Extra! Extra! Lesbian wives, killing strangers and floating TVs

Foreign companies get what's coming to them.

Corporations battle China on labor law
By David Barboza The New York Times

Published: October 12, 2006
SHANGHAI China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers through one of the most sweeping efforts at real unionization in the country's post-Communist era.

The move has triggered a battle with American corporations and other global companies that have mounted a sophisticated lobbying campaign.

The proposed law, which could go into effect as early as next May, is a reflection of the growing maturity of the Chinese economy, which for years now has experimented with free markets that encouraged millions of young workers to toil at cheap wages for companies that make cheap exports.

This new law, analysts and labor activists say, is a sign that the Chinese government is growing increasingly frustrated with reports about labor abuse and is seeking to give labor unions real clout.

But some of the world's biggest corporations have attacked the proposed rules, saying they revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany. American lawyers have also hinted that the rules - like one that makes it more difficult to lay off workers - are so onerous that some big corporations may stop building factories here.

The proposed law is being debated just months after Wal-Mart, the world's biggest retailer, was forced to accept unions in its Chinese stores. State-controlled unions here have not wielded much power in the past, but after years of reports of worker abuse, the government aims to give its union new powers to enforce the use of labor contracts, safety protections and worker ground rules.

Hoping to head off some of the rules, representatives of some of America's biggest companies are waging an intense lobbying campaign to convince the Chinese government to revise or abandon the proposed law. The skirmish has pitted the American Chamber of Commerce, which represents companies like Dell, Ford, General Electric, Microsoft and Nike, against labor activists, officials in the Chinese Labor Ministry and the All China Federation of Trade Unions, the Communist Party's official union.

Worker rights activists say the proposed labor rules are long overdue, and they have accused American corporations of favoring a system that has led to widespread labor abuses, such as hiring and firing workers on a moment's notice because they have no employment contracts.

Global Labor Strategies, a nonprofit group that assists social movements, was expected to release a report Thursday denouncing American corporations for opposing legislation that would give Chinese workers stronger labor rights.

The conflict is significant partly because it comes at a time when costs for labor, energy and land are rising across the board here in a sign that doing business in China is likely to get much more expensive in the coming years. Indeed, both China and multinational corporations are starting a delicate dance around the idea of who needs the other more: How much does China need foreign companies to help fuel its export machine, and how much do foreign corporations need to operate in China?

Several American corporations declined to comment on the case, referring calls to the American Chamber of Commerce in Shanghai.

But Andreas Lauffs, head of the China Employment Practice Group at the law firm Baker & McKenzie, said American companies consider the proposed rules too costly, restrictive and inflexible. Lauffs said the new law would give unions collective bargaining power and control over certain factory rules, and it would also make it difficult to dismiss employees for poor performance.

It is not clear what the final law will look like, but experts say the trend suggests new challenges ahead for foreign companies working in a country that is as perplexing as it is alluring.

Under China's socialist "iron rice bowl" system of the 1950s and 1960s, all workers were protected by the government or state-owned companies, which often supplied housing and local health coverage. But in the 1980s, China wanted market mechanisms to modernize its economy and rolled back many of those protections. While growth has been remarkable, there have been harsh side effects, such as massive layoffs, unemployment, huge income gaps and widespread labor abuse.

The worst off have been migrant workers, most of whom have left the poorest provinces and traveled far from home to live in cramped company dormitories while working long hours under poor or hazardous conditions.

"I don't know about the labor law," said Zhang Yin, an 18-year-old migrant who washes dishes in Shanghai. "I work 10 hours a day with a two-hour meal break for $80 a month. During the three months I've been here, my boss has delayed the salary payment twice. I want to quit."

But in recent years, some workers have begun to strike, which is illegal here, or protest against poor working conditions or withheld pay. And now, the Chinese government, which has grown increasingly concerned about the nation's widening income gap and the threats of social unrest, seems determined to improve worker protections, at least on paper.

"The government is concerned because social turmoil can happen at any moment," said Liu Cheng, a professor of law at Shanghai Normal University and a consultant who advised the government on drafting the proposed law.

Among other things, the proposed law would give unions a say in personnel matters, making it more difficult for companies to fire employees. It would also impose heavy fines on companies that do not comply with the law.

One provision in the proposed law reads: "Labor unions or employee representatives have the right, following bargaining conducted on an equal basis, to execute with employers collective contracts on such matters as labor compensation, working hours, rest, leave, work safety and hygiene, insurance, benefits, etc."

