Posts tagged ‘Shenzhen’

19/05/2013

* Factory women: Girl power

The Economist: “SITTING around a restaurant table, six workers discuss the progress of their labour action. Five of them are women, as are most of their several hundred colleagues who have been occupying the toy factory since mid-April. They have been sleeping on floors, braving rats and mosquitoes, to stop the owner shutting down the factory without giving them fair compensation. Those at the table are all migrants from the countryside. A couple are tearful. All are angry and determined not to give way.

In Guangdong province, where nearly 30% of China’s exports are made, women usually far outnumber men on labour-intensive production lines such as those at the toy factory in the city of Shenzhen, next to Hong Kong. Rural women are hired for their supposed docility, nimble fingers and attention to mind-numbing detail.

 

But in recent years Guangdong’s workforce has changed. The supply of cheap unskilled labour, once seemingly limitless, has started to dry up. Factory bosses are now all but begging their female workers to remain. At the same time the women who have migrated to the factory towns have become better-educated and more aware of their rights. In labour-intensive factories, stereotypes of female passivity are beginning to break down.

Over the past three decades the migration of tens of millions of women from the countryside to factories in Guangdong and other coastal provinces has helped to transform the worldview of an especially downtrodden sector of Chinese society (the suicide rate among rural women is far higher than for rural men). Conditions in the factories have often been harsh—poor safety, illegally long working hours, cramped accommodation, few breaks and little leave—but for many it has also been liberating and empowering, both personally and financially. Leslie Chang, an American journalist, spent three years reporting on women workers in Dongguan, a city near Shenzhen. In her 2008 book “Factory Girls” Ms Chang wrote that, compared with men, the women she encountered were “more motivated to improve themselves and more likely to value migration for its life-changing possibilities.”

They are still not as well-educated as men (about a year less in school on average, with most having only primary- or junior secondary-school education). But the gap has been narrowing.

Crucially, China’s changing demography has been shifting in their favour. Labour shortages that began to hit low-skilled manufacturing in the second half of the past decade have driven up wages and forced factories to improve working conditions. Once all but unthinkable (for both sexes), strikes have become increasingly common. Anecdotally at least, women appear as likely to take part as men.

Strikes in 2010 affecting factories in Guangdong owned by Honda, a Japanese car firm, helped to galvanise labour activism. One of them occurred in the city of Zhongshan, where the workers were mostly female. The unrest there resulted in pay concessions and set a precedent for collective bargaining led by representatives chosen by the workers themselves, rather than government-controlled trade unions. At the Shenzhen toy factory, the workers have chosen five representatives to negotiate with management. Three of them are women. A male worker says the women are more aware of their rights.

China Labour Bulletin, a Hong Kong-based NGO, reported on March 19th that about a fifth of strikes in Guangdong since the beginning of the year had been in factories and other workplaces with largely female staff. It said that women were also “some of the most active workers posting information online about strikes and protests, and in seeking out legal assistance for problems at work.” The protesting toy-workers offer evidence of this. They have posted photographs on microblogs of protesting female workers clad in red jackets opposite lines of police. One of their slogans reads: “Bad boss—give us back our youth”.”

via Factory women: Girl power | The Economist.

01/05/2013

* China Manufacturers Survive by Moving to Asian Neighbors

WSJ: First in a Series: China’s Changing Work Force

“In a corner of a sprawling factory in this coastal southern city, sewing machines that stitched blouses and shirts for Lever Style Inc.’s clients now gather dust. As the din on the factory floor has dropped, so, too, has the payroll. Over the past two years, Lever Style’s employee count in China has declined by one-third to 5,000 workers.

The company in April began moving apparel production for Japanese retail chain Uniqlo to Vietnam, where wages can be half those in China. Lever Style also is testing a shift to India for U.S. department-store chain Nordstrom Inc. JWN -0.34% and moving production for other customers.

