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Credit: Reuters/Bobby Yip By James Pomfret and Kelvin Soh ZHONGSHAN/LONGHUA | Mon Jul 5, 2010 1:48am EDT ZHONGSHAN/LONGHUA China (Reuters) - After a morning of confrontation with his bosses at an auto parts factory in southern China, Wei took a different route home to avoid the plain-clothes police tailing him. As soon as he reached his building, Wei darted up a flight of stairs to his small rented room and logged onto a desktop computer. "There are 54 workers online now, and most still support the strike," he said, pointing to a stream of cascading messages posted on a popular Chinese social networking website by employees of Honda Lock, a Chinese supplier to Japan's Honda Motor Co. "Tomorrow is a critical time," said Wei who asked that his full name not be used. "If we continue to strike, Honda doesn't have enough stock and can only last until Monday. Let's keep going till then," he read aloud from a post in a chat room called "Honda Workers Fight Until the End." A short 22-year old with gelled hair and a passion for football, Wei joined co-workers who put down their tools last month to demand higher pay from the supplier of car locks, mirrors and handles. The strike forced Honda Lock to suspend production and led Honda Motor to shut its Chinese assembly lines for over a week. "Every boss is a little greedy," said Wei, who added he was inspired by the words of a labor leader who had argued that Chinese should stop working like "slaves" for the Japanese. Wei is part of a vast, embryonic and potentially powerful force that has captured the world's attention by staging a surprise string of strikes recently. China may be "the workshop of the world", but young rural migrant workers like Wei are less accepting than their parents were of life in the factories -- low pay, grueling hours, and sometimes martial workplace rules. A spate of worker suicides at the tightly guarded factories that make gadgets for Apple and other electronics companies has also highlighted their plight, becoming a cause célèbre for migrant workers who followed the stories online -- as well as an embarrassment to the foreign companies that depend on the plants. The new assertiveness of migrant workers has implications that reach far beyond the obvious higher costs for foreign companies that have relied on a cheap and docile Chinese workforce. And it comes at a time when a strengthening yuan is further eroding China's labor-cost advantages, prompting some firms to consider relocating their China operations.(For more on China's yuan policy, click on r.reuters.com/jej52k) The prospect of workers organizing, electing leaders, and protesting also raises difficult questions for a Chinese government obsessed with stability and control, while also pledging to address a yawning rich-poor gap by raising the incomes of workers and farmers. Besides the strike at Honda Lock and other Honda parts makers, workers also have refused to man the factory lines at suppliers to Toyota, Hyundai, Adidas and other foreign companies. China has seen bursts of labor protest before, but they often fizzled when disgruntled workers -- fragmented and often afraid -- gave in. Not this time, at least so far. Workers have been far more aggressive, using the Internet to organize, and are winning significant concessions. Nearly all of the recent strikes resulted in pay hikes. The Honda Lock walkout ended two weeks ago, with workers agreeing to a pay rise of 20 percent. "(This is) a new generation of migrant workers," said Liu Kaiming, executive director of the Institute of Contemporary Observation, a privately funded group in Shenzhen that focuses on labor issues. "They are more willing to speak out about their grievances and are less tolerant of long hours and tough conditions than the older generation." DOWN TO THE FACTORY Four years ago, Wei crowded onto a slow train from his ancestral village in the backwaters of Guangxi to neighboring Guangdong, making the voyage from village to factory that tens of millions of rural Chinese have made in recent decades. He wasn't sorry to leave. "You open the door and there are mountains," said Wei of his home village among the famous craggy limestone hills near Guilin. "The air is fresh but there's absolutely nothing to do. If young people like us just stay at home there's no way out." Wei's parents -- farmers who grow rice and vegetables and raising pigs, chickens and ducks -- were largely content to live off the land and didn't join others of their generation streaming to factories in the coastal cities. Unable to afford the fees to keep their sons in school, however, they encouraged Wei and his brother to make a living in the city after they completed middle school -- an opportunity they were only too happy to take. While Wei found work at the Honda Lock plant, a complex of low-slung white buildings beside a muddy river in the factory town of Xiaolan in the Zhongshan region, his younger brother headed to the dusty industrial county of Dongguan to the east of the Pearl River. It hasn't been easy work. Wei, who spends at least eight hours a day standing on an assembly line, putting together locks for Honda cars, speaks of an almost unendurable monotony in carrying out identical tasks around the clock. "Each year is the same. It makes me sick in the stomach. There's no freshness to things anymore," he said of his job which pays around 30 yuan (US$5) per day. The work can lead to repetitive stress injuries and