If approved and strictly enforced, experts said, the new laws would dramatically restructure the country's massive labor market and significantly push up the wages of everyday workers - which are already believed to be held down by lack of enforcement of the existing labor laws.

Until now, however, China's existing labor laws have largely gone unenforced, which has further complicated debate here.

Opponents of the proposed law argue that enforcing existing labor laws would be sufficient to solve the country's nagging labor woes. Advocates say additional protections are necessary, and new laws would empower workers and set the stage for stricter enforcement.

The dispute is simmering at a time when the Chinese economy is booming, fueled in large part by the growth of gigantic toy, textile and high-tech factories clustered along the country's eastern seaboard. And the success of the country's export boom may be one reason the government now feels emboldened to press foreign companies - which dominate the export trade - to do more for workers.

But corporations big and small, foreign and domestic, are lining up in opposition to the proposed law. The American Chamber of Commerce here, which has over 3,000 members, says defeating the proposed labor law is one of its top priorities this year.

And business groups from Japan, Hong Kong and Taiwan - all major investors in factories here - also say the new labor rules would hamper business. Some even say the laws already on the books are too favorable to employees.


SHANGHAI China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers through one of the most sweeping efforts at real unionization in the country's post-Communist era.

The move has triggered a battle with American corporations and other global companies that have mounted a sophisticated lobbying campaign.

The proposed law, which could go into effect as early as next May, is a reflection of the growing maturity of the Chinese economy, which for years now has experimented with free markets that encouraged millions of young workers to toil at cheap wages for companies that make cheap exports.

This new law, analysts and labor activists say, is a sign that the Chinese government is growing increasingly frustrated with reports about labor abuse and is seeking to give labor unions real clout.

But some of the world's biggest corporations have attacked the proposed rules, saying they revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany. American lawyers have also hinted that the rules - like one that makes it more difficult to lay off workers - are so onerous that some big corporations may stop building factories here.

The proposed law is being debated just months after Wal-Mart, the world's biggest retailer, was forced to accept unions in its Chinese stores. State-controlled unions here have not wielded much power in the past, but after years of reports of worker abuse, the government aims to give its union new powers to enforce the use of labor contracts, safety protections and worker ground rules.

Hoping to head off some of the rules, representatives of some of America's biggest companies are waging an intense lobbying campaign to convince the Chinese government to revise or abandon the proposed law. The skirmish has pitted the American Chamber of Commerce, which represents companies like Dell, Ford, General Electric, Microsoft and Nike, against labor activists, officials in the Chinese Labor Ministry and the All China Federation of Trade Unions, the Communist Party's official union.

Worker rights activists say the proposed labor rules are long overdue, and they have accused American corporations of favoring a system that has led to widespread labor abuses, such as hiring and firing workers on a moment's notice because they have no employment contracts.

Global Labor Strategies, a nonprofit group that assists social movements, was expected to release a report Thursday denouncing American corporations for opposing legislation that would give Chinese workers stronger labor rights.

The conflict is significant partly because it comes at a time when costs for labor, energy and land are rising across the board here in a sign that doing business in China is likely to get much more expensive in the coming years. Indeed, both China and multinational corporations are starting a delicate dance around the idea of who needs the other more: How much does China need foreign companies to help fuel its export machine, and how much do foreign corporations need to operate in China?

Several American corporations declined to comment on the case, referring calls to the American Chamber of Commerce in Shanghai.

But Andreas Lauffs, head of the China Employment Practice Group at the law firm Baker & McKenzie, said American companies consider the proposed rules too costly, restrictive and inflexible. Lauffs said the new law would give unions collective bargaining power and control over certain factory rules, and it would also make it difficult to dismiss employees for poor performance.

It is not clear what the final law will look like, but experts say the trend suggests new challenges ahead for foreign companies working in a country that is as perplexing as it is alluring.

Under China's socialist "iron rice bowl" system of the 1950s and 1960s, all workers were protected by the government or state-owned companies, which often supplied housing and local health coverage. But in the 1980s, China wanted market mechanisms to modernize its economy and rolled back many of those protections. While growth has been remarkable, there have been harsh side effects, such as massive layoffs, unemployment, huge income gaps and widespread labor abuse.

