The Nanfang / Blog

Manufacturers Plan To Pull Out of PRD Citing High Labor Costs

Posted: 07/22/2014 5:13 pm

factory workers prd chinaDespite building up a reputation as the “cradle of manufacturing” for China, the cost of manufacturing may now be too high for some companies to continue doing business in the Pearl River Delta.

According to a poll done by the Chinese Manufacturers’ Association of Hong Kong, almost a third (29.6%) of all Hong Kong companies intend to withdraw their investments from the Pearl River Delta, reports the SCMP. That is 2.7% more than last year.

Furthermore, 32% of Hong Kong manufacturers already have plans to move their factories to other places in Asia that have lower labor costs, including Southeast Asia, rural areas of Guangdong Province, and other parts of China.

Association chairman Irons Sze said labor costs in the PRD have been increasing some 10 to 15% every year. As well, changing local labor policies are cited as a source of frustration for the companies.

Meanwhile, a policy to replace human labor with robots has been spreading throughout the PRD, a trend that can be seen in Shenzhen, Guangzhou and Dongguan. In many of these cases, the main reason given for the replacement is a lack of an available work force, followed by rising costs.

The lack of workers is cited as the main reason for hukou reform in Guangdong province, encouraging some 11 million migrant workers to come and reside in less populated areas of the province.


Photo: Compassionate English


PRD News Brief: Yue Yuan Strike Update, Tennis and Golf Winners, All-Out Brawl

Posted: 04/28/2014 10:57 am

giles muller atp shenzhen challenger

Gilles Muller is the winner of last week’s ATP Challenger title in Shenzhen. Ranked 195th in the world, Muller just took 75 minutes to defeat Slovakian Lukas Lacko with a score of 7-6, 6-3. Meanwhile, the doubles title was won by Chris Guccione and Sam Groth from Australia.

Alexander Levy won the Volvo China Open at the Genzon Golf Club in Shenzhen on April 25. Levy won the golf tournament with a record score of 10-under par 62. Tommy Fleetwood took second position at four shots behind, and Alvaro Quiros came in third.

Four people are dead and one injured after they jumped from the third story of a building to escape police during a raid on a gambling den in Longgang District, Shenzhen during the early hours of April 26. The gambling den was just newly opened, and had attracted about 30 gamblers that night.

Shenzhen places third on a list of the most highest-paid white collar workers in China, right behind Shanghai and Beijing at #1 and #2, respectively. Shenzhen workers make an average of $1,093 a month. Guangzhou rounded out the list at #6.

Zhang Zhiru has been freed after having been detained for his role in organizing the labor strikes at the Yue Yuan shoe factory factories. Furthermore, the Dongguan local government is asking the factory to pay back the workers years of unpaid work benefits as well as unpaid work benefits. However, though many of the strikers have been forced to go back to work by the government, some continue to strike.

Rejoice, car poolers! During the Labor Day holiday from May 1-3, all tolls on Guangdong highways will be free! Sit in traffic with no money down!

pedicab fight dongguan guangdongpedicab fight dongguan guangdongEleven people have been arrested in a huge brawl in Songshan, Dongguan that injured four on April 23. The fight erupted between rival factions of pedicab drivers competing for business.

A man suspected of dealing drugs was critically injured when shot twice by police on the evening of April 24 in Xiangshui, Boluo County, Guangdong. The suspect had apparently been wielding a knife and is said to have resisted arrest.

How long does it take an administrator to ascertain which one of the 893 available positions for public kindergarten in Guangzhou is suitable for the 7,639 children applying for it? Just ten seconds.

The village of Dafen near Shenzhen is responsible for 100,000 counterfeit paintings a year. Workers of the village produce copycat paintings of fake pictures to be used in hotels and other establishments around China.

On April 22, thousands of bus workers of the Shenzhen East Public Transport Co went on strike in Shenzhen. The workers were demanding a more transparent pay system as well as back pay before they were forced to disperse by “violent” police equipped with shields and batons.

