Starting in mid April, about 40,000 footwear workers in Southern China walked off the assembly lines in a bid to force their employers to pay housing subsidies and social security contributions. The strike continued for two weeks before the government intervened at the end of the month.
Played down by the state-owned media, this was nonetheless the largest strike that China has seen in recent years.
The employer, Yue Yuen, “the world’s largest branded footwear manufacturer,” according to its website, is a Taiwanese company headquartered in Hong Kong. It supplies shoes and other products for international brands such as Adidas, Nike, Under Armour and Timberland.
The action is expected to cost Yue Yuen $60 million in 2014, including the direct cost of the strike and the increased payment to workers.
At the height of the strike, Adidas announced that it would be moving future orders elsewhere, in order to avoid an impact on its operation.
Nike’s CEO, Mark Parker said that Nike was still close monitoring the situation to see whether the factory was in violation of Nike’s workplace standards. “We want to invest in the partners that are really doing the right thing with the workforce,” Parker said at a CEO club in Boston.
The International Union League organized protests at Nike and Adidas stores in Tapei, Hong Kong, Istanbul, Los Angeles, New York and Melbourne. An organizer called Adidas’ behavior “typical” – in that they systematically moved their orders to factories with exploitative conditions.
In fact, Yue Yuen itself has been reported as shifting production lines to Southeast Asia in response to rising costs in China.
Meanwhile, Xinhua, China’s national news agency acknowledged that local governments may have also played a part in the workers’ discontent. To attract foreign investment, local officials sometimes allow corporations to escape payment.
Observers noted that the significance of the strike went beyond a labor-management conflict and pointed to more profound changes taking place in China. “In the longer term, the Yue Yuen strike could prove to be a critical juncture in the evolution of Chinese reform… a harbinger of China’s meaningful transition to a new economic model,” William Hurst, author of The Chinese Worker After Socialism, wrote in an op-ed for Al Jazeera.
Hurst also observed that workers requested welfare benefits instead of the usual call for pay rises or workplace security. He thought this showcased the close attention Chinese workers were paying to employers’ legal obligations.
The workers also proved to be technically savvy during the strike, using social media and the WeChat instant messaging service on their smartphones. This made it difficult for authorities to block communication channels.
“Before, we were naïve and always got tricked,” a 30-year-old immigrant worker from central China said. “Now we are learning to be smart.”
But exercising one’s bargaining power doesn’t necessarily guarantee a good deal.
“Since China’s economic reform in 1978, labor has flocked to industrial cities. Having seen and tasted the city life, today’s workers are strong to enough to voice their demands.” Shengbing Zhang, author of On Change Of Employment In The Process Of Globalization, told The Diplomat.
“However, in a globalized context, capital has more options, while labor has very few.” Zhang says.