Trade union concerns update: People’s Republic of China

November 2007 – November 2008
IHLO

General climate

Official emphasis on social harmony and a “harmonious workplace” continues. Government support for the ACFTU also remains high. Natural disasters such as the snows around Chinese New Year 2008, at least two large scale floods and the Sichuan earthquake served to emphasis social stability. While the official response to the snowstorms was perceived as too little too late the official response to the Sichuan Earthquake for the most part led to increased support for the leadership. However a few arrests and the muzzling of parents who have been fighting for recognition of the authorities’ role in the deaths of school children during the earthquake (due to ‘tofu’ construction) led to some internet and media criticism. A series of taxi drivers’ strikes in many cities, including Chongqing, Sanya and Guangzhou in late 2008 met with initial repression but with conciliatory moves later on and even some grudging concessions in some places of the drivers’ demand for trade union representation. The melamine poisoned milk scandal showed that not only infants’ lives were at risk due to lax implementation of safety laws, but also the health of tens of thousands of workers. But the ACFTU carried on blithely, holding its 15th Congress with traditional pomp and asserting “trade unions with Chinese characteristics” and “harmonious labour relations” while all around the country, tens of thousands of jobs were being lost as a global economic crisis bit hard.

Nevertheless, some optimists see potential commitment to increased democracy within the communist party during upcoming leadership shifts. In speeches and articles top security officials acknowledged the heightening of social conflicts, but continued to blame “hostile” or “enemy forces”. Social harmony and a heightened focus on the redistribution of economic gains continued to be seen as the answer to social unrest.

Law
Legal reforms have been proceeding apace in order to achieve the CCP’s overriding goal of making the rule of law “the principal tool to govern the country.” Legislation on a wide range of issues such as property rights, labour contracts, administration of lawyers, access to public records, and the handling of emergencies have been adopted. But the party’s continued dominance over, and interference with, judicial institutions means that the overall the legal system remains weak. Chinese citizens face immense obstacles to accessing justice, in particular over issues such as illegal land seizures, forced evictions, environmental pollution, unpaid wages, corruption and abuse of power by local officials.

Economy
GDP grew by 9% in 2008, the slowest rate in seven years thanks to the global financial crisis[NOTE 1], after having reached 11.4% in 2007, a 13-year high and the fifth consecutive year of double-digit expansion.
Over the previous five years, the economy had been moving – at least in part – to a high-growth, high-investment, and high net export structure and away from the low cost, low profit model of the Pearl River Delta. However experts suggest three major imbalances in the economy indicate that the current growth model is not sustainable. The first is between internal consumption/demand and external demand. The second imbalance comes from energy and environmental strains while the third is the rapidly rising income inequality.

Unemployment and underemployment among unskilled workers is rising, a paucity of skilled workers has led to severe recruitment and retention problems. Inflation became a serious problem in 2007, caused mainly by rising prices for food (up 12.3%), and to a lesser degree housing and fuel. Inflation slowed to 5.9% in 2008. Wage increases have not kept up with inflation. The minimum wage remains effectively the maximum wage for many migrants and the difference between the minimum wage and the ‘average’ wage in an urban area has been growing (X3).

Chinese companies aboard
Chinese investment aboard has continued to increase, with companies having been urged to “go abroad”. Support for Chinese MNC investment in foreign MNCs also continued and several gains have been made in areas such as mining. However mainly in response to international pressure, China took some public steps to help ameliorate the human rights crisis in Darfur, Sudan, having appointed a special envoy on Darfur and agreed to contribute peacekeeping troops. However it continued to block international efforts to impose sanctions. In addition, while China consented to some critical UN Security Council language following the 2007 repression in Burma, but refused to speak strongly itself or take action such as suspending military aid and cooperation.

Strikes and protests
The use of strike as a tool for workers in industrial disputes continued to grow as did academic support for the right to strike to be clearly reinstated. Some media reports have reported the support by ACFTU branches in the south for the right to strike.

