China’s workers. 

But, according to Guy Ryder, the ITUC’s General Secretary,

“By starting a dialogue with the Chinese trade union, ITUC wants to have more influence on the ground in China….It should enable us also to discuss the role of China in the world.”

The action actually caps a gradual shift toward engagement with China by unions from around the world. Some European unions affiliated with the ITUC have been active in China for over a decade. The Change to Win federation in the US began talks with the ACFTU last year. Officials have exchanged visits and plans are underway to expand contacts in the coming months.

The policy shift by the ITUC, the AFL-CIO, and other global unions is long overdue. Three decades of rapid economic growth have transformed China from an economic backwater into the world’s workshop.  Workers, trade unions, communities, and countries throughout the world are confronting the challenges posed by China’s growing role in the world. Today, about 25% of all the workers employed in the global economy are Chinese.  The “China price” sets the global norm for wages and working standards up and down the value chain, from inexpensive garments to sophisticated electronics.  As a result the hard-won gains of workers in the global North are being rapidly undermined, while the aspirations of workers in the developing world are being dashed, as China becomes the wage setting country in industry after industry.

China’s export oriented development model has had a particular impact on trade unions everywhere. Multinational corporations—the very firms that employ millions of union members around the world—have flocked to China seeking to take advantage of its low wage workers and business friendly policies, reducing labor’s bargaining leverage and the number of union jobs. These firms have been central to China’s development. Roughly 66% of the increase in Chinese exports in the past 12 years can be attributed to foreign owned global companies and their joint ventures. (Stephen Roach, Business Times, Singapore, 8/8/06) These companies account for 60% of Chinese exports to the US. Despite all of the talk in the current presidential campaign, the “Chinese threat” is less about trade with China than it is about “trade” with US based companies like Wal-Mart, GE, or any of the other of the hundreds of Fortune 500 companies that have set up shop in China to cuts labor costs and avoid environmental regulations. Ways, however imperfect, must be found to reach out to Chinese workers to find mutually acceptable ways to halt a global race to the bottom, which in end, hurts all workers.

Taking stock of the ACFTU

The ACFTU is a vestige of China's old command economy when it served as part of the administrative structure in the state owned enterprises that employed most Chinese workers. In that period, the union played a role similar to an old fashioned company union in the US in the early part of the 20th century, providing some benefits and services and smoothing over some of the rough edges in the employment relationship. But its main goal was to keep the enterprise running smoothly as defined by managers and state planners.  

When China’s economy changed and private corporations became the driving economic force the union did not change.

At the enterprise level, where the union has any presence at all, it generally still functions like a company union. In fact, while owners and senior executives are forbidden by law to hold union office, managers can and often do hold office, undermining the likelihood of effective representation. A recent survey in the city of Guangzou in Guangdong revealed that the overwhelming majority of union officials were also managers. And where workers elect local officers, the candidates are nominated by the ACFTU hierarchy. Perhaps this is the key reason why the ACFTU has earned a reputation for siding with management in workplace disputes.

At the regional level union officials are independent of corporate management, but directly under the control of local state-party officials whose primary goal is to promote economic growth. Thus, the career prospects of union officials tend to be tied to meeting economic growth targets in the region. Promoting workers interests is generally a secondary concern.

At national level the ACFTU is part of the party- state apparatus and which exercises over-all control. But here there are contradictory and complex forces at work. One the one hand the State represents the interests of the political elite and of foreign and domestic capital—partners in China’s development model—on the other hand, the state must maintain industrial peace and social stability by setting some minimally acceptable wage and employment standards.  The ACFTU plays a role in negotiating and enforcing these standards. This process produces tension that is familiar to workers and their organizations everywhere.

By virtually all accounts the ACFTU has done a poor job representing China’s workers. China’s working class—especially those employed in private industry—labor for low pay and work long hours. Occupational injury rates are the highest in the world. Labor laws go unenforced and workers are regularly cheated out of their wages. One consequence is that China has one of the most unequal distributions of wealth in the world.  And all of this, by the way, is regularly reported in the Chinese press. 

This legacy raises serious challenges for those about to open talks:

·         that agreements with the ACFTU could legitimate company unionism and sweetheart contracts signed between the ACFTU and employers, including foreign owned firms;

·         that dealing with the ACFTU could undermine growing grassroots activity focused on improving wages, working conditions, enforcement of labor law, and the promotion of new laws;

·         that the talks could sidetrack efforts for a genuinely global fight for worker rights by focusing on institutional relations rather a substantive fight for real labor and employment rights;

·         that the talks could be used as ammunition in domestic politic fights as China increasingly becomes a lightning rod for concerns about globalization.