Increasing cloud cover today and tomorrow with a high of 27 degrees Celsius, showers expected Wednesday.

Photos: Sina, Sohu


PRD News Brief: Automated Airport Check-In, End of Dadadi Market, Knife Attack

Posted: 04/24/2014 5:57 pm

auto baggage check in airport baiyun Guangzhou

The Guangzhou Baiyun International Airport is now offering passengers the option of using a unified automated check-in system. Passengers can now check-in their luggage and receive their boarding passes without any messy or ineffectual human interaction.

There are about 50,000 domestic workers in Shenzhen working in a mostly unregulated market, and the demand by middle-class families is increasing. Usually entering China via Hong Kong, these workers that mainly originate from the Philippines and Indonesia are now being brought over directly from their home countries because it is easier to bring these people are “more honest and hard-working”.

dadadi market guangzhou

April 21 marked the very last day of the Dadadi Market, a stalwart Guangzhou institution for cheap bargains. Now closed, the management intends to move the market to another location on Longjian Street, but negotiations have not yet produced any results, something to do with trying to haggle down the price, we think.

China’s first court to specifically deal with intellectual property right disputes will be set in Guangdong province. Last year, there were 88,286 such civil cases. If successful, we may see this pilot program be copied throughout other parts of China.

Numbered in the tens of thousands and having spread to nearby Jiangsu Province, the Yue Yuan shoe factory strike ratcheted up tensions with the detention and disappearance of two labor activistsZhang Zhiru and Lin Dong.

The Guangzhou anti-graft commission has finally responded to charges of corruption by saying that it has “never made a mistake in any of its cases“. A March 28 trial of Dai Yuqing, former head of Guangzhou Daily Group, saw Dai hurl accusations of corruption against Wang Xiaoling, the head of the city’s anti-graft authority; furthermore, Dai had withdrew his confession, an unheard of act in China law.

Two hostages were released safe after a knife attack in Shenzhen in which police subdued the suspect, Wu, during hostage negotiations.

Tragedy in Shiling County near the City of Zhanjiang: father Qiu Jifeng dies suddenly at work on April 14 just weeks after his 5 year-old daughter Wenwen was crushed to death by a falling wall at the Tangjia Elementary School On March 28.

Guangzhou plans to construct 2,500 new digital libraries in three years time. They will be located in neighborhoods across the city and join the 50 prototype models already in use.

The third annual Asian Student Supercomputer Challenge (ASC14) is set to take place in Guangzhou. $29K in prize money will be awarded to one of the sixteen competing university-backed teams that are able to build a system and code like a svelte cheetah.

The Kidz with Heart Mini Olympics will have 250 participants involved in the May 10 Shenzhen fundraiser organized by Captivating International, a anti-poverty charity.

Photo: Nanfang Daily


30,000 Workers Strike in Dongguan, Robots Planned As Replacements

Posted: 04/18/2014 2:58 pm

robot worker labor factory

Labor strife in Guangdong can be had to generalize: as some labor disputes flare up and workers are granted concessions, other labor protesters are convicted for “disturbing social order”. And so, we have the following pieces of news, both announced recently.

There are currently 30,000 workers are on strike at the Yu Yuan Industrial shoe making factory complex in Dongguan, the Associated Press reports. Workers have been protesting the company’s lack of social security and welfare benefits, and have been staging periodic work stoppages at the factory since April 5.

Yu Yuan makes components used in shoes by Nike, Adidas, Reebok and New Balance in a gigantic complex made up of ten separate factories. The Nanfang had first told you about this labor dispute back on April 7.

SEE: Foxconn to Replace Shenzhen Workers with Robots

Striker Cui Tiangang, 31, was adamant on the demands made by the workers. Cui said, “We expect at least an explanation, to give us an answer… We will keep on striking if there is no offer.”

