Will Chinese Workers Challenge Global Capitalism?

19 Aug 2010

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Minqi Li, Professor of Political Economy, from the University of Utah in the US, talks to Paul Jay of the Real News Network about the recent wave of workers' strikes in China. Li is author of the book, "The Rise of China and the Demise of the Capitalist World Economy."

In June, leaders of the Chinese Communist Party said that it's time for workers’ wages to go up. 

There's been much talk about China restructuring its economy to boost domestic demand. There has been much external pressure for this to happen too. In the G20 Declaration and in various statements from American president, Barack Obama, there has been pressure on China to increase Chinese demand not just for domestic goods, but also for goods from abroad -- as the buying power of Western markets wane.

Nevertheless, the wave of worker strikes in China is unrelated to external pressure.

This year there has been a wave of strikes in foreign owned factories, especially in the export-oriented sector. While last year, there was a wave of strikes in the state-owned enterprises sector.

The combination of these two waves of strikes represents the beginning of a longer-term trend.

For decades China's economic development was based on the massive exploitation of cheap labour pools. This is about to come to an end and there are two factors driving the change.

Firstly, China's aging population plays a part in affecting outcomes, as the structure of the population is changing. The portion of the labour force that is under 30 years is likely to decline in coming years.

And, when the surplus labour force is depleted the bargaining power of workers increases.

In addition to the demographic change in China, a new generation of workers now have higher expectations. They want to live like urban residents.

As a result, a combination of these factors may result in more workers' organizations and more worker militancy, which could change China's income distribution.

Despite the central government making repeated statements about the desire to increase wages, the current wave of strikes are coming from workers' own initiatives and are not initiated by government.

Regardless, this has not translated to action at the local level because local level bargaining depends on the relationship between the workers and their local employers. It appears that central government does not have much direct influence on this.

So far there has been a limited response to the wave of strikes. In some instances there have been wages increases, but in other cases, employers are trying to get around wage increases by reducing workers' benefits -- to the extent that they have also moved their factories to the "inner land" where wages are lower.

But, argues Li, in the medium and longer term, the strikes will improve workers' bargaining power.

Moreover, according to Li, the Chinese working class is not a homogenous group. They are divided into two segments.

On the one hand there are new migrant workers from the countryside that have recently moved to the cities to work in the capitalist sector. Their struggle is well covered by the media.

On the other hand, there is the historic urban working class whose parents used to work in the socialist state sector. Urban workers' struggles are directly related to a desire to return to some form of socialist legacy, and these workers have organized impressive anti-privatization struggles. 

However, the media does not cover their struggle.

So, while urban sector workers are more politicized -- their migrant counterparts remain politically inexperienced. However, Li posits that in a few years time, as their experience increases, migrant workers will also start demanding political rights in addition to better wages.

Watch part two of this interview, to find out what is happening in the Chinese economy at a more general level. Find part three of this interview here.

You can find this page online at http://sacsis.org.za/site/article/263.19.

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