China Comes To Another Crossroad
by Paul McGoldrick
Some months ago I was asked to give the keynote speech at an internal
technology conference of one of the major manufacturers in our analog space.
That seventy-five minute speech is not for public consumption because, among
other things and at their request, I shared with that company what I thought
were both its strengths and weaknesses. However, a very interesting story
came up this week and before I tell it I need to share a non-partisan part
of my speech, edited to make the points that matter here.
I had been talking about various items concerning Taiwan, and then said:
"The other problem for Taiwan, of course, is across the Taiwan Strait. If you live on the mainland you call it the Formosa Strait because you don't recognize the existence of the separate nation of Taiwan. In fact, only the Vatican now recognizes Taiwan as an independent state.
"When I was a kid we called the island of Formosa "China." That's what the politicians decided we should all do because we didn't want to recognize that nasty ultra-socialist regime on the mainland. The communists were responsible for the "Police Action" that the United Nations had to undertake in Korea; they were not to be trusted, not to be tolerated. We somehow were actually supposed to regard them as sub-human, a feeling that certainly continued into the Vietnam War.
"But the goods we got back then were marked "Made in China" and came from Taiwan. And, pre-Wal-Mart, it felt good to jab the communists by buying Chinese. Now China means The Peoples' Republic of China and it is probably as well to remember that every now and then. We are dealing with a country that is run by very few with powers to repress its people, which it uses. We all too easily accept that the country is apparently a fabulous market opportunity -- because we are continually told that -- and for most of the time we choose to ignore the negatives of the manner in which the poorest are treated and how the rich get very much richer.
"I'm not hear to spout political or to wax on about how there needs to be more equal treatment of the people as a whole, but the manner in which China is run is very significant for our industry in the near and long-term future.
"The relationship of China and Taiwan is crucial to our industry. I for one, believe that unless there is incredible provocation China will make noises and take no military action against Taiwan. From a world point of view it would be unacceptable, and for China to own the future it wants, it needs to cooperate to at least some extent. The Taiwanese fabs that are being built on the mainland require expertise that is not available from the locally educated, as yet. When the training becomes local enough that Taiwanese skills are not required the role of those fabs will be to feed the export market and, increasingly, the products and people involved will become more sophisticated and less parochial.
"It's a kind of diversion, I know, but when I was teaching at college in the UK a question came up which was left for faculty to decide upon. We had been asked by the South Africa Broadcasting Corporation if we would educate a group of their engineers in color television engineering principles and practices. Most of us abhorred Apartheid but we figured that if SABC converted to color television they would have to get their programming from somewhere, and with limited facilities of their own they would have to import most of it. The exposure to American and British programs was, we felt, a way of making the whole South African population realize that there were other ways of living. Did it make a difference? I have no idea, but we certainly did nothing to support Apartheid.
"In the same way, as more and more of the population of China is exposed to the West, to Western ways and freedoms, there will have to be changes in the communist methods of ruling. This is even being helped with satellite TV services. There may be an old guard that resists, but it cannot survive. I couldn't even guess at a timeline for change but when it does happen it will be very sudden and may well be accompanied by violence. The biggest city in China, Shanghai, has already shown signs of wanting to do things differently. Beijing has told them to behave and so far they have done so, but that will not be the case forever. Even the languages of China are in danger of collapse with English dominating communications, including the Internet."
Maybe that collapse is already starting to happen…
A news report from Tim Johnson (Knight Ridder News Service) from Dongguan, China, was picked up by only two newspapers that I can identify, The Oregonian and The Detroit Free Press (which incorrectly identifies Johnson as one of its overseas correspondents). The story details how workers in the Pearl River Delta of Guangdong Province are walking away from jobs because they are not being paid enough and because the conditions under which they are expected to work are unacceptable. They talk of unpaid wages, injuries in the workplace, filthy and overcrowded dormitory conditions, and lousy food programs.
The Pearl River Delta has been, for the last decade, the fastest growing area on the planet. It is now home to more than 30 million workers. The vast majority are migrants who have left farms and other rural activities to upgrade their lives from earning an average of $320 a year to the legal minimum wage in the factories of $55 a month, doubling their income. That is still less than the average earnings of the urban population of the country, which is $1020 a year, but to earn higher amounts you have to have, under the hukou system, a residence permit -- obtained either by birth or by bribery. Without that valuable residence permit you can be sent home and you lose out on side benefits and social security programs.
A number of migrant workers do not return any more from Chinese New Year celebrations back in their home villages and, it is thought, workers write back home to tell of the virtual slavery they are having to endure: giving the cue to others not to come and face the same thing. There is also enormous pressure on the only child (by law) of many village families to stay at home to look after the farm or business while the workers needed by the labor market still keep growing.
The numbers are staggering. Estimates of unpaid wages sit at $12.1 billion; an average of 120 hours forced overtime a month; wages of less than the legal minimum; factory owners leaving millions of dollars on the gambling tables of the decaying casinos in Macao.
[Equally revolting is the thought of the following news item from the China Daily that tells us that there are only 43 public toilets in the 100 square km of Dongguan, but that another 76 are going to be erected "to help ease great pressure." That will provide 3 public toilets in every square km…]
It is not that there are no labor laws in the PRC. This is a communist state, for heavens sake, although the expression used is "building socialism with Chinese characteristics." The main trade union group is the All China Federation of Trade Unions (ACFTU) and it does actually seem -- for the most part, when you get past the rhetoric -- to be pro-labor. They recognize that there are 130 million migrant workers in China (10% of the population) an increase from the 15 million in 1990. The law mandates that any business with more than 25 employees must be allowed to organize themselves, or join a union. In practice, within the 2 million domestic companies only 40% have allowed unions in; and in transnational companies, that number 400,000, only 20% are allowing union activities. The likes of Wal-Mart are included in that number.
Apart from the workers rejecting the conditions and pay being offered - and virtually every factory in Dongguan has a vacancy flag flying outside - how do the businesses get away with not allowing the unions in? Local corruption, of course, with officials paid off to look the other way. Between the Central Committee of the Communist Party of China and those local officials there are five levels of bureaucracy, and five levels of corruption.
Everyone in China is equal but, in Orwellian fact, some are much more equal than others. But the chinks in the armor are starting to show. And signs of good government are twinkling with the fabulously cosmopolitan city of Shanghai, for example, rejecting a building permit for Wal-Mart because of its stance on unions.
Things are in change in the PRC. We hope that it can continue to change
peaceably. And remember the work conditions you are supporting in Guangdong
Province when you pick that toy off the shelf in your local Supercenter
Store.