If true to claims made by the organizers, this protest is the largest strike of its kind to ever take place in China. As historic an occasion that may be, Cui’s solidarity for his fellow worker may just be a quaint notion in the not-too distant future.

An industrial development guideline issued by the Guangzhou municipal government is encouraging the use of robots instead of human labor by providing companies with cash rebates. In fact, Guangzhou plans to have 80 percent of all its manufacturing production to be performed by robots instead of humans by 2020.

READ: Strike by Sanitation Workers in Guangzhou
Leaves the City Messy, But Wins a Pay Raise

That’s not all: the Guangzhou government is proposing to construct two or three robot industrial development zones. Each of these in turn will make 100,000 robot units a year by 2020.

It’s simply great that waves upon waves of robots will be given the jobs necessary to provide for their robot families, but a reliance upon technology does not always solve the problem at hand as seen in the documentary about the decline of American prosperity, Robocop (1987).

Sure, it will be great to reap the rewards of a worker that won’t go on strike, and will neither arrest nor harm any senior executives of OCP. Luo Jun, executive chairman of the International Robotics and Intelligent Equipment Industry Alliance, predicts the annual output value gained from the robotics industry in China will equal 300 billion yuan (US$48 billion) in 10 years.

READ: Dongguan Workers on Strike at Samsung Supply Factory

However, industry experts are warning against an over-reliance upon the Western market and its technology as well as the danger of overcapacity. At that point, both robots and workers will be out of a job.

Manufacturing production is a huge industry for China and if this sector should ever suffer a economic breakdown with catastropic consequences, we may be referring to Robocop more often. If it isn’t “I’ll buy that for a dollar!” then it will be this:

“Riches, leave.”

Photo: Robotics Business Review

More stories:
Bra Workers Strike After Being Told to “Jump Off a Roof”
Another Suicide at Foxconn? Employee Jumps Off 9th Floor After Slitting Wrists
Another Worker Plummets to His Death At Foxconn
Guangdong Factory Workers Strike After Being Insulted By Boss


Thousands strike at Nike, Adidas, Reebok factory in Dongguan over invalid contracts

Posted: 04/7/2014 9:02 am

Thousands of workers took to the streets on Saturday at a shoe making factory in Dongguan under the Taiwan-based Pou Chen Group when workers discovered that the factory has cheated them by using invalid contracts and signing up long-term workers with temporary staff social insurance schemes.

Yuyuan shoe factory in Gaobu Town in Dongguan is the biggest shoe making factory for more than 30 world famous sportswear brands such as Nike, Adidas, Reebok and Salomon. It has been operating in Dongguan since 1998 and currently has more than 60,000 workers, China News reported on April 5. It was also the factory where basketball legend Michael Jordan visited in 2004 on a China tour. 

One of the workers surnamed Li said he had been working in the factory for more than 10 years and was on a permanent work contract, but when he used the work contract as a proof to enroll his child into a local school, he was told the contract was not legally binding. Many other workers also reported similar instances, the report said. Migrant workers in Guangdong must present documents proving their long-term residency in the province, consecutive five-year records of social insurance fees, and one-child policy certificates in order to enroll their children into local schools, according to article 27 in the province’s laws managing migrant workers.

In addition to cheating workers by using invalid contracts, workers discovered that many of their social insurances schemes were downgraded to temp staff packages. According to the report, the downgrades were not only discovered in one of Yuyuan’s factories, but several other factories under Yuyuan as well. Workers had been negotiating with the factory, but nothing fruitful had come of it. It eventually escalated into Saturday’s protests.

Meanwhile, insurance standards in the factory also vary, according to the report. One of the workers surnamed Jiang said she paid more than RMB 40,000 ($6,440) for her insurance package, while another worker, who enrolled in the factory around the same time Jiang did, only paid a little over RMB 10,000 ($1,610). It was unclear what kind of packages Jiang or her coworker were entitled to.