According to some official statistics, labour dispute arbitration organizations at various levels dealt with 1.72 million cases involving 5.32 million employees from 1987 through 2005, with a growth rate of 27.3 percent annually. Since the introduction of the labour contract law, there have been reports of a five fold increase in the number of labour arbitration cases with some areas reporting up to 15 times increase. No new officials have been put in place however resulting in numerous bottlenecks. An increasing number of labour disputes end up in the law courts. The major causes for disputes continue to be wage arrears, benefits, and social insurance issues while around 20 percent arose from conflicts over the termination of labour contracts. According to an official with the Ministry of Labour and Social Security (MOLSS), the total amount of estimated wage arrears between 2005 and July 2007 reached some 66 billion Yuan with arrears in the construction industry alone reaching around 3.3 billion. Reports of the beating of migrant workers (usually in construction) who were protesting unpaid wages continued to emerge.

There is an ongoing year-on-year increase in collective cases being brought to court or to arbitration, especially those of migrant workers. This has implications for labour dispute settlement, as well as migrants' growing consciousness of their rights - migrants are emerging as a more powerful bloc in society. One 2005 study showed that the number of collective labour disputes nationwide increased more than five times, from 1,482 in 1994 to 11,000 in 2003 and almost double that in 2004 to around 20,000. Statistics show some 14,000 collective labour dispute cases in 2006 (these figures represent a drop over 2005 due to revisions of  the statistical methods used to compile the data).

The often quoted figure of 87,000 mass incidents in 2006 has led to the authorities halting the release of public figures but large-scale incidents have been reported ever since in almost all of China’s 34 province-level administrative units. Several demonstrations involved tens of thousand of people, such as in Yongzhou (Hunan) in March 2007 and Xiamen (Fujian) in June. Statistics announced in December 2007 by China's National Bureau of Statistics show that in 2006 public security entities handled 599,392 cases—such as “disturbances of social order,” “disturbances in public spaces,” “trouble-making activities,” and “obstruction of public service execution,” among which 583,180 have been investigated and resolved.

Harassment of labour groups and activists

Recent years have seen an increased crackdown on lawyers defending labour rights cases and related lawsuits. There has been a clamp down on the NGO sector and in particular labour rights groups. Many mainland groups established to support workers provide legal aid for workers or offer training found themselves the object of official scrutiny, investigation, monitoring and harassment. Advice for workers involved in mass layoffs in the latter half of 2007 formed the backdrop behind the repeated destruction of the Dagongzhe Workers centre in Shenzhen and the brutal stabbing of its lead worker, Huang Qingnan. Huang was stabbed repeatedly by unknown assailants. After 14 months of delay, a hurried hearing for suspects in his case was held on 16 January 2009. Bizarrely, Huang’s lawyer was asked to undergo a body search, the motives of the assailants was not established, they all pleaded guilty and the hearing was over in a few hours.  Thus the potential real culprits behind the attack and their motives were allowed to stay hidden.

Detentions and releases

There were two releases of high profile long term detainees in recent years: After 16 year’s imprisonment, Hu Shigen (胡石根) was released on 26 August 2008. Hu was a founder member of both the Free Labour Union of China (FLUC) and the China Liberal Democratic Party. He was arrested in May 1992 along with fifteen other unofficial trade union and party activists from the two groups, he was charged on twin counts of “organising and leading a counterrevolutionary group” and “engaging in counterrevolutionary propaganda and incitement.” Zhang Shanguang was released in July 2008, two days before his scheduled release date. Zhang was originally sentenced to ten years imprisonment in 1998 after founding the Association to Protect the Rights and Interests of Laid-Off Workers. There had been numerous reports of torture and ill treatment.

The trend of short term detentions continued – it is believed that this is a deliberate policy avoiding longer term detentions in order to limit the notion of ‘martyrs’ and to avoid potential international and domestic solidarity campaigns. Most workers detained for staging protests and strikes were detained under administrative punishments for 7 to 14 days but several were assigned long term sentences of up to three years. Some reports of beatings emerged and one ‘rumour’ of a killing in the Shenzhen area. In 2007, the number of Chinese political prisoners rose to its highest level in eight years. According to reports - arrests for 'endangering state security' rose from 561 in 2006 to 742 in 2007.  