Processes of Change

While these challenges are real, processes are at work that are pushing the ACFTU to become a more effective representative of China’s workers.

1. There is growing pressure from below.   In the absence of effective unions, Chinese workers have taken things into their own hands.  Wildcat strikes and protests have become commonplace.  According to a recent report by Global Insight, "unofficial figures suggest a sharp escalation in labor unrest `-``--from groups unaffiliated with the [ACFTU]....Wildcat strikes, often involving over 1,000 workers and staged in protest at low pay and poor working conditions, are reported to be running at more than one a day." (Claire Innes, Global Insight, February 19, 2008) These strikes are tolerated by the state as long as they are limited in time and involve a single workplace. In addition, there is a small but growing grassroots workers’ movement aimed at promoting worker rights especially among China’s huge internal migrant working class. This pressure from below is having an effect: there are signs that the State is pushing the ACFTU to be more assertive in confronting the worst aspects of the sweat shop sector in order to preserve social stability and head off any challenges to the state-party hegemony.
2. The implementation of China’s new draft labor law opens the potential for changing the relationship between the ACFTU and Chinese workers. The law gives new rights to workers and new bargaining tasks to the union.  There has been a great deal of controversy in China about the law’s implementation; some efforts are underway to weaken the law through legislation. But the union strongly backed the new law and has pledged to see that it is enforced. Global unions can help in this effort by exposing efforts by foreign based firms to avoid or evade the law.
3. There are advocates of change in and around the ACFTU. There are signs that the ACFTU is seeking some independence from tight control by the state and the corporations. For instance, in Guangzhou, at the urging of local ACFTU officials, an ordaniance was passed and became effective on January 1, 2008, banning managers from holding union office. And in Hebei a new rule promoted by the regional government to promote collective bargaining will require, among other things, democratic elections for worker representatives to bargain in workplaces without a union and more input by workers in the selection of union representatives in workplaces with a union. Progressive academics and lawyers allied with the ACFTU are pushing for stronger trade union laws and reforms that would empower workers at the workplace and open up new possibilities for more democratic representation within the union.
4. The ACFTU is seen by some advocates of democratization in China as a potential school for democracy. As an authoritarian society China has had virtually no institutions in which people could participate in any other way than fulfilling the mandate of the rulers. Some democracy advocates see the union as a potential venue to learn the nuts and bolts of building and sustaining an organization. This may be even more necessary for newcomers from the countryside with little or no experience in industrial society. Global unions could offer support and training in trade union organizational development.

Immediate Agenda

When representatives of the ITUC sit down with representatives of the other labor movements the initial focus of the dialog is likely to be trust and relationship building around shared interests. An immediate shared interest is the role of multinational corporations in China and in their countries of origin.    

The struggle to enact China’s new Labor Contract Law could provide a model for what future cooperation based on mutual interest might entail. Inside China the ACFTU and its allies pushed for passage of the law against both foreign and domestic opposition. Outside China unions from around the world mobilized to denounce lobbying efforts by global corporations to weaken the law. This tacit cooperation contributed to the law’s passage.

A similar campaign to track the law’s implementation could serve as a trust and relationship building effort. Each side has an interest in seeing that the law is properly implemented and each side brings something important to the table. The ACFTU brings its muscle with Chinese authorities charged with enforcing the law. The ITUC and its affiliates bring their capacity for mobilizing public and political pressure outside China to ensure that foreign companies to comply with the law.

Such a campaign could initially focus on foreign based firms and be built around the provision in the new law that requires that each worker receive a contract and that the companies bargain with employee representatives to set a wide range of company policies and procedures. US and EU companies could demonstrate compliance by:

·         making the templates of employee contracts available;

·         making company policies and how they were written public;

·         making instructions to suppliers on compliance with the new code public;

·         reporting on what they are doing to insure compliance and open the process to international union monitoring.

A second area of cooperation could be a project on corporate transparency. Foreign corporations in China operate through complex and highly secretive supplier chains. This secrecy makes it hard to get accurate information about what’s really going on in China’s economy and its workplaces. This is a big problem for unions that need information about the companies they bargain with and the industries within which they operate. It’s also a problem for consumers who need to know about product safety and regulatory standards—as  recent scandals involving contaminated pet food, toothpaste, and children’s toys make clear—and for environmental organizations, human rights advocates, and other watchdog NGOs—all of which play important roles in the civil societies of the industrialized world. The flow of information back and forth will be a good measure of the burgeoning relationship.

