The recent wave of labour disputes in China is creating a political dilemma for a government eager to boost workers' income but allergic to organised unrest.
As the disputes – including strikes at two car-parts plants affiliated to Honda – have hit the headlines, Beijing has avoided taking any firm public position, perhaps in the hope that the unrest will die down.
Yet, if the outbreak of strikes continues, the government will be under pressure to take a stand, from economic reformers and ordinary Chinese – who see the push for higher pay as a welcome step towards reducing inequality – as well as from businesses worried about rising costs, and party officials concerned about organised opposition.
“This is a big test of where the government is going with labour regulation,” said Andrew Gilholm, a political risk analyst in the Shanghai office of the consultancy Control Risks.
“If there are a string of copycat strikes after Honda, it will be a big headache for companies.”
In fact, China has witnessed considerable industrial unrest in recent decades, much of it localised and attracting little publicity. The causes have tended to be unpaid wages or Dickensian working conditions. While the organisers of such strikes have often got into trouble, in many cases the authorities have taken a relatively relaxed attitude, provided the disputes remained small and non- violent, seeing them as a way of blowing off steam.
Mr Gilholm and other analysts, however, said the Honda strikes were a new development because they focused on wages rather than perceived abuses, meaning even well-run factories could become vulnerable to labour disputes.
“It is a new form of strike – a very symbolic event,” said Liu Cheng, a professor at Shanghai Normal University and an outside adviser in the drafting of the 2008 labour law. After wages had been held down for long periods, he said, “finally there is this explosion. It is because of workers' growing awareness of labour rights, and more talk and debate about the subject.”
In some sections of the ruling Communist party, such ideas will be interpreted as a considerable threat, given that a wave of copycat strikes could help forge independent and credible groups of organised labour outside the control of the party and its official body, the All-China Federation of Trade Unions.
Instructions issued last week to Chinese media by propaganda officials ordered no reporting of the Honda strikes or of the spate of suicides at a factory of the big manufacturing group Foxconn.
Yet, there are elements among the authorities that will welcome some bottom-up pressure for higher pay – given the importance the government is placing on raising consumption. Chinese media have given wide coverage to figures showing that wages have fallen sharply as a proportion of gross domestic product in recent years.
Boosting incomes is likely to be one of the priorities of China's next generation of leaders, who are due to take over in 2012-13. In a recent speech, Li Keqiang, who is widely expected to become premier, stressed the importance of rebalancing the economy towards household consumption.
“Adjusting the economic structure is not only a long-term strategic task, it is also an urgent task for today,” he said.