It’s a matter of survival. After a decade of nearly 20% annual wage increases in China, Lever Style says it can no longer make money here.

image

A board shows workers’ statuses at each production line at Lever Style’s factory in Shenzhen, China.

“Operating in Southern China is a break-even proposition at best,” says Stanley Szeto, a former investment banker who took over the family business from his father in 2000.

Companies from leather-goods chain Coach Inc. COH -0.53% to clogs maker Crocs Inc. CROX -0.94% also are shifting some manufacturing to other countries as the onetime factory to the world becomes less competitive because of sharply rising wages and a persistent labor shortage. The moves allow the companies to keep consumer prices in check, although competition for labor in places such as Vietnam and Cambodia is pushing up wages in those countries as well.

At Crocs, 65% of its colorful shoes are expected to be made in China this year through third-party manufacturers, down from 80% last year. Coach will reduce its overall production in China to about 50% by 2015 from more than 80% in 2011 so the handbag maker isn’t too reliant on one country, a spokeswoman says.

Some migration of apparel manufacturing from China is expected, and even encouraged by the government, as the country’s economy matures. As other Asian nations become efficient at mass manufacturing, China must embrace research and high-technology production to transform its economy as South Korea and Japan once did. But healthy economic growth requires that China expand its service sector and create higher-skilled manufacturing jobs at a rapid clip to compensate.

“If costs continue to rise, but China is unable to become more innovative or develop home-grown technologies, then the jobs that move offshore won’t be replaced by anything,” says Andrew Polk, a Beijing-based economist for the Conference Board, a research group for big American and European companies.

China continues to be the developing world’s largest recipient of foreign direct investment, attracting $112 billion last year. But that was down 3.7% from a year earlier. And exports still are rising in the double-digit percentages. Growth is slowing.”

via China Manufacturers Survive by Moving to Asian Neighbors – WSJ.com.

01/03/2013

* Hurun rich list stirs Chinese zodiac discussion

English: The carvings with Chinese Zodiac on t...

English: The carvings with Chinese Zodiac on the ceiling of the gate to Kushida Shrine in Fukuoka ) (Photo credit: Wikipedia)

SCMP: “The publication of the Hurun Global Rich List 2013, which revealed the top 10 wealthiest Chinese billionaires, on Thursday has triggered discussion among Chinese netizens about the Chinese zodiac signs of the rich.

 

The dragon is the most common zodiac sign among the billionaires, followed by the horse, said a post by China’s Global Times.

Commenting on the list of billionaires, one netizen wrote, “Chinese officials must be laughing at this so-called ‘rich list’.”

Others chimed in with comments on Chinese zodiac signs. “Dragons are born with a kind of self-confidence. They are destined to play a strong role,” one said.

Another claimed, “I will give birth to a ‘dragon baby’ and a ‘horse baby’!”

A third wrote, “Global Times, mind your own business.”

The report, compiled by the Shanghai-based Hurun Research Institute, showed that Hong Kong entrepreneurs make up the majority of the list, followed by those from Beijing, Shanghai and Shenzhen.

The top industry sector favoured by the Chinese billionaires on the list is real estate, followed by manufacturing, finance and investment, and information technology.”

via Hurun rich list stirs Chinese zodiac discussion | South China Morning Post.

20/12/2012

* Foxconn Workers Say, ‘Keep Our Overtime’

An unintended consequence of enforcing ‘fair’ worker treatment – reduced income for migrant workers more than willing to work excessive overtime!

WSJ: “Nets to catch would-be jumpers still sag ominously from Hon Hai Precision Industry Co.’s  buildings.

But two years after a spate of suicides at the Apple Inc.  supplier’s campus here, workers are more concerned about another measure designed to protect them: limits on overtime.

Hon Hai in March said it would change its workplace practices after an audit by a U.S.-based nonprofit worker-safety group found widespread breaches of Chinese law and Apple policies at three plants, including the excessive use of overtime. Hon Hai responded by pledging that it would bring its overtime policies into alignment with Chinese law by next year, allowing workers to work no more than nine hours of overtime a week. The Taiwan-based company, also known as Foxconn, pledged to improve health and safety conditions at its campuses across China as well.

