The Philippine Online Chronicles

China is now the world's largest producer of electronic products. In its industrial zones, all along the coastline, reside high-tech factories which supply the world’s largest multinationals. American-owned Hewlett-Packard and Dell, Taiwanese-owned Acer and Chinese-owned Lenovo all make up nearly half of the global PC market. From mobile phones, motherboards, computer chips and optical mice, Chinese workers produce them all for an increasingly hungry global market. They ship to other Asian countries, to North America, Europe and even Africa. China has become the world’s factory, producing everything from milk to shoes to flat screens. But at what cost?

Foxconn Technology group is a Taiwanese-invested company operating in the mainland. With over 800,000 employees, it is the world's single largest manufacturer of electronic and computer parts. Foxconn services giants such as Apple, Sony and Cisco.

Recently the global high-tech industry was rocked by scandals of worker suicide attempts at Foxconn, a string of 13 so far. 10 have died. The first reported suicide was in July 2009. Sun Danyong, 25 years old, was reportedly subjected to "unbearable interrogation techniques" after he was held responsible for a missing iPhone prototype. He jumped to his death off of a 12-story building. In January this year, 19-year-old Ma Xianggan's body was found near the stairway of his dormitory. Initial police investigations ruled suicide, although his family claims he may have been beaten to death. Another 19-year-old, Li Hai, killed himself after only having worked at Foxconn for 42 days. Rao Shuqin, a girl of 18, joined Foxconn in March. A month later she "fell" from her dormitory in Longhua. She survived.

Observers have noted the spate of suicides were indeed highly irregular. What could have driven these young people to kill themselves? There have been a range of reactions and attempts at explanations. They may have been put under extreme pressure and could not cope. Foxconn, afterall, is known for its “military-style management” where security guards scold or beat workers. Chao Liang, the ninth to have committed suicide on May 14, had four stab wounds as he flung himself off the roof. The nature of his death cast doubts as to whether he did indeed commit suicide or whether foul play involving Foxconn security may have been involved.

In their defense, the Taiwanese claim the Chinese government’s excessive publicity over the issue is an old trick employed to prey on Taiwanese investors. News casting a bad light on the company is not good for business and indirectly favors competitors. Sociology professor Jing Jun of Tsinghua University claims the suicides should not be blamed on the company's practices. After all, these were young people who were probably unable to cope with their new environment and being away from home.

But the Foxconn suicides may also hint at a wider societal change wracking the 21^st Century Chinese. It is a country that has undergone rapid and dynamic changes in the last three decades. Within its borders, a massive flow of migrants are leaving the countryside to work for the factories in cities.

21^st Century Sweatshops?

The most obvious cause for the suicides, some quarters insist, is the environment in which Foxconn employees labor. These accusations are not without warrant as China’s high-tech industry has been notorious for “sweatshop conditions.” But Apple’s chief executive Steve Jobs has been quick to assert that its factory in China “is not a sweatshop.” However it is interesting to note that Apple's own audit report in 2008 declares nearly 60 percent of its suppliers violated the company's code of conduct guidelines on work hours and days off.

A study conducted by some NGOs reveal how chronic abuses remain prevalent in China's electronic hardware sector. The study indicates that the primary areas of concern for workers are wages, work hours, work conditions, labor contracts and lack of information on workers' rights.

The report relays that newly-hired workers are not compensated with the minimum wage prescribed by law. Overtime work is also not paid at premium rates. A contract company, Yonghong, even fines its workers if they do not maintain the proper distance to their work table as indicated by a yellow line on the floor. Because the distance is uniform, some workers who may unfortunate enough to be taller or shorter than the norm will have to suffer various aches and pains.

Another subcontracting company, Primax, does not furnish its workers copies of their labor contracts. Workers of Lite-On have no knowledge of their company's corporate social and environmental responsibility manual nor of the corporate codes of their client companies Apple, Motorola, Toshiba and others.

Workers at Tyco Electronics are exposed to a colorless glue in the assembly line. They develop itchy red spots on their hands but are not provided with health check-ups.

While in general conditions have improved, high-tech brands also show varying commitment to transparency and compliance with the China’s Labor Law which took effect in 2008.

