China role threatened as world factory

Young workers at Foxconn's Shenzhen factory committing suicide one after another couldn't be more disturbing.

Taiwanese tycoon Terry Gou Tai- ming moved swiftly on the weekend to boost wages by 20 percent to ease tension after 10 deaths so far this year.

Although Foxconn denied the pay rise had any connection whatsoever to the suicide scandal, its timing couldn't be more coincidental.

In Foshan, more than 1,800 Honda workers at its parts factory have been on strike for two weeks, forcing the Japanese carmaker to shut down its assembly lines across the mainland.

Honda has offered pay rises, but obviously not enough to get the striking employees back to work.

Both incidents have helped to raise the question whether China's role as the world's factory is soon ending.

Nobody can possibly standardize the cause of all the suicide jumps and wrist slashing at Foxconn. But the general views link them to the military-style workplace discipline designed to suppress costs for maximum profit.

For years, this has been Gou's formula in elevating Foxconn to become the king of contractors, winning orders from leading brands such as Apple, Microsoft, Sony, Nokia, and Hewlett- Packard.

Honda's case is more straightforward, though not necessarily simpler. So far, the carmaker has put off reaching a settlement with the striking workers by recruiting and training interns to replace those more experienced regulars.

The different approaches by Foxconn and Honda have helped each control costs in a highly competitive commercial world. But neither plant fits the common definition of "sweat-shop" usually associated with extremely low salaries and unsafe working conditions. There are scores of other mainland workplaces that better fit the description. But the fact is China's labor market is changing. In the past, migrant workers who flocked to the cities from the poorer hinterland were driven by the burning desire to earn and save as much money as possible, so they could someday triumphantly return home to build big houses or raise livestock. Clearly, this is no longer the case. Migrant workers now mostly belong to the 1980s or '90s generations, better educated and having experienced less hardship than their parents. They travel to cities, dreaming of prosperity, and are less willing to return to poor home villages.

Their earnings may be good for the standard of living in the hinterland, but hardly enough for life outside factory dormitories in Shenzhen or Foshan.

The mainland labor market resembles what Hong Kong's was like in the 1950s and '60s. It took many years for the SAR to become what it is today.

There's little doubt a similar transformation is occurring in China, with the government introducing policies to increase minimum pay scales almost yearly since 2006, in support of Beijing's building of a harmonious society, and desire to stimulate the economy by boosting domestic consumption.

Of those provinces and cities raising the minimum pay this year, the rate is 10 percent or more.

But economic transformation is a natural process that won't be completed in a fortnight. So China will continue to remain an important manufacturing base of the world for the foreseeable future.*Overset by 720.*

英文虎報 Central Station | By Mary Ma