But more than 15 workers on the Shenzhen campus said in interviews that they work more than the legal limit of nine overtime hours a week. A majority said they work 10 to 15 overtime hours and would prefer more, having left their distant homes to make money in this southern Chinese boomtown on the border of Hong Kong.

“I think a lot of the more experienced people from the technology production lines will leave” if the policy to limit overtime goes into effect, said a worker who asked to be identified only by his surname, Ma. “We don’t know how much our salary will go up. But after being here three years, I don’t have much incentive to stay, since my wage probably won’t rise much.”

Mr. Ma, who earned roughly 3,400 yuan ($540) a month including overtime when he arrived three years ago, said he now earns about 5,000 yuan. To make extra money, the 26-year-old buys used car parts cheaply on an e-commerce website and then resells them.

Basic pay at the Shenzhen Longhua plant is 2,200 yuan, before overtime.

Keeping Mr. Ma and its 1.5 million other Chinese workers satisfied, while manufacturing complex, time-sensitive consumer electronics profitably is becoming more challenging for Hon Hai. The company’s labor costs will rise by roughly $1.4 billion when the new labor policies roll out next year, according to a Bernstein Research estimate. Hon Hai’s operating profit margin had declined since the second quarter of 2010 because of rising wages. The figure rose to 3.4% in this year’s third quarter from 2.2% a year earlier as the company raised what it charged customers, analysts said.

Hon Hai isn’t alone in facing such challenges. Employee protests over working conditions and the willingness of staff to change employer for more pay have forced electronics manufacturers to raise wages throughout China. Hon Hai and other companies have moved some operations to countries such as Vietnam and Mexico, where costs for labor or transportation to end markets are lower.”

via Foxconn Workers Say, ‘Keep Our Overtime’ – WSJ.com.

29/09/2012

* All that glitters is sold

China Daily: “With the rapid development of China’s economy, Chinese consumers’ appetite for jewellery has continued to grow, resulting in consistent sales growth in the domestic market.

All that glitters is sold

In 2011, spending in China’s retail jewellery market reached 40 billion yuan ($6.3 billion), making it the world’s largest consumer market for platinum and jade, and the second-largest diamond jewellery consumer after the US. But in addition to being one of the world’s largest jewellery consumers, China has gradually emerged as a competitive jewellery maker in the international market.

In fewer than 20 years, China’s jewellery industry has grown rapidly, and Shenzhen, a booming city in South China’s Guangdong province, has played a crucial role in leading this industry.

Thanks to the influence of Hong Kong’s industry, the past two decades have seen Shenzhen evolve into China’s jewellery capital. Since the 1990s, the city has been acknowledged as China’s biggest jewellery manufacturing base and trade distribution center.

According to the Gems and Jewellery Trade Association of Shenzhen, more than 2,000 jewellery companies now call the city home, and their annual output value of more than 50 billion yuan accounts for more than 70 percent of China’s overall jewellery production. In fact, the sales revenue of Shenzhen’s jewellery enterprises is not just ranked first in terms of domestic market share, it makes up about one-third of China’s total.

But jewellers in Shenzhen are no longer content to remain the largest outsourcing base for brands from Hong Kong or other parts of the world. They are trying to reshape old business models by investing heavily in branding their own independently designed products, aspiring to upgrade Shenzhen from an international hub of original equipment manufacturers to the birthplace of famous jewellery brands.

Some jewellers in Shenzhen have taken the lead in brand-building campaign. One of the most successful is Chow Tai Seng Jewelry Co Ltd, a large jewellery producer based in the city.

Established in 1966, Chow Tai Seng Jewelry is now one of the largest diamond-jewellery retailers and wholesalers in China. It currently has the largest jewellery chain in the country, with more than 2,000 shops in more than 300 Chinese cities.