sometimes can be dangerous, especially when chemicals and high heat furnaces are used to treat parts. The loud, clanking sounds of machines are also stress-inducing, say other striking workers at Honda Lock, who have called for noise reduction measures as part of their demands. Conditions in Chinese factories vary greatly, with small and medium sized plants often far worse than those run by larger multinational corporations held to higher standards of corporate social responsibility. At Foxconn, one of China's largest manufacturers with hundreds of thousands of workers in a network of industrial complexes sprawling across the nation, a recent spate of headline-grabbing suicides threw a harsh spotlight on the bleak, low-paid existence faced by many Chinese factory workers. Labor rights groups detail military-like management practices intended to maximize productivity, but which have exacerbated emotional pressures on some workers. While the typical workday is eight hours, according to stipulations in China's labor contract law, many workers often try to bolster meager base salaries by putting in up to four hours of overtime a day. Workers are barred from talking to one another while on the production line and stand for long hours carrying out the same tasks. Toilet breaks are also restricted to once every two hours, Foxconn workers who were interviewed said. "They are here to make money, of course they have to work hard," said Zhu Fuquan, a department manager at Foxconn's production facility in Longhua. "If they want a good life here, they will have to work hard for it. It's natural." Several days before speaking to Reuters, Wei had joined hundreds of co-workers in laying down their tools at the factory early one morning, only to find the tree-lined road outside the plant blocked by a wall of around 50 riot police, dressed in black and wearing helmets. Police vans were parked along the streets and plain clothes officers were filming and photographing proceedings. The workers -- some in white factory uniforms; others dressed in jeans, dresses, high heels and T-shirts -- were in a defiant mood -- pressing up against the rows of police. Many retaliated, not with violence, but by snapping images of the stony-faced officers on pocket cameras and mobile phones to post on the Internet. Others ripped up factory notices of a meager pay rise and scattered them over the ground. "More money. More money," they chanted, while calling on the management to allow independent unions to be formed. A small group of factory line managers tried desperately to mediate. One in white overalls and a blue "Honda Lock" cap stepped forward and shouted into a loudhailer, demanding the massed workers return to duty or face "severe consequences". But the workers jeered and heckled him before he was forced to beat a hasty retreat. After more than an hour, management relented. The riot police parted their wall and the workers streamed off. "We are not as cowardly and afraid of trouble (as the older workers)," said one of Wei's co-workers after the protest. The worker, a cheerful 20-year-old factory girl wearing a pink dress, gently mocked an older colleague in his 30s who was among a group of around 10 others gathered in her room. "We don't think so much about things," she laughed. "The risk is worth taking. Now that we've started, we must finish it." HIGHER EXPECTATIONS To be sure, workers of the previous generation weren't necessarily more satisfied with their working conditions. But, say labor experts, they rarely saw themselves remaining in urban areas and were less likely to directly challenge management. "The rights mentality of younger workers is much stronger than past generations," said Wen Xiaoyi, a researcher at the China Institute of Industrial Relations in Beijing. "The older workers tell you they feel a sense of loyalty to the company, but they also say that younger workers have a completely different attitude and higher expectations." That change of attitude comes across in interviews with young workers in southern China, who often speak of an unwillingness to return to the countryside. "My parents always tell me to be loyal and work hard for my company," said Zhang Hui, a 21-year old native of eastern Anhui province who works as a quality control supervisor at a factory making alarm clocks in Dongguan. "They really don't understand what it's like out here. With their kind of thinking, I'll never get anywhere and will spend the rest of my life doing useless work in a factory," said Zhang, whose quiet demeanor, spectacles and wiry frame seemed to make him more at home in a library. In the two years he has spent in Dongguan, Zhang has already worked in three different jobs, beginning with a position as a security guard that paid 1,100 yuan ($162) a month before overtime, to his current position that pays him over 2,000 yuan a month. Several factors appear to be shaping the work attitudes of the current generation of migrant workers. One is economic. For over two decades, the world's top brands from Apple to Nike have paid suppliers in China to help them churn out the latest gadgets and sneakers. But rapidly rising living costs combined with higher expectations for material goods have begun to eat into much of their salaries. China's consumer price index accelerated to a 19-month high in May, driven by surging food prices and torrid growth in the country's red-hot property sector. Spiking prices at coastal cities such as Dongguan and Shenzhen, which