The worst off have been migrant workers, most of whom have left the poorest provinces and traveled far from home to live in cramped company dormitories while working long hours under poor or hazardous conditions.

"I don't know about the labor law," said Zhang Yin, an 18-year-old migrant who washes dishes in Shanghai. "I work 10 hours a day with a two-hour meal break for $80 a month. During the three months I've been here, my boss has delayed the salary payment twice. I want to quit."

But in recent years, some workers have begun to strike, which is illegal here, or protest against poor working conditions or withheld pay. And now, the Chinese government, which has grown increasingly concerned about the nation's widening income gap and the threats of social unrest, seems determined to improve worker protections, at least on paper.

"The government is concerned because social turmoil can happen at any moment," said Liu Cheng, a professor of law at Shanghai Normal University and a consultant who advised the government on drafting the proposed law.

Among other things, the proposed law would give unions a say in personnel matters, making it more difficult for companies to fire employees. It would also impose heavy fines on companies that do not comply with the law.

One provision in the proposed law reads: "Labor unions or employee representatives have the right, following bargaining conducted on an equal basis, to execute with employers collective contracts on such matters as labor compensation, working hours, rest, leave, work safety and hygiene, insurance, benefits, etc."

If approved and strictly enforced, experts said, the new laws would dramatically restructure the country's massive labor market and significantly push up the wages of everyday workers - which are already believed to be held down by lack of enforcement of the existing labor laws.

Until now, however, China's existing labor laws have largely gone unenforced, which has further complicated debate here.

Opponents of the proposed law argue that enforcing existing labor laws would be sufficient to solve the country's nagging labor woes. Advocates say additional protections are necessary, and new laws would empower workers and set the stage for stricter enforcement.

The dispute is simmering at a time when the Chinese economy is booming, fueled in large part by the growth of gigantic toy, textile and high-tech factories clustered along the country's eastern seaboard. And the success of the country's export boom may be one reason the government now feels emboldened to press foreign companies - which dominate the export trade - to do more for workers.

But corporations big and small, foreign and domestic, are lining up in opposition to the proposed law. The American Chamber of Commerce here, which has over 3,000 members, says defeating the proposed labor law is one of its top priorities this year.

And business groups from Japan, Hong Kong and Taiwan - all major investors in factories here - also say the new labor rules would hamper business. Some even say the laws already on the books are too favorable to employees.


SHANGHAI China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers through one of the most sweeping efforts at real unionization in the country's post-Communist era.

The move has triggered a battle with American corporations and other global companies that have mounted a sophisticated lobbying campaign.

The proposed law, which could go into effect as early as next May, is a reflection of the growing maturity of the Chinese economy, which for years now has experimented with free markets that encouraged millions of young workers to toil at cheap wages for companies that make cheap exports.

This new law, analysts and labor activists say, is a sign that the Chinese government is growing increasingly frustrated with reports about labor abuse and is seeking to give labor unions real clout.

But some of the world's biggest corporations have attacked the proposed rules, saying they revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany. American lawyers have also hinted that the rules - like one that makes it more difficult to lay off workers - are so onerous that some big corporations may stop building factories here.

The proposed law is being debated just months after Wal-Mart, the world's biggest retailer, was forced to accept unions in its Chinese stores. State-controlled unions here have not wielded much power in the past, but after years of reports of worker abuse, the government aims to give its union new powers to enforce the use of labor contracts, safety protections and worker ground rules.

Hoping to head off some of the rules, representatives of some of America's biggest companies are waging an intense lobbying campaign to convince the Chinese government to revise or abandon the proposed law. The skirmish has pitted the American Chamber of Commerce, which represents companies like Dell, Ford, General Electric, Microsoft and Nike, against labor activists, officials in the Chinese Labor Ministry and the All China Federation of Trade Unions, the Communist Party's official union.

Worker rights activists say the proposed labor rules are long overdue, and they have accused American corporations of favoring a system that has led to widespread labor abuses, such as hiring and firing workers on a moment's notice because they have no employment contracts.

Global Labor Strategies, a nonprofit group that assists social movements, was expected to release a report Thursday denouncing American corporations for opposing legislation that would give Chinese workers stronger labor rights.

The conflict is significant partly because it comes at a time when costs for labor, energy and land are rising across the board here in a sign that doing business in China is likely to get much more expensive in the coming years. Indeed, both China and multinational corporations are starting a delicate dance around the idea of who needs the other more: How much does China need foreign companies to help fuel its export machine, and how much do foreign corporations need to operate in China?