The company posted sales revenue of 13 billion yuan (US$2 billion) in 2011, accounting for 7.1 percent of the market. Zhou Zongwen, board chairman of Chow Tai Seng Jewelry, said sales this year are expected to increase by about 30 percent over the previous year, and the company will maintain this robust growth momentum in the next few years.”

via All that glitters is sold |Economy |chinadaily.com.cn.

See also:

07/08/2012

* In China’s Power Nexus, a Tale of Redemption

WSJ: “Liu Minghui’s battle to clear his name and save his business, a fight that pitted him against some of the most powerful forces in China, began the day of his company’s Christmas party in 2010.China Gas

Mr. Liu was set to leave his 18th-floor office in Shenzhen to cross the nearby border to Hong Kong for the party when plainclothes Public Security Bureau officers arrested him on suspicion of stealing money from the company he ran and co-founded, China Gas Holdings Ltd.

The former managing director spent nearly the next year in a Chinese jail, during which time he was forced to leave his executive and board roles at the company while remaining a substantial shareholder. He emerged from detention in time to see one of the country’s biggest companies launch a hostile offer for China Gas, the first by a state-owned business against a privately controlled company.

Now Mr. Liu’s comeback is nearly complete. He has been exonerated in the embezzlement case and is poised to win his fight with state-owned energy giant China Petroleum & Chemical Corp., or Sinopec, and its partner, ENN Energy Holdings Ltd. The bidding consortium on Monday extended the deadline for the US$2.15 billion offer until early September, saying the bid is still waiting regulatory approval. But with the stock trading at a 22% premium to the offer price of 3.50 Hong Kong dollars a share, the group seems unlikely to attract the shareholder support needed to take control.

The case highlights the harsh nature of business in China, where the legal system is opaque and the fate of companies can be decided in Beijing. It remains unclear why Mr. Liu was arrested and then cleared, why Sinopec bid for his company and why a surprising group of white knights came to Mr. Liu’s rescue.”

via In China’s Power Nexus, a Tale of Redemption; Sinpec, China Gas, Liu Menghui – WSJ.com.

In the same issue of WSJ.com, this article shows the positive (though still opaque) side of Chinese criminal justice and another the opposite: https://chindia-alert.org/2012/08/07/chinese-criminal-procedure-at-its-worst/

19/05/2012

* Hitching his Starwood to China

China Daily: “CEO of one of world’s biggest five-star chains says future is written in Chinese.

When Frits van Paasschen first visited China as a backpacker, staying in basic accommodation and traveling on crowded buses and trains, little did he imagine that two decades later, he would be returning as the boss of a five-star hotel chain. The senior executive retains vivid memories of those days, traveling the length and breadth of the country and leaving via the Karakoram Highway from China to Pakistan, clinging precariously to the roof of a pick-up truck.

Nowadays, van Paasschen flies business class on regular visits to China from his New York head office – and stays in the luxury properties of the St Regis, Westin, Sheraton and Le Mridien hotels that make up the Starwood portfolio.Van Paasschen is president and CEO of Starwood, one of the largest hotel management groups in the world which is adding to its China portfolio at a phenomenal rate: this year alone will see 23 new properties open – roughly one every fortnight – bringing the total to 100.

The country is considered to be so important that last year the boss flew the entire senior management team to China for a months visit; executive meetings were held wherever they happened to be on their grand China tour. “If a picture is worth a thousand words, then a visit is worth ten thousand,” says van Paasschen.  …

“Literally one of the high points was being on the top floor of what will be the St Regis in Shenzhen on the 100th floor of that building, looking out and toward Hong Kong and seeing that the Shenzhen side looks snazzier and more well developed than the New Territories of Hong Kong.

“When I am asked about the future I say I can’t read it, it is written in Chinese!  …

via Hitching his Starwood to China|Last Word|chinadaily.com.cn.

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