attracts the biggest number of immigrants, also means that few can achieve the middle-class lifestyle that attracted them to the city in the first place. When Zhang first arrived in Dongguan in 2008, he paid less than 300 yuan ($44) a month for a bunk bed and a cupboard that he shared with five other roommates. While he has since upgraded to an apartment with a common sitting room that he shares with two friends, that same bunk bed will now go for at least 450 yuan a month, he said. The cost of food has also jumped, with a basic meal of rice and vegetables at a local canteen catering to migrant workers going for about six yuan, almost double that from two years ago when Zhang first arrived. "Prices just keep rising all the time," Zhang said. "Everything is so expensive now, and my parents expect me to send money home, so I end up not being able to save anything at all." The desire of younger workers to seek out lifestyle comforts largely forsaken by -- or unavailable to -- their more austere parents, has led local media to portray them as softer than their forebears. They are sometimes described as "little emperors" or likened to "strawberries" or "jellies." LABOR SHORTAGES Be that as it may, a labor shortage in China's industrial hubs has allowed workers to be choosier. Factory owners in southern and eastern China report widespread difficulties in finding workers and are hiking wages to entice potential employees. On a recent afternoon in Dongguan, job ads covered the shop fronts of employment brokers that line the street. The ads had been hurriedly updated, with new, higher salaries scrawled by hand over the posters, reflecting a new reality after Foxconn's decision to raise salaries. The salaries on offer ranged from 1,000 yuan a month including food and board for a cook, to 10,000 yuan a month for the manager of a massage parlor. "Everyone wants more these days, especially the younger kids," said Huang Min, a 30-something mother of one, who was plastering job ads on a wall outside the employment broker. "When I first got here, I just took any job that I was offered because my parents needed money and my brother had to go to school. But now, these new guys just want an easy job that pays a lot of money without having to do much hard work." That suggests a third reason for the higher expectations of this generation: many were born at a relatively prosperous, peaceful time for China. Since the Tiananmen Square massacre in 1989, China has been free of the wrenching upheavals that instilled a deep sense of political caution in many Chinese. And as children of an earlier generation of migrants, many grew up comparing their lives not to those of impoverished farmers, but to more prosperous city dwellers. "They see themselves as urban residents," said Geoffrey Crothall, a spokesman for the China Labor Bulletin, a labor rights advocacy group based in Hong Kong. "And like other urban residents, would have the same aspirations of upward mobility that their parents may not have had moving into the city." While far from their home villages, China's younger generation of migrant workers is finding a new space for community -- and mobilization -- online. After a nine-hour day spent inspecting alarm clocks, Zhang Hui, the quality inspector, turns on his Lenovo netbook and goes on the Internet. There, he reads discussion forums and spends time chatting with his friends on the Chinese QQ network. It is usually through such online communities that word about industrial unrest first spreads, as the current generation bypasses official media to tap uncensored online sources of news. "I am so proud when I see people going out there and fighting for their rights," Zhang said. "It gives me courage to know that if my employer mistreats me, I will go out there and gather everyone together to know that we are not to be trifled with." Online forums targeted at migrant workers have become popular with those looking to complain about their Japanese, Korean or Taiwanese employers. "They're not interested in helping us Chinese people at all," said one user who went by the name "baodazi" on a forum dedicated to Foxconn, the Taiwanese contract manufacturing company. "All they want to do is milk us of all our resources, earn money from our work and then leave nothing for us at all." Pictures and videos of striking workers at factories around China are uploaded within minutes, prompting executives to privately question if this was proving a catalyst for copycat industrial action. Strike organizers also frequently use these forums to pass on information about the strikes and update workers on any communication with the company's management. Mobile phone text messages have also helped striking workers at the Honda and Toyota supplier plants coordinate and mobilize. The Chinese government's seemingly tolerant attitude toward such online chatter has also surprised some businesses accustomed to a harder line toward industrial actions. In the late 1990s and early 2000s China was beset by a wave of worker protests during the mass privatization of rusting state-owned enterprises that led to tens of millions of workers getting laid off. Fearful of broader social conflicts erupting at the time, authorities arrested and punished many worker leaders. "It was never like this before," said a senior official at a Taiwanese firm that runs three factories in China, who declined to be named because of the sensitivity of the issue. "One of the biggest reasons why China has always been