Several American corporations declined to comment on the case, referring calls to the American Chamber of Commerce in Shanghai.

But Andreas Lauffs, head of the China Employment Practice Group at the law firm Baker & McKenzie, said American companies consider the proposed rules too costly, restrictive and inflexible. Lauffs said the new law would give unions collective bargaining power and control over certain factory rules, and it would also make it difficult to dismiss employees for poor performance.

It is not clear what the final law will look like, but experts say the trend suggests new challenges ahead for foreign companies working in a country that is as perplexing as it is alluring.

Under China's socialist "iron rice bowl" system of the 1950s and 1960s, all workers were protected by the government or state-owned companies, which often supplied housing and local health coverage. But in the 1980s, China wanted market mechanisms to modernize its economy and rolled back many of those protections. While growth has been remarkable, there have been harsh side effects, such as massive layoffs, unemployment, huge income gaps and widespread labor abuse.

The worst off have been migrant workers, most of whom have left the poorest provinces and traveled far from home to live in cramped company dormitories while working long hours under poor or hazardous conditions.

"I don't know about the labor law," said Zhang Yin, an 18-year-old migrant who washes dishes in Shanghai. "I work 10 hours a day with a two-hour meal break for $80 a month. During the three months I've been here, my boss has delayed the salary payment twice. I want to quit."

But in recent years, some workers have begun to strike, which is illegal here, or protest against poor working conditions or withheld pay. And now, the Chinese government, which has grown increasingly concerned about the nation's widening income gap and the threats of social unrest, seems determined to improve worker protections, at least on paper.

"The government is concerned because social turmoil can happen at any moment," said Liu Cheng, a professor of law at Shanghai Normal University and a consultant who advised the government on drafting the proposed law.

Among other things, the proposed law would give unions a say in personnel matters, making it more difficult for companies to fire employees. It would also impose heavy fines on companies that do not comply with the law.

One provision in the proposed law reads: "Labor unions or employee representatives have the right, following bargaining conducted on an equal basis, to execute with employers collective contracts on such matters as labor compensation, working hours, rest, leave, work safety and hygiene, insurance, benefits, etc."

If approved and strictly enforced, experts said, the new laws would dramatically restructure the country's massive labor market and significantly push up the wages of everyday workers - which are already believed to be held down by lack of enforcement of the existing labor laws.

Until now, however, China's existing labor laws have largely gone unenforced, which has further complicated debate here.

Opponents of the proposed law argue that enforcing existing labor laws would be sufficient to solve the country's nagging labor woes. Advocates say additional protections are necessary, and new laws would empower workers and set the stage for stricter enforcement.

The dispute is simmering at a time when the Chinese economy is booming, fueled in large part by the growth of gigantic toy, textile and high-tech factories clustered along the country's eastern seaboard. And the success of the country's export boom may be one reason the government now feels emboldened to press foreign companies - which dominate the export trade - to do more for workers.

But corporations big and small, foreign and domestic, are lining up in opposition to the proposed law. The American Chamber of Commerce here, which has over 3,000 members, says defeating the proposed labor law is one of its top priorities this year.

And business groups from Japan, Hong Kong and Taiwan - all major investors in factories here - also say the new labor rules would hamper business. Some even say the laws already on the books are too favorable to employees.


SHANGHAI China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers through one of the most sweeping efforts at real unionization in the country's post-Communist era.

The move has triggered a battle with American corporations and other global companies that have mounted a sophisticated lobbying campaign.

The proposed law, which could go into effect as early as next May, is a reflection of the growing maturity of the Chinese economy, which for years now has experimented with free markets that encouraged millions of young workers to toil at cheap wages for companies that make cheap exports.

This new law, analysts and labor activists say, is a sign that the Chinese government is growing increasingly frustrated with reports about labor abuse and is seeking to give labor unions real clout.

But some of the world's biggest corporations have attacked the proposed rules, saying they revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany. American lawyers have also hinted that the rules - like one that makes it more difficult to lay off workers - are so onerous that some big corporations may stop building factories here.

The proposed law is being debated just months after Wal-Mart, the world's biggest retailer, was forced to accept unions in its Chinese stores. State-controlled unions here have not wielded much power in the past, but after years of reports of worker abuse, the government aims to give its union new powers to enforce the use of labor contracts, safety protections and worker ground rules.