 Law reform
One of the most significant legislative initiatives in 2007 was the new labour contract law, which was finally passed in June 2007 after several drafts and much public consultation and debate. The law, in its final version, contains significantly fewer references to the rights of workers to negotiate with employers except through the official trade union. The Law is significant however in that it addresses some of the crucial failings of the current labour law and provides specific penalties and remedies for failing to observe labour laws and regulations.
It seeks to clarify the nature of a labour relationship between workers and employers – including those many instances where workers have no formal contract – which is crucial for workers seeking redress for unpaid wages or compensation where the onus to prove the labour relationship was on the workers themselves [A survey by the National People’s Congress had found that fewer than 20 percent of small-and-medium-sized private companies had signed contracts with their workers,] It includes penalties for companies which fail to provide proper written contracts, penalties for breaking contract terms. Significantly, it also attempts to legislate on the fast growing use of contract labour. The law appears to bolster the role of the ACFTU – as distinct to worker representatives and worker congresses - in discussions on redundancies and other major changes.

In the run up to the law’s coming into force on 1 January 2008, there were many reports of mass law offs at both state owned enterprises as well as smaller enterprises, most notably in the Pearl River Delta but also to varying degrees all over the country. A wave of protests and strikes grew in response to managements’ perceived lay offs designed to shed companies of long term employees in advance of the law – those who would be entitled to non fixed term contracts. As with most legislation in China, the most crucial issue is the implementation of the law. Implementing guidelines were not issued prior to the legislation’s taking effect, leaving some of the more nuanced clauses in the law open to management inspired interpretations.

The implementing regulations were issued almost a year late, in September 2008. The regulations are designed to help companies, authorities, workers, the ACFTU and the law courts among others know exactly how to deal with some of the complex or vague articles in the law. The regulations are neutral and appear to adhere closely to the text of the law – neither adding more to one side or the other.

IHLO investigated the implementation of the law and found several widespread procedures expressly designed to avoid the law and which limit compliance. In addition, many contracts remain limited even if they are signed and given to the workers. Some commentators within China have expressed the view that the new law has so far been a lose-lose situation for both workers and employers as it has not granted workers more fundamental rights and has failed to allow them to organize.

See here for a detailed analysis of the effects of the law after six months (June 2008) New Labour Contract Law: Myth and reality six months after implementation http://www.ihlo.org/LRC/WC/270608.html

Collective Bargaining and contracts
According to ACFTU statistics for 2006 (provided in November 2007), the number of collective contracts signed across the country reached 862,000, increasing 108,000 over 2005, up 14.3%; with 1.538 million enterprises involved, increasing 160,000 from a year ago, up 11.6%; and with 112.455 million workers involved, increasing 8.615 million over the previous year, up 8.3%, and the number of workers involved accounted for 58.6% of the workers in all enterprises across the country. The number of sectoral level collective contracts (as opposed to individual employer contracts) is unknown. However the majority of contracts available still appear to be formulaic repetitions of articles from the Chinese labour law, reflect minimum legal requirements and many elaborate upon too few areas of concern to be of much use to workers. Almost all contracts are drawn up by employers.

Collective bargaining remains severely handicapped by the absence of truly independent organisations on either side. The subordinate position of the ACFTU to the government and the Party means that it will often work with the employer in drawing up collective agreements which simply mirror - at least on paper - the labour law. There is very little actual bargaining and in fact the Chinese term employed is "collective consultation" rather than "collective bargaining" although the new Labour Contract law appears to favour the term bargaining over consultation. Very often workers are offered no formal contract at all, especially migrants in export processing zones (EPZs). If they do sign a contract, they are rarely given a copy. ACFTU officials have been quoted as opposing wage increases in order to avoid triggering demands for similar deals.

