China'S Labor Force Is No Longer Cheap In June 13Th?

If Li Xiaojuan's wishes are satisfied, then the rest of the world can no longer assume that China's labor force is cheap.

The 20 year old is Foshan Honda Auto Parts Manufacturing Co (Honda).

Automotive Components Manufacturing, a female worker on the production line, is also one of the few workers who have made public appearances in the labor movement late last month.

During the strike that caused Honda to stop working in the factory for a whole week, Li Xiaojuan sent an open letter on behalf of the 16 people negotiated by the workers.

"Our employees should maintain a high degree of solidarity and avoid being differentiated by the management," the letter appealed.

"We know that our factory makes one billion profits every year, which is the result of our labours.

Our struggle for rights is not only for the interests of 1800 employees of our factory, but also for the rights and interests of workers throughout the country.

As a result of the strike, Li Xiaojuan and her colleagues basically increased their monthly salary by 25% to 1900 yuan (280 US dollars).

This victory encouraged Honda's workers from two other suppliers in Guangdong to follow suit.

Despite the steady increase in wages in recent years (only a brief interruption during the global financial crisis in 2008-09), the successful labor action shows that workers are now preparing for a two digit raise.

This raises a broader question: is the manufacturer now facing a threat based on the lucrative profit margin of seemingly cheap Chinese labor force?

For the time being, economists say that although China is a part of the production chain for many consumer goods in the world, the value added by Chinese factories is actually very limited, which seems to indicate that the impact of rising costs on consumers will also be limited.

Although China's production capacity is stronger and stronger, most of its output still depends on low value-added assembly.

Pedersen Radi, Peterson Institute for International Economics, Washington, D.C. (Nicholas) (Nicholas), Institute

Lardy said: "for the vast majority of Chinese exports, especially consumer electronics, the consumers at the end of the supply chain will hardly be affected."

He added that labor costs generally account for only about 5% of the retail price of electronic consumer goods, so even if Chinese workers raise 30%, the impact will be negligible.

But this is not to say that labour disputes have no consequences.

Tim Laurence, PA Consulting Group, UK (Tim)

Lawrence said that if China had a growth time labor dispute and disrupted the supply chain, its destruction might be no less than the rise in wage costs.

"For those companies that have only one supplier in Asia, the damage will be much larger than the cost increase," he said.

"If I were in such a situation, I would have doubts about the firmness of the supply chain."

Other suppliers in the supply chain industry say that the beneficiaries of this shift in thinking include some low-cost economies with good technological infrastructure such as Russia, Vietnam and parts of North Africa.

Stefano Bell Tassi (StefanoBertasi, International Chamber of Commerce) said recently that some European companies have moved outsourced businesses closer to home because of concerns about reliability and quality (not cost).

In China, labour activists are encouraged.

"I am glad to see more workers know how to protect themselves and dare to express their thoughts," Huang Weimu said.

He was undercover in some factories in Foshan, recording all kinds of misconduct of the factory.

Liu Feiyue added, "government officials raise salaries every year, but most workers in Guangdong earn only about 1000 yuan a month.

Considering inflation, this is not enough.

There is no set of perfect labor rights protection system.

In spite of the impact on a major multinational company, Honda strikes are unprecedented, but Foxconn's (Foxconn) focuses on the growing anger among Chinese workers.

The world's largest electronics manufacturer has been shocked by a series of high-profile suicides in Shenzhen's industrial park. Foxconn's customers include Apple, DELL (Dell) and HP (HP).

Last month's latest tragic incident prompted the chairman of the group, Terry Gou (Terry).

Gou) rushed to the factory to try to pacify 270 thousand employees and defuse the public relations disaster.

Foxconn then announced that it would double its wages by 3 months' probationary period.

The large scale Foxconn factory in Shenzhen, coupled with strict human resource management, has inhibited independent trade union activities.

"The place is almost militaristic and somewhat scary," said a Foxconn customer, a Hongkong businessman who had visited the park.

As for Terry Gou, he has promised to create a friendlier and warmer corporate culture, so that workers can no longer feel that they can get a decent salary only by working overtime for a long time.

This is what is happening in Honda's three strike affected factories.

The number of employees in the three factories is no more than 2000, making it easier for workers to quit the all China Federation of trade unions and organize themselves.

Beijing has chosen to remain cautious and allow local officials and Federation of trade unions to deal with factory strikes one by one.

In May 31st, representatives of the Federation of trade unions in Honda pmission factory could be identified from their yellow baseball caps - a physical conflict with their uniformed employees.

The spectacle of burly trade union representatives pushing the children of Chinese peasants is unforgettable.

Officials of the Foshan Federation of all China Federation of trade unions rejected requests from reporters for repeated requests for comment.

However, representatives of the Federation of trade unions failed to stop the momentum of Honda workers.

Labor action began in May 17th at Li Xiaojuan's pmission factory.

1 weeks later, as Honda's joint venture vehicle factory in Guangzhou and Wuhan was forced to shut down, strike action began to receive the attention of the international community.

In this respect, this is a challenge to the two sides of the Chinese government and Honda: Honda's joint venture partners are state-owned enterprises.

The strike of the pmission factory was resolved in June 4th, and Honda resumed.

But just 2 days later, another worker in Foshan's exhaust parts factory announced a strike, forcing Honda to stop production again.

This reflects the characteristics of the interconnection and overlap of the automotive supply network.

In June 9th, a few hours before workers and management of second Foshan factories and management were about to reach a temporary agreement, workers at a Honda factory lock factory announced a strike.

There is no indication that the actions of these factory workers are coordinated.

If there is a dynamic co-operative action, it is bound to attract the suppression of the central government. The Beijing side allows independent protests (indeed strikes occur frequently throughout the country), but will not allow any large-scale organization to act.

The recent events of Honda and Foxconn have also made other strike operations which are not attracting attention at home, let alone the global media, also become the focus of attention.

In June 6th, Taiwan audio electronics manufacturer Merlot industries (Merry)

Electronics) a brief strike was held at the factory in Shenzhen.

2 days later, there was a clash between police and workers at KOK International, a Taiwanese capital plant in Kunshan.

However, workers understand the strike of other factories through official media reports, blogs and Internet chat forums.

After the first strike in Guangdong, the newspapers in Guangdong were initially allowed to report.

After the strike reached the white hot stage, most of the media outside the pmission factory were local media.

Although their reports were eventually stopped, the union spirit who released the magic bottles failed to return.

"Unity is strength and resistance is hope," wrote a Book mechanic worker in a petition.

"Far from last year's year-end awards, near Honda, Foxconn, this is our example and strength."

Although Chinese workers have recently demonstrated their bravery, they are fully aware of the danger ahead of them as the workers movement enters a new stage.

During the mass rally, many Honda strikers covered their faces with masks and did not want to reveal their full names.

Even Li Xiaojuan, an independent worker representative of the pmission factory, refused to accept face-to-face interviews.

She said that the wage agreement with the management included a guarantee that no media interviews were allowed.

"We are busy with production now," she said.

"But everyone should protect their rights. Sooner or later, we will start our own independent trade union."

Like the small guerrillas, the employees of Honda pmission factory are likely to keep a low profile -- at least until next year's wage negotiations.

But they have encouraged workers across the country, and many argue that they have helped the government in the process.

"I think there will be more strikes," said Liu Feiyue, a people's livelihood observer.

"But these strikes do not undermine social stability.

On the contrary, they are the way for workers to vent their anger.

Only when the government tries to restrict these acts will it threaten social stability.