Thursday, November 27, 2008

Lessons from the Pearl River Delta

I was in the Pearl River Delta (PRD) recently and the sky there was the bluest I've ever seen it. Maybe it was luck or maybe it was the fact that thousands of factories have shut down over the past months.  I'm inclined to believe the latter.  People have told me that the scenes at PRD train stations are now sometimes reminiscent of Spring Festival, with crowds of workers waiting to return home.  Laid off employees have rioted at a toy factory in Dongguan and elsewhere.  Taxi drivers in Guangzhou, like their colleagues in cities around the country, are on strike. 

As I've said before, my worry is that the government will take this as a sign that it should hold back on strengthening labor protections.  There are signs that this is exactly how authorities have read the situation.  Already, provincial and municipal minimum wage raises have been frozen. The recently released implementation guidelines for the Labor Contract Law are watering down the law's impact, as are local regulations.  

Beijing should realize that far from being a solution to economic difficulties, bad working conditions have made an already bad situation worse.  For example, because it did not ensure that wages were paid on time, the government is now forced to pick up the tab for Taiwanese companies that disappear in the night, leaving their workers months behind in wages.  Non-payment of social security fees (and the non-transferability of those payments to workers' home provinces) make the crowds returning to Hunan and Sichuan dangerously insecure---and threaten stability in the interior.  

This crisis should be seen as an opportunity for China to reaffirm its commitment to fairness and to creating higher value-added industries, rather than an excuse to retreat.


wuming said...

What are these "higher value added industries"? and who are going to take up the slabs for those lower value added industries once China would succeed in this supposed migration?

Many of the issues confronting China and hence the world are existential ones. Can the world afford to consume at the current level? Are Americans and Europeans really deserve to be so much richer than a Chinese or an Indian? The solutions to these issues require rearrangement of world order. Can this be achieve short of a world war?

The current crises also call into question the liberal democratic ideology. Though Bush administration is not completely (or even largely) responsible for all these crises, there are certainly numerous moments when course correction for US should have occurred. The fact that this incompetent and criminal regime can be kept in power for eight long years should say something about the capability of democratic system, at least as it is practiced in US.

Old Tales Retold said...

Good points, as usual.

Some of those lower value added industries churning out doo-dads for dollar stores in the West may simply disappear. It doesn't make sense shipping something that costs $.99 halfway around the globe anymore, given current fuel costs and the increasingly clogged up worldwide port infrastructure--and it doesn't make sense making those things anywhere else. Some things--electric fans, cheap shoes--that are sold from China to other parts of the developing world may begin to be made in those other places rather than Dongguan or Shenzhen, but some will remain. I'd like to see engines and electronics grow in China in the place of the ultra cheap stuff, but, of course, that will bring more conflicts with the West, as those are precisely the industries that American and European workers think they'll still be able earn a dignified living off when everything else has left. So it goes.

No, Europeans and Americans do not deserve to be as rich as they are in absolute terms or in comparison to Chinese, Indians and others. Justice won't just require raising some people up, it will also require taking some people down a peg, asking that they live at lower levels of consumption. I don't know how those rearrangements will happen without a lot push back.

I'm not sure what you mean by the current crisis calling into question liberal democracy. I suppose we should define "liberal democracy" before we get much further---are we simply referring to capitalist, multi-party democracy or do we mean one person one vote, what ever the form of the government and economy? In other words, is it the "liberal" we are emphasizing or the "democracy"?

These last months' events happened because of the greed of people on Wall Street whose expertise is narrow, whose intelligence is directed in one direction. If anything, it is a case of not enough democratic checks and balances, of a populace who has checked out and doesn't involve itself enough in the big issues.

Certainly, there are structural defects with the American system. Arguments could be made for adopting a parliamentary system, instead, with a majority in congress choosing the executive. Or maybe just scrapping the electoral college. Bush, of course, lost the absolute majority of votes in 2000 but succeeded through the electoral college system and help from his daddy. But I think the bigger problem is a cultural one.

People aren't involved at a community level as they once were ---at union halls, city halls, rotary clubs, etc. Engagement has been contained to national elections, which is where America's binary party system is particularly crude---"Do you want A? No, then how about B? C is wasting your vote." People's career aspirations are also directed at the top, at being like the corrupt Wall Street CEOs themselves, not at being a community leader. We need to rebuild Americans' engagement from the bottom up.

That said, this financial crisis has touched quite a few authoritarian countries, too. Poor Dongguan City is reaping the fruits of zero popular engagement--the whole city is aimed at fat cats from Taiwan and HK and now, when that money is drying up, it's realizing that it has no other source of money or sense of self. So much for the incredible vision of technocratic leaders, who are thought by some to be making brilliant long-term plans rather than just beating up petitioners and migrants!

I think the last part of the last sentence of your comment is particularly relevant: " least as it is practiced in the U.S." I am always disappointed that debates about democracy in regards to China and the U.S. are about, well, China and the U.S. With all the failed and successful authoritarian and democratic models out there, I think the debate should return to principles, not whether Hu Jintao has some great plans or Bush is an idiot.