so attractive is because these issues have never come out in the open. Everyone wants a better life, but if we can't afford to raise salaries, what do they expect us to do?" POLITICAL CHALLENGE The emergence of a more assertive, confident young worker army could herald changes to China's industrial and political landscape. Chinese leaders have said they want to give workers and farmers enough income and confidence to buy stuff, expanding domestic consumption in the process. They have already lifted the minimum wage in industrial regions such as Guangdong and Jiangsu by about 20 percent, in line with a forecast from UBS that says average wages in China should rise by about 15-20 percent this year. "Rural migrant workers are the main army of the contemporary Chinese industrial workforce," China's Premier Wen Jiabao recently told a group of workers. "Your labor is a glorious thing, and it should be respected by society." But the Communist Party, which traces its own heritage to a worker's movement, has faced a policy tightrope. It must also ensure that strikes don't proliferate and scare investors or ignite broader political confrontation that erodes Party rule. Few workers blame the government for low wages, but more and more say higher pay and a larger share of China's economic pie are only fair. While the past few years have seen bargaining power shift in labor's favor, it's virtually unthinkable that Beijing would allow workers to form independent unions along the lines of those found in Japan or South Korea, which might undermine its one-party power. When workers of struggling state-owned factories in northeast China organized protests and voiced political demands in 2002, authorities arrested the leaders and jailed them on charges of political subversion. China's leaders have studied the lessons from Poland's solidarity movement led by Lech Walesa, which saw an independent trade union morph into a powerful opposition force that played a key role in the downfall of Communism there and in other Eastern bloc countries. But a failure to create a more effective advocate for workers' demands in China could exacerbate tensions going forward, according to Yu Jianrong, a researcher at the Chinese Academy of Social Sciences in Beijing who studies protest and unrest. "For present-day China, allowing workers to have their own organization to represent their interests is a matter of their basic rights, it would also benefit the development of long-term social stability," Yu wrote in a Chinese current affairs magazine, Southern Breeze, this month. While the risks are clear, the push for a more effective worker's movement in China continues to be hampered by strong-arm tactics from bosses to split the ranks of striking workers, intimidation by officials, and fragmentation among diverse migrant worker factions found in typical Chinese coastal factories. Indeed, at the Honda Lock plant in Xiaolan, the strikers at first appeared united and determined, but their resolve was slowly broken by police intimidation, management's obstinacy and recruitment of fresh workers as a possible hedge if the strike continued. "These days, most of the workers are young kids born in the '90s who will just quit if they're unhappy ... many of these youngsters won't take a stance," said Liu Youlin, a labor rights activist working in a small Shenzhen factory. While few young workers consider themselves to be natural born rebels, news of the suicides at Foxconn and the recent strikes at Honda and Toyota have blazed across migrant workers communities in factory towns across China. "It makes the workers feel that their factory's wages, management system, human rights, working and living environment should be improved," said Liu at the Institute of Contemporary Observation. "If even a company as good as Foxconn has caused all these workers to kill themselves, those working at far worse factories should demand a little more." Analysts differ on whether China has now reached its "Lewis Turning Point", the moment in a developing economy when once ample labor surpluses turn to shortages, and wages start to rise rapidly. What's clear, though, is that with a rising aversion of China's younger generation toward dehumanizing factory work, coupled with a shrinking pool of rural workers willing to move to coastal regions given rising incomes and opportunities inland, the failure to address nationwide labor market imbalances through concerted policy action could hamper the productivity and growth of China's gargantuan export sector in the coming decade. "Weak population growth may also substantially slow the flow of workers into manufacturing and services over the next few years," wrote Mark Williams, a China economist with Capital Economics in a recent paper. "The total workforce could start to shrink in five years." Back at the Honda Lock plant in Xiaolan, most of the workers have returned to their posts, settling for a wage package offering just a 200 yuan pay rise, far less than the 700 yuan hike they had demanded. Wei wasn't among them, however. He quit his job at the factory, saying he wanted to return home and rest for a while. "After working three years, I've only saved several thousand yuan. What's the point?," he said. "We have no future, no plans, no answers." (Additional reporting by Chris Buckley, Editing by Jim Impoco and Bill Tarrant) World China China Labor Unrest Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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