Hoping to head off some of the rules, representatives of some of America's biggest companies are waging an intense lobbying campaign to convince the Chinese government to revise or abandon the proposed law. The skirmish has pitted the American Chamber of Commerce, which represents companies like Dell, Ford, General Electric, Microsoft and Nike, against labor activists, officials in the Chinese Labor Ministry and the All China Federation of Trade Unions, the Communist Party's official union.

Worker rights activists say the proposed labor rules are long overdue, and they have accused American corporations of favoring a system that has led to widespread labor abuses, such as hiring and firing workers on a moment's notice because they have no employment contracts.

Global Labor Strategies, a nonprofit group that assists social movements, was expected to release a report Thursday denouncing American corporations for opposing legislation that would give Chinese workers stronger labor rights.

The conflict is significant partly because it comes at a time when costs for labor, energy and land are rising across the board here in a sign that doing business in China is likely to get much more expensive in the coming years. Indeed, both China and multinational corporations are starting a delicate dance around the idea of who needs the other more: How much does China need foreign companies to help fuel its export machine, and how much do foreign corporations need to operate in China?

Several American corporations declined to comment on the case, referring calls to the American Chamber of Commerce in Shanghai.

But Andreas Lauffs, head of the China Employment Practice Group at the law firm Baker & McKenzie, said American companies consider the proposed rules too costly, restrictive and inflexible. Lauffs said the new law would give unions collective bargaining power and control over certain factory rules, and it would also make it difficult to dismiss employees for poor performance.

It is not clear what the final law will look like, but experts say the trend suggests new challenges ahead for foreign companies working in a country that is as perplexing as it is alluring.

Under China's socialist "iron rice bowl" system of the 1950s and 1960s, all workers were protected by the government or state-owned companies, which often supplied housing and local health coverage. But in the 1980s, China wanted market mechanisms to modernize its economy and rolled back many of those protections. While growth has been remarkable, there have been harsh side effects, such as massive layoffs, unemployment, huge income gaps and widespread labor abuse.

The worst off have been migrant workers, most of whom have left the poorest provinces and traveled far from home to live in cramped company dormitories while working long hours under poor or hazardous conditions.

"I don't know about the labor law," said Zhang Yin, an 18-year-old migrant who washes dishes in Shanghai. "I work 10 hours a day with a two-hour meal break for $80 a month. During the three months I've been here, my boss has delayed the salary payment twice. I want to quit."

But in recent years, some workers have begun to strike, which is illegal here, or protest against poor working conditions or withheld pay. And now, the Chinese government, which has grown increasingly concerned about the nation's widening income gap and the threats of social unrest, seems determined to improve worker protections, at least on paper.

"The government is concerned because social turmoil can happen at any moment," said Liu Cheng, a professor of law at Shanghai Normal University and a consultant who advised the government on drafting the proposed law.

Among other things, the proposed law would give unions a say in personnel matters, making it more difficult for companies to fire employees. It would also impose heavy fines on companies that do not comply with the law.

One provision in the proposed law reads: "Labor unions or employee representatives have the right, following bargaining conducted on an equal basis, to execute with employers collective contracts on such matters as labor compensation, working hours, rest, leave, work safety and hygiene, insurance, benefits, etc."

If approved and strictly enforced, experts said, the new laws would dramatically restructure the country's massive labor market and significantly push up the wages of everyday workers - which are already believed to be held down by lack of enforcement of the existing labor laws.

Until now, however, China's existing labor laws have largely gone unenforced, which has further complicated debate here.

Opponents of the proposed law argue that enforcing existing labor laws would be sufficient to solve the country's nagging labor woes. Advocates say additional protections are necessary, and new laws would empower workers and set the stage for stricter enforcement.

The dispute is simmering at a time when the Chinese economy is booming, fueled in large part by the growth of gigantic toy, textile and high-tech factories clustered along the country's eastern seaboard. And the success of the country's export boom may be one reason the government now feels emboldened to press foreign companies - which dominate the export trade - to do more for workers.

But corporations big and small, foreign and domestic, are lining up in opposition to the proposed law. The American Chamber of Commerce here, which has over 3,000 members, says defeating the proposed labor law is one of its top priorities this year.

And business groups from Japan, Hong Kong and Taiwan - all major investors in factories here - also say the new labor rules would hamper business. Some even say the laws already on the books are too favorable to employees.