China Labor: Yes, The Times They Are A Changing but no, the sky is NOT falling.
There was some balanced perspective on the China labor situation from a July 1 Reuters article.
Just wanted to share some of the main points:
- Yes, the fact that there were strikes is significant. But no, the actual effect of those strikes has not been significant because of their limited scope. (It is, however, important to get at the underlying reasons for those strikes.)
- Yes, workers are becoming more demanding and more vocal.
- [My favorite] Yes labor costs are rising but no, this is not the end of China as a production base. This is because rising labor (and other) costs are not a new phenomenon, and because labor costs constitute a fraction of overall manufacturing costs in China. Some manufacturers may move inland or out of China, but…
“China is still an attractive option for most companies looking for an effective manufacturing base, although many companies have been pursuing a China plus one or a China plus two strategy in recent years to diversify their manufacturing operations,” said Geoffrey Crothall of the China Labour Bulletin in Hong Kong, which advocates for improved workers’ rights.
“I really don’t think we’re going to see companies suddenly leaving China en masse.”
- Yes, in some cases supply chains may be impacted, but no, it doesn’t look like a significant issue with regards to stocking strategies.
- Yes, the Chinese government will likely to play a greater role (by more stringent enforcement of labor laws, and by encouraging collective bargaining) in balancing the needs of a more assertive workerforce with those of industry. But no, it will not allow independent labor unions.