Nevertheless, some provinces are enacting specific collective contract regulations, which if properly implemented may improve the negotiation process and the quality and scope of the resulting contracts. For example Hebei province implemented new Regulations on Enterprise Collective Consultations between Labour and Management which state that the consultation process should give equal weight to the interests of the enterprise and the workers.   

In a slightly different approach – which stresses the role of the state run union In August 2007, the Shanghai Municipal authorities adopted the Shanghai Collective Contract Rules (the “Shanghai Rules”) which took effect in January 2008. The Rules state that collective bargaining is to be done by employer and employee teams of no more than three people. If the company has a union the union shall nominate the team and in the case of a company with no union, “an upper-level union organization shall guide the company’s employees in selecting and appointing the leader and representatives of the employee team”. The law also gives examples of mandatory collective bargaining and  details instances where regional or industry-specific union branches  can negotiate collective contracts (regional and/or industrial level) bargaining with companies in certain types of industries.

Employment Promotion Law
Also in 2007, a new law on Employment Promotion was issued (effective 1 January 2008) along with supporting regulations (the Regulations on Employment Services and Employment Management).These two pieces of legislation are ostensibly designed to legislate against the currently widespread and endemic discrimination againstmigrant workers, women and people living with the Hepatitis B Virus (There are around 120 million people living with HBV in China) as well as regulate recruitment agencies. Perhaps most significantly the law for the first time states that migrant workers (from rural areas) should have the same rights to employment as their urban counterparts, and those who have been living in a city for more than six months will be entitled to unemployment benefits and services from the local government. As with all legislation, the ultimate success or significance of the new laws will depend on the proper implementation and monitoring as well as punishment of violators.

In addition, a new law on Labour dispute arbitration and mediation was passed in December 2007 which took effect in May 2008. The law aims to provide a “fair and timely” settlement of labour disputes. It allows an enterprise to establish its own labour mediation committee to solve internal disputes. Such a committee should include employees and management representatives. The new law also attempts to reduce costs for workers, has increased the length of time allowed for the initiation of a case (from 60 days to 12 months) and is claimed to have streamlined the process – allowing more workers to start and end the process. Officials reported that the new law would cover disputes over collective contracts, pay, occupational injuries, compensation, working times, holidays, social insurance and pensions among other things and that the arbitration documents would carry legal standing. As of now the impact of the new law has not been adequately monitored but it is greatly needed to link in with the increased number of cases since the labour contract law.

ACFTU Campaigns and activities
In keeping with the nationwide emphasis on the development of a “harmonious society” and in particular of a “harmonious workplace”, the ACFTU has been promoting itself. ACFTU Chairman Wang Zhaoguo called on trade unions at all levels to earnestly perform their duty of protecting workers’ legal rights and interests and to observe the principle of “organize the unorganized and fight for labour rights” in real earnest…

Wang is also a member of the Communist Party's Politburo and a former governor of Fujian province. His “promotion” to the Politburo can be seen as a reward for the ACFTU’s recent work especially in Wal-Mart and other similar high profile cases as well as a reward for his work as the head of the United Front Work Department of the CPC Central Committee – the organisation remains firmly under the leadership of the Party, the interests of which always take priority. Wang was also re-elected at the 15th National Congress of the ACFTU in October 2008, which passed off without incident despite the economic crisis and burgeoning job losses.

The organization is under huge pressure to ensure that large-scale collective action is avoided and to help stem the increasing rise of wildcat strikes. It is also expected to increase its own visibility and boost the Party’s control in the workplace. The ACFTU has been visible in high profile campaigns against abuses in foreign owned MNCs and in particular has targeted Fortune 500 companies urging a 90 -100% membership rate by the end of 2008. Throughout this period several blacklists were issued to the media. The ACFTU has also continued to support campaigns for wage arrears and retraining for those laid off or unemployed. Some ACFTU pronouncements have focused more on trade union language and show concern for worker’s interests and rights. However, welcome though these initiatives were, there have been no signs of the organisation making efforts to distance itself from its constitutional acceptance of Party leadership.