One person in charge of one of the factories at Yuyuan declined to comment and said the factory is scheduling another round of negotiations with workers on April 14. The factory’s production has so far been uninterrupted by the protests.

Home page and content page photo credit: Net Ease 


Dongguan workers on strike at Samsung supply factory

Posted: 03/31/2014 7:00 am

Two years ago, South Korean electronics giant, Samsung Electronics Co. was accused of exploiting child labour in several of its Chinese supply factories. Samsung is once again embroiled in labour scandal and unrest as workers from one of its Dongguan supply factories has gone on strike, demanding higher salaries and better social insurance.

Net Ease Finance reported on March 30 that a large-scale worker strike took place on March 29 in Samkwang Science & Technology Co. The company has more than 1,000 employees and manufactures mobile phones and DVD players for Samsung.

One of the workers on strike told the news portal that the Dongguan company deducts RMB 80 (or 8%) from a seasoned worker’s monthly RMB 1,000 salary for social insurance, which the worker claimed to be a large share, the report said.

The report did not specify how many workers participated in the strike and there was no comment from the Dongguan company or Samsung.

In 2013, Samkwang was accused by US-based China Labor Watch of owing payments to workers, discrimination against men, pregnant women, ethnic minorities and applicants over 39 years old, Business Week reported.

Samsung has more than 200 manufacturing suppliers in China. Back in 2012, China Labor Watch accused the Korean company of hiring child labor at six of its plants and two of its suppliers in China.

Here is a photo of the strike scene from Net Ease:

Home page and content page images from Net Ease 


Strike by sanitation workers in Guangzhou leaves the city messy, but wins a pay raise

Posted: 01/22/2013 1:00 pm

An example of the workers’ living quarters

Sanitation workers’ salaries will be increased by 10% this year in Guangzhou following protests and strikes that had left the city feeling their absence, China Daily reports.

Huang Xiaojing, deputy Party head of Guangzhou Urban Management Committee, called for a 10% increase in sanitation workers’ pay in response to a report submitted by legal experts on the treatment of sanitation workers.

According to the report, sanitation companies are poorly regulated and have been known to cut corners and even fail to pay workers for overtime they have done.

China Daily says:

Guangzhou has an estimated 38,840 sanitation workers, who earn an average of about 1,300 yuan a month, almost equal to the city’s minimum wage.
Following the protests, local urban management authorities called on 18 companies, authorized by the government to carry out sanitation work, to give “adequate salaries and other subsidies” to workers, as required by law, Huang said.

In the most recent strike, 300 sanitation workers protested late pay and poor treatment in Liwan District, the paper reported. A recent investigation supported the workers’ claims.

The strike in Liwan District left scenes such as this one on streets

Xie Linglin, a lawyer with the Guangzhou-based ETR Law Firm, called for tighter supervision of sanitation companies.


Bra workers strike after being told to “jump off a roof”

Posted: 11/29/2011 4:11 pm

Striking bra factory workers (Photo from The Age)

Things are not going well in our part of the country.

The global economic slowdown has meant many factories in the Pearl River Delta are seeing their orders slashed at precisely the same time workers are demanding higher salaries and improved working conditions.

Last Thursday, 8,000 shoe factory workers took to the streets in calls for higher wages in Dongguan.  This, on the heels of protests at Japanese auto factories last year.

Now it appears women at a bra factory are equally angry, this time over a bullying Cantonese boss.  The details from Hong Kong’s The Standard:

More than 400 female workers at a bra factory in Shenzhen cut off the power and downed tools after a manager told one to “jump off a roof and go to hell,” state-run media said yesterday.

Workers wearing pink overalls walked off the job at Top Form Underwear, a Hong Kong-listed company, after a Cantonese-speaking boss verbally abused a Mandarin-speaking worker who didn’t understand instructions, the New Express reported.

The strike is the latest in a string of actions driven by worker dissatisfaction in the Pearl River Delta, where millions of migrant workers are employed.

Not exactly Happy Guangdong.

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