A third area of cooperation could be a project to address the issue of greenhouse gas emissions and climate change. The US and China lead the world in greenhouse gas emissions. Cutting back will change the way work is done in both countries and around the world. Trade unions everywhere are scrambling for solutions at the workplace, national, and global levels. Establishing a global regime to reduce emissions can either result in conflict or cooperation. The ITUC, the AFL-CIO, Change to Win, the ACFTU, and other global labor organizations can play a key role by cooperating to design worker friendly responses.  The economies—and the greenhouse gas emissions—of the US and China are bound together creating a common interest in the search for solutions. New studies show that China’s emissions are increasing much more rapidly than previously thought, although on per capita basis they still fall far short of the US. Since a large proportion of Chinese industrial growth is actually controlled by US and other foreign corporations, a large part of the greenhouse gas emissions in China is the responsibility of those corporations and their subsidiaries , suppliers, and ultimately, to some extent, US consumers . As Oak Ridge National Laboratory statistician Greg Marland, who is charged with tracking global carbon emissions, told National Public Radio recently,

“A significant fraction of emissions from China are to produce goods that will be consumed in the United States. So it's wrong … to point fingers at individuals or individual countries. We have to recognize that we're all in this together…"

Just as world attention has recently focused on the role of global corporations in lobbying against new rights for Chinese workers, so those corporations can and should be held accountable for their contribution to China’s growing carbon footprint.

The Strategic Horizon

A major stumbling block between the ACFTU and other labor organizations has been the relationship of the union to the Chinese state.  It is after all a state controlled union with a pro management history.  The truth is, however, that labor movements throughout the world are entangled with government and law and the degree to which this affects organizational behavior is contested terrain everywhere. A more appropriate question in evaluating the worth of any union should be on what rights its members possess and how it carries out its role under recognized international labor standards.  Since unions function within the constraints of a broader legal framework many rights are contested and aspirational, but there are some standards that need to be met if the ACFTU or any other union is to effectively represent it members.  Achieving these rights should be on the strategic horizon of any relationship between the ACFTU and global labor.

As the relationship deepens the ITUC and other labor organizations should aim to enlist the ACFTU in a campaign—which could begin in foreign firms and their suppliers—to accept the following standards, all of which we think are currently permissible under present Chinese law.

·         The right to elect union officials and representatives nominated by workers themselves.

·         The right to ratify contracts.

·         Protection from reprisals by management or union officials or government or vigilantes for carrying out legitimate union activities such as collective bargaining or grievance handling. 

·         Resources to maintain a functioning union at the local and industry level. This includes training and time off to conduct union business.

·         Expansion and enforcement of the duty to bargain by employers to achieve genuine collective bargaining.

·         No firings for strikes or protests. There is no explicit right to strike in China, but tens of thousands of strikes occur each year.

Foreign firms and their suppliers should pledge to bargain in good faith, respect the right of workers to refuse to work when bargaining breaks down, and to not call the cops to end stoppages. 

The ITUC, the ACFTU, and CtW, have already taken the first step down the road to global cooperation by agreeing to a dialog. If they can take the next step—building trust through information sharing and joint campaigns around matters of mutual concern—they will be well on their way to taking the concrete steps needed to resist the race to the bottom for the mutual benefit of workers everywhere.

M.O.

Comments

[Steve Diamond]

What is the evidence that the AFL-CIO has endorsed talks with the ACFTU? There is no record of this that I can find on the AFL-CIO website. I believe their official policy is still that the ACFTU is not a legitimate trade union but a state entity. Just because Andy Stern has sold out the American and Chinese labor movement by sitting down with the butchers of Beijing does not mean the AFL-CIO has, or should.

[Adam Goldsztajn]

A very misleading title, which somehow equates engagement with party bureaucrats as the key to engaging with workers in China.

What this article fundamentally fails to do is critically examine why so many other labour organisations have failed to gain anything from engagement with the ACFTU over the last decade or so. No mention of the European or Japanese failures of engagement.

This article fails to address how precisely engagement with the ACFTU will lead to workers in China being able to organise and represent themselves against capital.

There is no mention of the thousands of workers who are held in prison for organising and demanding labour rights.

The images from Tibet give a clear indication of the limits to dissent in China. No whitewashing of this is possible. No internal "change" inside party-controlled organisations is going to deliver real trade union rights because these organisations are congenitally designed to suppress and limit workers.

Most importantly, this article fails to engage with those arguments which show that bringing solidarity to workers in China through methods other than engagement with the ACFTU delivers far more.

Finally, celebrating the ITUC's policy shift on the ACFTU is a dismal indictment of the desperate weakness of the ITUC itself, bereft of ideas in how to generate real social change.