Two systems, one challenge

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Report of the TUC delegation to China, November 2008

Introduction

The TUC sent a delegation to China from Sunday 4 - Friday 9 November 2007 to meet with the leadership of the All-China Federation of Trade Unions (ACFTU) following up a visit made by TUC leaders in 2004 during a DTI delegation to Shanghai and a visit to the TUC by the ACFTU General Secretary in 2005. The purpose of the delegation was to explore the possibility of joint work with the ACFTU on issues such as organising in multinational enterprises, to exchange information, and to explore the issue of the ACFTU's role within the International Labour Organisation (ILO). The delegation consisted of the General Secretary, Paul Kenny from the GMB and Judy McKnight, Chair of the TUC Women's Committee, as well as Owen Tudor from the TUC. The Great Britain China Centre provided logistical support and William Taylor accompanied the group.

The delegation spent Sunday and Monday in Beijing, Tuesday in the port of Dalian and Wednesday in Shenyang (both in the north eastern province of Liaoning) and returned to Beijing on Thursday. On Sunday, the TUC delegation took part in a seminar with ACFTU officials and grassroots representatives of the ACFTU in various Walmart stores, meeting later with Mr Xu Zhenhuan, vice-chair of the ACFTU responsible for international relations. On Monday, the TUC delegation met with the British Ambassador William Ehrman, and with Mr Wang Zanghou, Chair of the ACFTU and a member of the Politbureau of the Chinese Communist Party, as well as a formal dinner with Mrs Sun Chunlan, first secretary of the ACFTU (in effect, the General Secretary) and meetings with ACFTU international officers. On Tuesday, the delegation flew to Dalian where they met with representatives of the port and seamen's unions before visiting the local vocational and technical education college, and meeting with the Dalian ACFTU leadership. On Wednesday, the delegation travelled to Shenyang (once known as Mukden) to see a centre for poor workers and a heavy industry plant before meeting with the ACFTU Chair of the Liaoning province, Mrs Sun Jiliang. On Thursday the delegation was supposed to return to Beijing for a dinner with journalists, British business representatives and leaders of Chinese civil society, but was instead fogged in at the Shenyang airport. The TUC met with the ACFTU at official level on Friday morning to tie up details of future co-operation before the delegation flew home.

Summary of key discussions and visits

ACFTU-TUC workshop: at the TUC's request, the delegation visit began with a workshop which explored collective bargaining, recent changes in Chinese labour law, preparations for the 2008 Beijing Olympics and multinational enterprises. The workshop was co-chaired by the TUC General Secretary Brendan Barber and ACFTU vice chair Xu Zhenhuan, and was introduced by the Director of the ACFTU International Department, Jiang Guangping. The ACFTU representatives involved included the deputy heads of relevant departments (law, organising and collective bargaining), the Director of the Construction Department of the Seamen and Construction Workers' Union, and four local representatives of the ACFTU branches in Wal-mart stores. Mostly an exchange of information, the ACFTU representatives were focused on the new labour law due to take effect in January, and which had been the subject of detailed negotiation and lobbying. The Wal-mart representatives described an attitude from local management that echoed their behaviour in the UK and elsewhere, and conveyed a picture of basic, day-to-day trade union activity over grievance and disciplinary cases.

Meeting with Ambassador Ehrman: the Ambassador provided the delegation with a confidential briefing on recent developments in China (especially the Communist Party Congress which had recently ended), the state of UK-Chinese trade and investment, and his perceptions of the ACFTU. The Congress had ended a period when people were waiting to see the outcome rather than taking initiatives, but it had reconfirmed the policy of openness, aimed to restructure trade by raising the quality of imports and exports (60% of Chinese exports are from TNCs based in China) and raising domestic consumption, which required an adequate social security net. The big change from the days of Jiang Xemin was the extra focus on social justice - trickle down from the coastal regions was not working, and 44% of GDP was held in savings, which needed to be unlocked. This would only be possible if people felt secure, requiring a safety net of health, pensions and education. The UK was the biggest EU investor in China, and the biggest EU trader in services. Chinese inward investment in the UK is also growing, for example in automotive and telecom industries, and China will soon develop a Sovereign Wealth Fund to spend their trade surplus. China is the fastest growing export market for the UK, growing at 15-20% a year, currently 25% more than our exports to India, and level with Japan. 25 million people a year were moving from rural areas to the cities, but there were only an extra 10-15 million jobs created every year. An Employment Promotion Law would be implemented in 2008, promoting labour intensive industries.

