DOES AN ONGOING WORKER STRIKE SIGNAL A TURNING POINT IN CHINA’S HISTORY?

In hindsight: Shenzhen’s unprecedented economic boom has also resembled a familiar pattern of capitalist development.
“We want a real union. Release the Jasic workers immediately.” August 2018. Credit: www.inmediahk.net

by Andrew B. Liu

If you are interested in better understanding the economic rise of China , then the one city you should learn about is Shenzhen (roughly pronounced “Shun-Zun”). It is located within the Pearl River Delta in the south of the province Guangdong (“Canton”) and, most importantly, across the Victoria Harbour from the mega-capitalist city-state of Hong Kong, now increasingly under jurisdiction of the People’s Republic of China.

You may not be familiar with Shenzhen, but it’s likely where your iPhone, Macbook, or any one of a number of consumer devices was made. Specifically, the Taiwan-based company Foxconn Technology, the largest private employer in China, has shared a tight relationship with Apple as its primary hardware assembler for a decade. The inner workings of the Foxconn factories are shrouded in secret, but earlier this decade, they came under scrutiny from journalists and human rights groups, as details of worker suicides began to circulate abroad. Apple even issued a statement in 2010 condemning poor work conditions, vowing to help fix the problem.

But more than just a human rights cause célèbre — or a way to debate the course of China’s economic future — the visible social tensions within Shenzhen’s factories may help us mark off the limits of the past forty years of spectacular, albeit uneven, development in Chinese history.

Map of China with inset showing Shenzhen. Image credit: www.blooloop.com

This past July, workers at a welding parts company called Jasic Technology attempted to create a formal enterprise-level union; in response, their bosses fired them. Since then, protestors and sympathetic students have faced off against Jasic management and the police in a back-and-forth pattern of protest, arrest, release, and more protest.

The particular grievances include wage deductions, non-payment of benefits, and an oppressive work schedule without holidays and breaks. One worker claimed Jasic even monitors them while they use the restroom. It is important to recognize that the Jasic strike is the latest in a decades-long pattern of increasing worker actions in the Asian country most casual observers identify as the next great global economic powerhouse. In 1996, the Chinese government recorded about 48,000 labor disputes; in 2015, the number reached over 813,000. If things are going so well in China, then why are so many workers and students so unhappy?

Shenzhen skyline, September 2011. Credit: SSDPenguin, Wikimedia commons.
The Jasic strike is the latest in a decades-long pattern of increasing worker actions in the Asian country most casual observers identify as the next great global economic powerhouse.

Shenzhen is the largest and fastest-growing urban civilization in human history. Formerly a rural county known as Bao’an, it was officially deemed one of China’s four new Special Economic Zones (SEZs) at the end of the 1970s, part of a bundle of market reforms to promote economic growth. Few things can better convey the city’s shocking transformation than looking at some before and after photographs. Shenzhen itself has a population of about 12.5 million — about 50% more than New York City — and the greater Pearl River Delta is home to 60 million, the world’s largest megacity according to the World Bank.

It is notable that in Shenzhen today, you will not find recognizable American and European company names. There is nothing like the “Fordlandia” company town that Henry Ford built in Brazil. While the Communist Party opened up the SEZs to foreign investment, they also specifically targeted overseas Chinese capital, as they were wary of the legacy of imperialism spanning the nineteenth and first half of the twentieth century. Over half of the incoming capital was from Hong Kong, and by the 1990s, Taiwan capital joined their fellow investors. Even today, Hong Kong and Taiwan capital far outpaces the Euro-American presence in China. Again, Foxconn, a Taiwanese company, is the best example.

Wisconsin Governor Scott Walker, U.S. President Donald Trump, and Foxconn CEO Terry Gou at Foxconn’s new site in Mount Pleasant, Wisconsin, on June 28, 2018. Credit: Reuters.
Manufacturing is leaving Shenzhen because land and labor prices, once rock bottom, can no longer compete with other regions within China and across south and southeast Asia.

In the early 2010s, at the same moment that Shenzhen began to catch the attention of world observers, Foxconn had already begun planning to diversify its holdings into new locations. This summer, U.S. president Donald Trump attended a groundbreaking ceremony for a new Foxconn factory in Mount Pleasant, Wisconsin. The deal was sealed by a $4 billion-dollar subsidy set aside by governor Scott Walker. More significantly, Foxconn years ago began to move into interior China, building a new “iPhone city” in Zhengzhou, Henan dedicated exclusively to the manufacture of Apple products. The historically important but economically poor region in northern China enticed Foxconn with a package of subsidies and tax breaks, beating out other cities for the right to become China’s newest boom town — not unlike the current frenzy among American cities vying to host Amazon’s second headquarters.

Manufacturing is leaving Shenzhen because land and labor prices, once rock bottom, can no longer compete with other regions within China and across south and southeast Asia. Instead, Shenzhen has tried to pivot into a hybrid of London and Silicon Valley, hosting light industry, banks and financial institutions, and startup information technology firms. As the Shenzhen economy, and that of China more broadly, undergoes transition, so too has the nature of labor action. While labor strikes once were centered upon manufacture in southern China, they now reach service, retail, and construction work across the entire country.

There are many lessons to take away from the ongoing Jasic worker protests, many reasons to stay tuned to what will happen (Reuters, by the way, has had the best reporting). From a broader historical perspective, Shenzhen’s economy is experiencing a transitional phase that has hit every industrial boom town around the world over the past three centuries. Greater profits mean greater standards of living and production costs; to continue making money, firms must become more capital-intensive (e.g., 1980s Taiwan) or simply move to cheaper locations (e.g., 1980s Hong Kong). Either way, the local workforce gets squeezed. Shenzhen’s boom occurred in the aftermath of Hong Kong’s and Taiwan’s; which followed the aftermath of Japan’s; which arose in the aftermath of Britain and the U.S.’s. And Shenzhen’s boom is now being redistributed to other parts of Asia and the global south, as it navigates its own transition to a different kind of economy.

The “Chinese miracle” has now lasted long enough to take its place in the history books alongside the earlier miracles of east Asia, Japan, and even post-World War II Europe. Where does the Chinese economy go from here? Will the resurgent labor movement successfully reshape the relationship between Chinese workers, the Party, and big business? These are notoriously difficult questions to answer, and to answer them we must keep an eye on both domestic Chinese developments as well as the broad sweep of industrialization and its discontents worldwide. As such, we can recognize this development as more than just Chinese history but as the latest chapter in the history of the modern, globalized economy.

Andrew B. Liu’s column for the Lepage Center this fall focuses on histories of capitalism in China. He is an Assistant Professor of History at Villanova University.