Membership
Under the current Trade Union Law, (Article 10), a basic-level union committee shall be set up in an enterprise, an institution or a government department with a membership of 25 or more; where the membership is less than 25, a basic-level union committee may be separately set up, or it may be set up jointly by the members in two or more work units, or a person may be elected to organize members in various activities. This is vague but essentially leaves it up to the workers to set up a union and does not require all units to automatically establish one. For several years some companies – most publicly Wal-Mart – had said they were not stopping unions from existing but that simply the workers had not yet expressed the wish to establish one. To counter this argument, in July 2006 Wang Zhaoguo publicly proposed an amendment to the Trade Union Law requiring foreign enterprises to establish ACFTU-affiliated branches. Media statements in 2007 appear to suggest that the interpretation of the law is shifting from “shall” to “must” form a trade union for example the People’s Daily of 17 October 2007 stated that “China's trade union law stipulates that a company with more than 25 employees must have a trade union organization, formed by employees on a voluntary basis. No organization or individual should restrict them from joining unions”.

According to the ACFTU, 61.97 million migrant workers had been admitted into trade unions across China by the end of September, 2007. These figures represent a remarkable increase although, as with much of China’s official statistics, serious questions remain as to verification of the exact numbers.

Shenzhen Experiments
Two new laws were issued in Shenzhen which appear to serve as potential experiments for other regions in legislating industrial relations and interrupting trade union activities and policies. The first local legislation on labour relations in China, previously known as” Draft Regulations on the Growth and Development of Harmonious Labour Relations in the Shenzhen Special Economic Zone”, was initially discussed by the Standing Committee of the municipal People’s Congress on 29 May 2008. The regulations attempt to offer the city sophisticated details for implementing the “Labour Contract Law”, in terms of signing the contract, overtime, overtime wages calculation, labour disputes mediation, collective consultation, severe conflicts of labour relations, etc. Its name was changed to “labour relation regulations of Shenzhen SEZ” for the second round of discussion, in order to reflect its legislative nature. However the new regulations would only cover Shenzhen SEZ, which is the downtown Shenzhen, while most of the labour disputes take place in Baoan and Longgang districts, on the outskirt of Shenzhen city, where most factories are located.

Shenzhen's first implementing regulations for the Trade Union Law came in 1993, then a revised version in 2003 and in under five years, another revised version followed. By December 2006, there were 33,808 basic level unions, with 3.038 million members in Shenzhen, which is unimpressive for a city with 120,000 enterprises and more than 8 million. The Implementing Regulations for the Trade Union Law (Shenzhen) outlines areas such as the need for union officials not to be also company managers, more emphasis on collective bargaining and a softer attitude to strikes. Though the new version still avoids the word “strike”, it shows more tolerance to stoppage and slowdown. In reality, it happens very often in the Shenzhen area. In addition the trade union's role is redefined with a notable shift – at least on paper away from pacifying workers and towards representing them
 

Wal-Mart
That the ACFTU managed to establish unions in Wal-Mart (and so many in such a short time) is clearly a success for the ACFTU, for the government and in some respects for Wal-Mart management itself, but not necessarily for the workers. The evidence, however small, that these union branches may encourage workers in struggles over pay and conditions is, however, a success and one of the few reasons for the international union community to support such “organizing” drives. One analysis translated four accounts of four different Wal-Mart branches and showed the internal dynamics within the ACFTU with the higher levels attempting to squash the emergence of an enterprise level ACFTU branch which tried to represent its members. In one case local Wal-Mart union officials did strive to maintain independence. However Wal-Mart management succeeded in getting the local union on its side causing the enterprise union to seek help  from the national ACFTU headquarters. This is a pattern of intra-ACFTU discord that we are seeing in many different cases. The local unions are deeply entrenched in local politics and business to resist or want to resist managements or indeed to support troublesome enterprise unions. Some enterprise unions then try to seek support from provincial or national level ACFTU leaders who are following more closely the general push towards reform. They do not always succeed and obviously some exceptions exist where the local branch is the more progressive.