Meeting with ACFTU Chairman Wang Zanghou: the Chairman received the delegation in the Great Hall of the People, and much of the discussion focused on relations between the TUC and ACFTU within the context of international trade unionism. Mr Wang emphasised that while the ACFTU wanted to learn from the TUC, there should be no interference in each others' affairs, and no support for dissident voices in China. The ACFTU had no desire to create a new organisation alongside the ITUC and the WFTU, but did wish to return to the ILO Governing Body, from which he felt they had been unfairly excluded. He said that the labour law and employment protection law, and the forthcoming social security and labour dispute resolution laws were all there to protect workers. Layoffs when state owned enterprises were privatised or restructured had been difficult, but unions were now getting stronger support from the Communist Party. He said that of course Chinese workers had problems (eg wage arrears, health and safety, and social security) and needed protection, otherwise why have a trade union movement. The TUC stressed the need to find the basis for moving ahead more positively in terms of relationships, and that in economic terms, the relationship of the ACFTU with multinational corporations was vitally important - there was a need to prevent exploitation and uphold labour standards so the benefits of globalisation could be shared. There were also common issues of equality - gender, ethnicity and disability - and increased discrimination due to globalisation. The TUC encouraged the ACFTU to take opportunities such as a forthcoming OECD meeting in Beijing to engage in dialogue with the ITUC.

Meeting with Dalian port worker unions: Dalian is the second biggest port in China (after Shanghai) - a union of 10 people had been founded in 1929, rising to 4,000 by 1949 and now 9-10,000 (100% of the workforce). There were 31 full-time officers in the port union (one per 300 workers) who mobilised the workers and tried to develop them, seeking a harmonious relationship with the company, organising competitions for workers to show their worth to the company, and electing people to stand as examples to the rest of the workforce. The union was concerned about job security, ensuring a gradual rise in wages (which had risen by 10% a year over the last few years, and up to 17% a year where productivity was rising well - compared with annual inflation rates of 5-6%), and pressing for compensation when workers lose their jobs. Worker poverty resulted from disability, illness, death of family members etc. Laws and regulations were needed to guarantee the rights of workers and unions, and the company also had a Workers' Congress with 300 delegates, meeting once or twice a year where workers could voice their opinions on the future and organisation of the company, with management making a regular report. The Workers' Congress elects the Chair of the union for a five year term, and other union officials are recommended or volunteer (and are then vetted by the union leadership). Collective bargaining took place once a year, covering all aspects of the employer:employee relationship.

Meeting at the Dalian technical and vocational education college: the meeting was hosted by the Secretary of the Communist Party branch at the college, and the Chair of the education union. 90% of the students learn English, and there are 11,000 full-time equivalents. The school was for the poor, who would move easily into jobs - indeed they were often already working and on work experience. 5,000 companies in Dalian had investment from other countries. In deciding what skills to provide, the needs of the market were respected - the Government provided this information, and the school was very flexible in terms of courses. The Government pays some of the tuition fees, the student the other part (about £300pa out of £3-4,000pa). Parents were responsible for maintenance, unless they were very poor in which case loans and grants were available. 55% of the students were girls, but they were unevenly distributed by course - digital control, mechanics and so on were 80% male, women were almost all of the IT, hotel, pre-school education and secretarial courses. The policy of the state was that schools must not discriminate, but women tended to opt for those courses.

Visit to the Assistance Center for Poor Workers in Shenyang: Zhang Jincheng, Director of the Shenyang Farmer Labourers Rights Protection Center (and Inspector of the Shenyang Federation of Trade Unions/Member of the CPC Committee) showed the delegation around the Poor Workers' Centre. He was himself the son of a migrant worker and still considered the rural area his father had come from as home. Mr Zhang said that the Center provided help with labour disputes, small loans for workers hardship grants and emergency supplies (eg clothing, staples and bedding), a job finding service, advice when laid off, legal advice, help to pay for children's education, migrant workers' problems, micro-finance and start-up loans for small firms. It was established five years previously when State Owned Enterprises (SOEs) were closing down/laying off: then, they had 200 visitors a day, declining by 2007 to only 50 a day because the economy had improved. It was a service provided to all workers rather than members only (Chinese trade union law says that unions must support all workers not just members), and was used to recruit. 3-4 million yuan was being given out by unions (2 million from the ACFTU and about 2 million from the Government, as well as some donations), mostly for people between the government poverty line and a living wage. The service was advertised in the media. There were three centres in the districts of the city with a city-wide one for people who could not resolve their problems at the district Centre. The Government provided some of the same services, but no in a one-stop location, and the ACFTU facility supplements what the Government offers. The workers in the centre were ex-trade union representatives, often themselves laid off and trained up to work in the centre.