In another independent report by a German NGO, they find that young women, aged 16 to 25, are more likely to get hired than men. Hong-Kong based company Excelsior imposes 10-hour workdays at peak season when the Chinese Labor Law indicates only 8 hours. The law also designates a total of 36 hours overtime per month. At Excelsior, workers clock in nearly 200 hours overtime per month. Often they have no choice in working beyond the end of their shift. They are not consulted and have no right to decline.

China’s internal migration – the largest stream in the world

The young and hopeful trooping from the Chinese hinterland are at an instant disadvantage once they enter the cities in search of work. To date there are an estimated 200 million rural-to-urban migrants in China, equivalent to international migrant estimates in the world today.

While already low by any standard, wages are still nominally higher than what can be earned from farming in the rural areas. Workers flock to the cities, leaving behind families. But mobility is not simply a matter of choice, as China’s household registration system, hukou, bars citizens born in rural areas from taking advantage of welfare and social services in urban areas. Hukou is a virtual barrier which would make it difficult to simply migrate to the cities. Those who do overcome this barrier do so at an enormous cost.

The Suicidal Chinese

What is probably most troubling is that the Foxconn suicides are a small slice of the bigger picture. There have been other cases of suicide attempts or deaths under mysterious circumstances in other places.

In March 2008, an employee of China's best-known telecommunications company Huawei, jumped to his death from the third floor of the company's cafeteria. He was the sixth to die in such a manner in the period two years prior. Like Foxconn, Huawei also has a reputation for “militarized management.” In 2007, Huawei's CEO Ren Zhengfei even admitted to the extraordinary events in his company - "At Huawei, employees are continuously committing suicide or self-mutilation. There is also a worrying increase in the number of employees who are suffering from depression and anxiety..."

There is evidence however that stress at the workplace compounds other kinds of societal pressures. A survey report conducted in 2005 reveal some worrying trends. At the time the annual suicide rate was estimated at 250,000. An additional 2.5 million to 3.5 million are unsuccessful attempts. According to the Chinese Health Ministry, suicide was the fifth most common cause of death in the country. There are 22 deaths by suicide per 100,000 people. This ratio is 50% higher than the global average.

Workers of China, Unite!

Because American firms are directly involved, American sentiment has largely been sympathetic to the plight of workers. The LA Times says it is only “natural” that Chinese workers would expect to get better wages and benefits, as American workers did a century ago. As the United States finds itself in a perennial trade deficit with China, and as American workers are much more “expensive” than the Chinese, it is also in certain Americans’ interest to support calls for higher Chinese wages. It is interesting to note, however, that American multinationals operating in China actively lobbied against the early drafts of the 2008 Chinese Labor Contract Law.

The Foxconn suicides may be an indication that China’s new generation of workers are unable and unwilling to tolerate the kinds of abuses their forebears had to endure during China’s “rise” as an economic power. There have been all sorts of labor unrest in factories all over the country.

At Taiwan-owned United Win Technology, four workers died from overexposure to toxic chemicals. In January this year, over 2,000 of their employees gathered at its factory and proceeded to destroy facilities and vehicles. Japanese carmaker Honda has also been plagued with strikes for the past few weeks. Employees demand a 72 percent raise and higher overtime pay. This week Toyota has also been hit by labor unrest.

Some observers note that the Chinese Communists Party’s reaction to the spate of labor unrest has been curious. Ordinarily the Party does not tolerate any sort of unrest from its citizens. But the tightly-controlled Chinese media have been covering the suicides quite well for the past few weeks. If the coverage is any indication, perhaps the Chinese leadership is now finding it is no longer in its interest to maintain very low wages. It has had to rely on cheap labor to attract the billions of dollars in foreign investment in the last three decades.

Now that China has earned billions in capital accumulation, now that technology transfers have been made, and now that China can itself boast of firms large and strong enough to tough it out with American and European competitors, perhaps it can now afford to raise wages as well.

Since the suicides, Foxconn has agreed to increase its workers' wages by 66 percent based on performance. The wage hike will take effect on October 1. Meanwhile, another Foxconn worker Yan Li, died of exhaustion from having to work non-stop for the last four weeks.