“It has become a pattern that whatever Wal-Mart management does, the city-level union seconds it….” The comments such as this made in blogs show that most workers in China do not totally dismiss the ACFTU. They can be disappointed and cynical about Chinese trade unions, but there is no mention of a desire to set up an independent trade union. When given the space to struggle against management through existing legal and institutional structures, if competent and committed leadership emerges they are willing to rally around it.
In July 2008 Chinese and overseas media reported on the signing of a collective agreement between local Wal-Mart managements and their respective union branches in various cities. The first was in Shenyang which saw an agreement around an eight percent wage increase. This was publicised as a success despite the fact that in some areas wages were increasing by around 15 to 20 percent to keep up with inflation. The minimum wage however remained low. The original Forbes article highlighted the “win win” nature of the agreement: Dave Orlins, president of the National Committee of U.S. China Relations, said the agreement is crucial to Walmart's business. "To expand in China, one needs government support," he said. "This is what you should be doing in China." And Wal-Mart knows as much: “We support these efforts because of the valuable, mutually beneficial partnership the government-run union offers and because of their commitment to assisting businesses in our growth and development in China," said Kevin Gardner, a Wal-Mart spokesman.

Since the original contract was signed on 14 July in Shenyang, many other Wal-Mart China branches have signed collective contracts with Wal-Mart China trade unions. Interestingly, 16 of these are in Shenzhen. The agreements include the standard details of contracts, remuneration, working hours, insurance, welfare benefits and training. In Shenzhen at least, the enterprise unions will also be able to negotiate with the company over increased wages in December each year with the minimum wage higher than the local official minimum wage standard announced by Shenzhen municipal government. Management has also reportedly agreed that the unions would provide a standard collective contract text - a joint agreement between the ACFTU and Wal-Mart headquarters for signing by all Wal-Mart branches (currently estimated at around 100). In tandem with the rash of signed agreements, two internal documents circulated, indicating that the drive for collective contracts was increasing. Reportedly entitled "The Opinion on the Making of Collective Bargaining Offers" and "The Opinion on the Development of a Group of Collective Bargaining Instructors", the documents  gave instructions for higher level unions to support enterprise unions in collective consultation and agreements including helping finalize salaries and financial details. The higher level unions were also asked to negotiate with the enterprise management if the enterprise unions themselves were having difficulties. The higher level unions were also asked to “organize and manage teams to assist with collective bargaining.Teams must consist of individuals who have experience in employment matters, such as teachers, lawyers, social workers and managers from other companies.”

See here for the IHLO Recent ACFTU Activity: Collective Contracts and Campaigns[August 2008]  http://www.ihlo.org/LRC/ACFTU/180808b.html and China labour Translations http://www.clntranslations.org/article/30/draft

Health and Safety
In 2007, the official figures cited some 101,480 deaths. This included 86 serious accidents killing 1,525. In 2007 there were 1,760 various accidents killing around 2, 900 people, including 21 ‘major’ accidents which killed 454. Despite a reported decrease in coal mine fatalities of around 20%, coal mine accidents continue. IHLO produced a report in September 2008 focused on a period of four weeks and counted around 200 dead from various mine related accidents. Cover-ups of mine accidents continue as does the links between corrupt officials and mine owners. The total number of mine related deaths between 13 August and 11 September 2008 was 198 confirmed dead, 45 injured, 38 trapped/whereabouts unknown and 50 rescued. The still ongoing scandal over the poisoning of milk with melamine has exposed once again shoddy practices in the food industry but failed to highlight safety concerns for Chinese workers. Six babies were killed and nearly 300,000 others were afflicted with kidney failure or kidney stones.

