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Unrest is stirring among Chinese factory workers

Walkouts may signal a limit to cheap labor

DONGGUAN, China -- Heralded by an unprecedented series of walkouts, the first stirrings of unrest have emerged among the millions of youthful migrant workers who supply seemingly inexhaustible cheap labor for the vast expanse of factories in China's booming Pearl River Delta.

The signs of newly assertive Chinese workers have jolted foreign and Chinese factory owners, who for the last two decades have churned out everything from Nikes to baby dolls with unbeatably low production costs. Some have concluded the raw era in which rootless Chinese villagers would accept whatever job they could get may be drawing to a close, raising questions about China's long-term future as world headquarters for low-paid outsourcing.

"One dollar, two dollars, it used to be they didn't care," said Tom Stackpole, originally from Massachusetts, who is quality control director here for Skechers USA Inc. and has been involved in shoe manufacturing in southern China for a decade. "That has passed."

Stella International Ltd., a Taiwanese-owned shoe manufacturer employing 42,000 people in and around Dongguan, faced strikes this spring that turned violent. At one point, more than 500 rampaging workers sacked company facilities and severely injured a Stella executive, leading hundreds of police to enter the factory and round up ringleaders.

"We never had anything like that before," said Jack Chiang, Stella's chief executive officer.

Chiang suggested that several factors have contributed to the shift in attitude. On the one hand, he acknowledged, assembly-line wages have not risen in recent years nearly as fast as the cost of living. And image-conscious US retailers who buy Dongguan's shoes have demanded better treatment and human rights counseling for the workers, encouraging them to demand change.

Finally, Chiang added, broader general freedoms in the country have reduced the Chinese people's traditional fear of authority, and not just among factory workers. Protests by farmers and others, many of them violent, have broken out with increasing frequency across the country recently.

The growing assertiveness of assembly line workers has posed a political problem for the governing Communist Party, which ideologically should champion poor laborers struggling against capitalist managers. But local governments have become shareholders in many of the factories, steering officials toward the management side of labor relations.

"The government is the largest boss in the area," said Liu Kaiming, a labor analyst and director of the Institute of Contemporary Observation in nearby Shenzhen.

Apparently eager to show solidarity with restless workers, the government-run All-China Federation of Trade Unions, the only legal union in the country, recently issued a reminder that the law requires foreign as well as Chinese companies to accept federation branches wherever workers demand it. The official federation announced Thursday that Wal-Mart, the American merchandizing giant, had agreed to allow unions in its factories in China.

But factory owners and workers in the Pearl River boom zone said the official union does little to represent labor because it is a spin-off of local governments that own or rely on the businesses.

Even when they do not directly own companies, local governments have a high stake in preserving the Pearl River Delta's role as a magnet for US, Japanese, and other firms seeking cheap labor unencumbered by unions. Foreign companies have invested more than $50 billion in the region over the last five years, contributing to a 14 percent growth rate.

The result has been a near-total lack of representation for the millions of workers, most of them 18- to 22-year-old women, who toil at assembly lines more than 60 hours a week for wages that amount to about $120 a month. And most live at their factories in company-provided dormitories and eat in company cafeterias -- and then hand back a third of their pay for food and lodging. Some unhappy villagers have gone home, and factory managers have begun to encounter labor shortages for the first time.

Conversations with workers outside Dongguan plants one recent day revealed a sense of frustration about having no place to turn with complaints about overtime, wage levels or the quality of their food. The conversations also displayed little hope of improvement because, they say, management has overwhelming power.

"Most migrant workers have to give up their rights to keep their jobs," said another 20-year-old factory worker, who wanted to be called only Miss Chen. "But to be frank, we are not here for rights. We are here for money. I have to wire money back every month to support my family."

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