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Supply Chain
Factory Strikes Flare Up in China as Economic Woes Deepen
By Marrian Zhou, Nikkei Staff Writer
A flurry of worker protest videos have surfaced on Douyin, the Chinese version of TikTok, in recent months as slowing demand and supply chain shifts heap pressure on the country's factories.
Earlier this year, a user named Jingjing's Memory posted a video of factory workers standing in front of the gate of Huijuchang Textile in the city of Jiangyin. Text overlaid on the footage reads, "The place I worked at for over 20 years went out of business, and now I have no social security and no money." This video is just one of dozens collected into a "Strike Map" compiled by China Labour Bulletin, a nonprofit organization advocating for blue-collar workers. The map shows worker protests and strikes across the mainland, each marked with reasons for protests, the number of demonstrators, and screenshots of social media evidence.
"Worker strikes have reached a new height after the pandemic," Aidan Chau, a researcher at CLB, told Nikkei Asia. "Many protests are related to slowing demand in international trade."
Chau said the organization monitors Chinese social media for signs of worker strikes and calls local worker unions to confirm details and ask if they have been involved.
Many videos follow the same format as the Huijuchang Textile one, showing workers standing in front of a factory gate with captions calling out the company for unpaid wage arrears or refusal to pay workers' social security. Comments under the videos often mention other factories that have done the same thing to their workers. Some videos even call out China's Labour Bureau for failing to step in and help.
Strikes and protests increased sharply in 2023, according to a report by CLB that counted 741 cases in the first half of the year compared to just 830 for all of 2022. At this rate, CLB projects that there could be at least 1,300 protests by the end of the year.
Protests in construction have consistently made up a large number of cases, but the manufacturing sector became a significant driver behind the climb this year. CLB found 10 protests in the manufacturing sector in January and a peak of 59 in May.
The protests were "sparked by a wave of factory shutdowns and relocations" in China's coastal regions such as Guangdong province, according to the report.
Electronics and garment factory workers were the hardest hit, with 66 protests at electronics factories and 38 at garment and apparel factories in the first six months, which accounted for over half of all manufacturing sector protests, according to CLB.
China's exports fell 14.5% in July compared to last year, the country's biggest decline in outbound shipments since the start of the pandemic, according to official customs data. Imports dropped 12.4%.
Victor Shih, a professor of Chinese fiscal policies at the University of California, San Diego, said cooling global demand and the pandemic's lingering effects on people's wallets have deeply affected the manufacturing sector.
"Because of the lockdowns, a lot of Chinese people didn't have employment for months at a time. At the end of the pandemic, their savings were depleted," Shih said. "At the same time, U.S. consumers, who also helped prop up China's economy because China exported a lot of stuff to the U.S. in 2021 and 2022, are starting to spend less money because that extra income from the stimulus in 2020 is running low."
China's manufacturing sector is a vital source of employment, but slowing demand and shifting supply chains are leaving many workers vulnerable.
China's garment sector has been hit by layoffs and a spate of worker protests this year, labor groups say.
"So you have double pressure from Chinese people not being able to spend and then Americans and Europeans also having less ability to spend," he added.CLB's Chau said his team found an Adidas supplier in Zhejiang province that halved wages to about $300 to $400 a month due to a sharp drop in orders this year. Workers at a Taiwanese-owned garment factory went on strike to demand higher wages. Worker unions became involved but were only able to negotiate an increase of about $50 to $100. Adidas did not immediately reply to a request for comment.
"Most garment workers are women in their 30s and 40s and they have worked at the same place for years," Chau said. "The recent layoffs have largely affected this group."
China's manufacturing sector has long been sensitive to global market forces and wages, but worsening U.S.-China relations have added another source of pain for "the world's factory."
Stung by the supply chain chaos unleashed by the pandemic, many multinationals have started shifting their supply chains out of China, largely to Southeast Asian countries like Vietnam, Li Qiang, director of China Labor Watch, said. Even Chinese companies have been moving their factories out of the mainland to places with lower labor costs, such as Africa.
When factories in China are in trouble, Chau added, they usually do not close down immediately. Instead, they delay wages, borrow more money, and hope for trade to warm up.
Unfortunately for such factories, China's reopening after the pandemic failed to deliver a much-anticipated economic rebound.
CLW's Li said workers resort to strikes because they are more effective than other approaches. "Worker protests are often more effective than going through the legal system, which is a lengthy process and cannot meet workers' needs," Li said. "China does not have a legal framework that workers can rely on, but protests could put pressure on the company and local government officials to resolve the issue."
Both Li and Chau say local worker unions which are supposed to solve problems for workers have not been doing enough. "Worker unions in China have not been very effective in protecting workers' rights," said Chau. "Worker unions attempt to calm down the workers and stop the strikes but they have not represented the workers' interests."
China's manufacturing sector has long been sensitive to global market forces and wages, but worsening U.S.-China relations have added another source of pain for "the world's factory."
Stung by the supply chain chaos unleashed by the pandemic, many multinationals have started shifting their supply chains out of China, largely to Southeast Asian countries like Vietnam, Li Qiang, director of China Labor Watch, said. Even Chinese companies have been moving their factories out of the mainland to places with lower labor costs, such as Africa.
When factories in China are in trouble, Chau added, they usually do not close down immediately. Instead, they delay wages, borrow more money, and hope for trade to warm up.
Unfortunately for such factories, China's reopening after the pandemic failed to deliver a much-anticipated economic rebound.
CLW's Li said workers resort to strikes because they are more effective than other approaches. "Worker protests are often more effective than going through the legal system, which is a lengthy process and cannot meet workers' needs," Li said. "China does not have a legal framework that workers can rely on, but protests could put pressure on the company and local government officials to resolve the issue."
Both Li and Chau say local worker unions which are supposed to solve problems for workers have not been doing enough. "Worker unions in China have not been very effective in protecting workers' rights," said Chau. "Worker unions attempt to calm down the workers and stop the strikes but they have not represented the workers' interests."