Forced labour and trafficking
The scandal over children and others found working as virtual slaves in brick kilns in Shanxi Province in the summer of 2007 led to the release of several hundred people. Workers were forced to toil from 5 am until 1 am the following day. The original brickworks were owned by the son of the local Communist Party secretary. The case was first exposed via the Internet jointly by 400 fathers on a well-known BBS. They said their children were sold to kilns in Shanxi for RMB 500 (US$65) each and they had – using their own initiative - rescued more than 40 children in two months. It was also reported that some local labour officials helped sell these children. Some officials even sold a rescued child to another kiln. Although the ACFTU has staff numbering more than 100,000 for just Shanxi Province alone, the problems of the brick kiln manufacturing industry appeared to have gone unnoticed for many years. As many as 95 officials, according to the Shanxi provincial government, were punished in the wake of the scandal. However, most received only a warning, suspension from work for a limited period of time and a demotion. None has been severely punished or sentenced.  

Child labour continues to be a serious problem in China and according to recent reports the problem is only increasing. While the authorities have recognized the need for the elimination of child labour and have implemented several measures designed to combat the problem, the practice continues throughout the Chinese industry and in particular in the private sector. Among those employing children are the firework industry, piece work at home (anything from car seats to plastic flowers), entertainment (informal), begging – organized groups of beggars and street sellers such as flower sellers, singers, etc, – brick kilns, and prostitution (trafficked and other). A People's Daily Report cited an investigation into labour conditions in Shandong province's Jinan City, saying the use of juvenile labour is most prevalent in the following industries: toy production, textiles, construction, food production, and light mechanical work. Child labour, including the worst forms of child labour, prevails due to poor enforcement of legislation, a lack of resources (both financial and manpower) targeted at the problem and the failure of the government to address underlying causes of child labour, such as lack of access to free education and equal employment opportunities for the rural poor and migrant communities.

Beijing 2008 Olympics
Protests in the Tibet Autonomous Region and the subsequent crackdown as well as protests during the Olympic Torch relay led to polarized opinions and increased nationalism. The actual ceremony impressed most observers and foreign media. Coverage of the lack of protests in the so-called ‘protest zones’ and the arrest and sentencing of several who applied for official permission to protest, was muted. Despite temporary regulations in effect from January 1, 2007, to October 17, 2008, that gave correspondents freedom to interview anyone who consented, foreign journalists were harassed, detained and intimidated by government and police officials. The temporary regulations did not extend to Chinese journalists. Official efforts to rid Beijing of undesirables ahead of the Olympics accelerated the eviction of petitioners and some urban residents. An estimated one million migrant construction workers were brought in to help build the Olympic facilities and infrastructure. They were reportedly removed shortly before the Games began but security was tight around the sites. When a subway tunnel under construction collapsed in March, trapping six workers, the first step the employer took was to prevent workers from reporting the accident by confiscating their mobile phones.

Financial Crisis and factory closures
The widespread claim that the new labour contract law would increase costs for businesses by up to 40 percent proved – as expected – to be disingenuous and at most such increase would only be seen in companies which were already ignoring existing laws and policies on wages, social insurance and other benefits. Rising costs of production, transport, fuel, food, rental and a rising Yuan led to increasing numbers of factory closures throughout 2008 even before the financial crisis. Thus labour legislation is hardly the main contributor to rising costs. There have been a raft of labour related laws and regulations on social security payments, pensions, employment promotion etc which are all having an effect. And it is precisely those companies which have not previously paid the minimum wage or paid worker benefits that may well claim the new law was adding 40 percent to costs - the figure often quoted by corporate observers. If a company had been compliant in most areas of the law then the new law would have led to no more than a marginal rise in costs. Despite this Hong Kong firms and local political parties are lobbying for a partial suspension of the labour contract law. As of now the Chinese authorities have resisted this call but at a local level it appears that many companies are being told that authorities will turn a blind eye to many minor infractions of the labour laws.

It is estimated that several million workers may lose their jobs in the next few months as a result of a slow down in export orders stemming from the banking crisis in the west.  AS businesses fail, so far the local government has managed to pay unpaid wages but these handouts are obviously not viable for continued bankruptcies. Social unrest is likely to increase in the short to medium term.