Meeting with the Chair of the Liaoning Provincial Federation of Trade Unions: Sun Jiliang said that there were 42 million people in the province, 56% in cities. The union had 80,000 full-time officers and 110,000 part-time. Their new slogan was 'organise for better protection' and they were dealing mostly with the reform of SOEs, organising migrant workers into unions - 800,000 had joined this year - and collective bargaining. They participated in the political process to affect legislation from its inception, worked for health and safety, and helped poor workers. The Japanese, Russians and Koreans especially had been visiting Liaoning recently - there were some UK companies, but most foreign companies were Korean, Japanese and Australian - she was not aware of bad behaviour by UK companies in China. There were 2 million migrant workers in the province, mostly in Dalian and Shenyang, mostly from rural areas inside the province. At New Year, the unions organised coaches and trains so that migrant workers could visit their homes. But the biggest problem was SOE restructuring - 1.78 million had been laid off in the 1990s. Remaining SOEs were now reluctant to deduct the money due to the union for subscriptions, and in non-SOEs it was not as easy to protect the rights of workers - but these problems were being overcome. Two million workers had been recruited in the last three years, and 80% of new industries in the province had been organised. The unions trained officials at three levels - at provincial level, the officers were trained by the provincial union, but the city and council level officials were trained under the supervision of the province. They were trained in law, collective bargaining, health and safety, finance and ensuring workers could take part in the management of their enterprise. Union representatives were also encouraged to exchange experiences. Every year, the provincial union trained 2,000 officials through 20 courses - and the ACFTU offered 100 places in the China Labour Institute in Beijing. Mrs Sun said that about a third of ACFTU provinces were led by women, but all had at least one woman vice-chair.

Key themes

Economic development: in 1978, two years after the end of the Cultural Revolution, Deng Xiaoping set in train a far-reaching policy of economic reform and opening to the outside world. Today, after 28 years with average GDP growth of over 9 percent a year (and 10.7% in 2006), more than 100 million people have been taken out of poverty as defined by the World Bank (subsistence of less than US$1 a day) and the economy is the fourth largest in the world. Then the state ran virtually everything. Now, more than half of the economy is private. In 1978 China's GDP and per capita GDP were roughly equivalent to India's. Today they are roughly double India's. The scale and speed of Chinese economic development is staggering, at least in the predominantly urban eastern coastal regions. This has had a significant effect on global trade, and on energy and commodity prices (as China sucks in more and more fuel and raw materials, such as steel). And as in other examples of rapid industrialisation, the impact on pollution and the environment, on health and safety and on society itself has been enormous.

Political developments: despite regular predictions of political reform resulting from economic growth, political liberalisation has lagged substantially behind economic liberalisation, although the speed and scale of change in the economy has led to some freeing up of liberty and speech at an individual level. There have been limited experiments with elections and some action against corruption, but overall, China is still a one-party state with no free or contested elections for the political leadership of the country. The Communist Party is still embedded throughout society and the economy, although it is now a more diverse party than it used to be, with entrepreneurs and celebrities more common in membership of senior bodies. Political freedoms are still severely restricted, and national organisations outside Party control are not allowed to flourish. There are still many people in jail as a result of what we would recognise as trade union activity, and state control over the internet and other forms of communication is still strong.

Chinese trade unionism: the ACFTU exists within this context - economic liberalisation and growth on the one hand, and continued one-party rule on the other. Greater challenges resulting from privatisation and restructuring, the penetration of the Chinese economy by multinational corporations and the growth of migration from rural to urban areas has increased the demands on the ACFTU and the problems faced by workers. Some new legal provisions, and changes to the ACFTU's practices have been made to meet these challenges, but continuing top-down centralism, loyalty to the Chinese Communist Party and the absence of core labour standards make it difficult for the ACFTU to exploit the opportunities or meet the challenges to the extent that might otherwise be possible. Internationally, the ACFTU continues to work at relations with other trade union movements, but does not criticise the Chinese government or its allies, and trade unions globally are divided about how far to work with the ACFTU.

ILO Governing Body: the visit took place ahead of a meeting of the ITUC General Council in December which discussed the composition of the ILO Governing Body workers' group to be elected at the 2008 ILO Conference. On the occasion of the last election in 2005, the TUC, in line with the then joint ICFTU/WCL slate, did not support ACFTU membership and they were not elected. The reason for excluding the ACFTU in 2005 was that the ACFTU had not upheld the core labour standards sufficiently (principally freedom of association) and had not demonstrated sufficiently their commitment to fulfil the responsibilities of a Governing Body member in terms, for example, of the principle of collective responsibility in the workers' group. Considerable discussion took place with the ACFTU on the issue, and it was clear that the ACFTU were deeply concerned about their ejection, and saw it as a hostile act.

TUC relations with the ACFTU: the TUC has held a position of critical engagement with the ACFTU, retaining our criticisms of the lack of trade union freedom (and the failure of the Chinese government to ratify all of the core ILO conventions), but engaging in dialogue with senior, middle and grassroots levels of the ACFTU. This is in general terms the position of most major ITUC affiliates (with the exception of the AFL-CIO in the US), although some are more and some less engaged. The main difficulty in such a relationship is how to retain the scope for constructive dialogue while making criticisms which are unwelcome on the one hand, or on the other, how to maintain criticisms of aspects of the Chinese system and the ACFTU's nature while still engaging in constructive contact with them.

Specific proposals

ILO Governing Body: it was the view of the delegation - subsequently endorsed by the TUC Executive Committee - that the ITUC should leave a place on the Governing Body which the ACFTU might fill as a reflection of their size and the growing significance of the issues being faced jointly by the ACFTU and the rest of the world trade union movement, the increasing engagement of the ACFTU with issues around labour law reform and collective bargaining, and because the ITUC was more likely to be able to influence the ACFTU if they were on the Governing Body than off. In particular, there are some indications that the TUC could assist the ACFTU in playing a constructive role on the Governing Body.

TUC-ACFTU relations and exchanges: it is recommended that the TUC step up our engagement with the ACFTU in terms of delegations and exchanging information, not least because that would allow the TUC to pursue more issues in more depth. The TUC has for some time been meeting with visiting provincial and occasionally sectoral ACFTU delegations (although there are a considerable number of these, which means that there is a resource constraint on the extent of commitment the TUC can make), but it might be appropriate to invite an ACFTU delegation to visit Britain, and for a women's delegation to visit China in the next two years. More immediately, however, it is recommended that the TUC and ACFTU engage more in exchanges of information on topics of concern. For example, the TUC should engage in dialogue with the ACFTU over issues such as the Olympics, trade, vulnerable employment, solidarity with trade union movements elsewhere in the world, prisoners and so on. The TUC should also continue to maintain relations with the ITUC affiliate, the Hong Kong Council of Trade Unions, and provide financial support to the ITUC Hong Kong Liaison Office.

Seminar programme: the ACFTU and TUC agreed that it might be useful to hold a series of seminars in China, with four to five UK practitioners and about 50 ACFTU participants, from all levels of the organisation. It is recommended that the TUC and ACFTU offices work up concrete proposals to initiate seminars on issues such as labour dispute resolution (perhaps with the involvement of ACAS), collective bargaining in multinational enterprises and workplace safety representatives, with the intention of holding the first in Beijing in the autumn of 2008.

Conclusions

The TUC delegation to China was impressed with the scale and speed of development in China, which is truly colossal. The Chinese economy continues to expand rapidly, but there is a growing view from the leadership of the Chinese Communist Party, as the recent Party Congress demonstrated, that the unrestrained growth of the Jiang Xemin era has not led to a 'trickle down' effect, and has exacerbated problems in terms of social inequality, environmental problems, and an imbalance in the Chinese economy. These lie at the heart of the increased levels of protest among Chinese workers.

Like almost all institutions in China, it is clear that the ACFTU is neither free nor independent of the governing Chinese Communist Party, but the delegation noted that some of the trade unionists we met from the grass roots or local level were acting in ways that resembled closely the ways that independent trade unions would act, and the ACFTU had learnt much from the serious debates around the new labour and collective bargaining laws of recent years which had seen bodies like the American (and initially the European) Chamber of Commerce arguing against increased legal protections for workers.

Chinese trade unionists face many of the same challenges, in radically different circumstances, that the rest of the world trade union movement faces: vulnerable employment and unemployment at the bottom of the labour market, and the growing power of multinational enterprises, which require a more global collective bargaining approach. Despite the differences over free and independent trade unionism, and the lack of adherence in China to the ILO core labour conventions, the TUC delegation therefore recommends that the TUC steps up its engagement with the ACFTU, and specifically proposes the development of closer engagement with ACFTU leaders, officials and grass roots bodies. The TUC will continue to press for the Chinese Government to ratify the rest of the core ILO conventions[1] and to discuss this, and violations of workers' rights, with the ACFTU when the opportunity presents itself


[1] China has ratified Conventions 100 and 111 on discrimination, and Conventions 138 and 182 on child labour, but not Conventions 87 and 98 on freedom of association and free collective bargaining, nor Conventions 29 and 105 on forced labour. The USA has only ratified two core conventions (on forced and child labour), India four (forced labour and discrimination) and Japan six. The UK, along with the rest of the EU, has ratified all eight.

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