Skepticism of Bannon declaring an "economic war" with China

Fresh off steering strategy for a presidential campaign and White House which has damaged institutions and democratic norms in the United States, Steve Bannon flew to Hong Kong in the second week of September to deliver a speech to investors at an event hosted by a Citic subsidiary. He was greeted by protesters outside the venue decrying the toxic politics Bannon is famous for nurturing. 

In line with his nationalist rhetoric, Bannon declared an "economic war" between China and the U.S. during his speech. At ChinaFile, a number of experts discussed the merits of this sort of label for the relationship between the two countries. My small contribution to the conversation is copied below. The entire discussion can be read here.

I question the motives of the messenger. The discussion above, to the credit of its participants, has revolved so far around the merits of using “economic war” as a concept in the discourse of U.S.-China relations and the extents to which China is competing on a fair playing field. But we should be wary of Bannon, a regressive political figure and “alt-right” enabler who craves conflict within the U.S. and apparently war with China, of dishing up a conversation on the policy nuances toward China. Somewhat like the race-based theories of social organization to which his Breitbart faithful adhere, Bannon seems to selectively use bits and pieces of acknowledged fact to advertise a normative argument for deeper conflict, in this case with China.

Many people within the policy and political science community have engaged for years in discussion of the U.S. trade stance toward China and its bucking of international norms and standards. This conversation should continue, inclusive of those across the policy spectrum. But we ought to remain circumspect toward those who may not be engaging in good faith, who do not intend to maintain a just and peaceful world or resort to conflict as a last resort, those who undermine democracy with ethnocentric populism and envision a world divided along such lines. Bannon’s Hong Kong speech is an effort to stay relevant after leaving the chaos he helped mold in the White House.

Government Steps Up To Labor’s Demands: Importance of Yue Yuen Shoe Factory Strike

Photo provided to China Labor Watch by Yue Yuen worker.

This essay was originally published at ChinaFile.

On April 14, most of the 40,000 workers at the Dongguan Yue Yuen shoe factory—supplier to Nike, Adidas, and other international brands—began what would become a two-week work stoppage. While there are thousands of strikes in China every year, the Yue Yuen action broke the mold by attracting an unprecedented show of government support for worker demands.

CBC (The Current) interview on Yue Yuen strike

On Monday April 28, I went to CBC's studio in Midtown Manahattan to chat with The Current's Anna Maria Tremonti about the progress of the hitoric Yue Yuen strike. The entire segment on the story can be listened to hear: http://www.cbc.ca/thecurrent/popupaudio.html?clipIds=2452825479

NBC News interview on progressing Yue Yuen Strike

As it entered the 40,000-strong Yue Yuen shoe factory strike entered its second week, NBC New's Alastair Jamieson interviewed me on some aspects of the protest. The full article is below.

Worsening China Factory Strike Threatens Adidas, Nike Sneakers
By Alastair Jamieson and Eric Baculinao

BEIJING - A wage dispute at a huge sneaker factory that supplies brands including Adidas and Nike escalated Wednesday, highlighting the growing problems faced by China’s manufacturing powerhouse. 

Workers at the plant – owned by the world's largest maker of sneakers, Yue Yuen – earn as little as $1.67 an hour making shoes that can sell for up to 100 times as much in the United States. 

Tens of thousands of employees have been off work for a second week, forcing Adidas to switch production to some of its other suppliers. At least one organizer was arrested by police and has not been seen for 24 hours, activists told NBC News Wednesday after a settlement offer was rejected. 

At the core of the dispute is the issue of historic underpayments for social security and housing fund contributions, but the issue goes far beyond the shoe plant. 

Workers throughout China are demanding not just higher wages but better social insurance as they face the prospect of supporting a rapidly aging population.

“The fact that something as nuanced as social insurance has led to a strike shows just how much things are changing,” said Kevin Slaten of U.S.-based non-profit China Labor Watch. “This generation of workers is a lot more aware of its rights and this problem is not unique to this factory.” 

Interview on BBC World News about massive Chinese shoe factory strike

On April 15, 2014, a day after a Dongguan shoe factory strike began that would continue ont April 28 and involve about 40,000 worker, BBC World News interviewed me about the event.

Apple responds to campaign, but falls short of progress

This post (with the exception of date changes) first appeared in the blog of Green America.

Co-authored by Kevin Slaten, China Labor Watch, and Elizabeth O’Connell, Green America 
 
On March 12 in partnership with Students and Scholars Against Corporate Misbehaviour and the activism arm of the Nation, Green America and China Labor Watch launched a petition to Apple to improve worker health and safety in the factories that make Apple products.

Apple was quick to respond to our campaign, in a statement shared with Computer World, however, their statement falls far short of meeting the demands of the campaign.  

Quoted in E-Commerce Times on IBM factory strike of 1,000 workers

IBM is selling its low-end server business to Lenevo, and this includes the sale of an electronics factory in Guangdong Province. But during the process, the factory did not offer economic compensation to its workers as required by law. Over 1,000 workers from the plant went on striek to protest this and other issues, like working hours. A reporter from E-Commerce Times contacted me to talk more about the legal background and labor context. Please see the article here.

Protest and interview on the streets of Paris

I had the fortune to be a part of the dramatic protest/media campaign on the streets of Paris against the abuse of Mattel workers in China. This protest was carried out with the leadership of Peuples Solidaires, a dynamic French rights advocacy group. I cannot remember the exact location in Paris, but there were about two to three dozen reporters present, including the AP. Below is the footage and interview shot by GNC News Network.

Social Instability in the Middle Kingdom

In China, labor unrest has reached levels unwitnessed in the past decade, and even state-run news publications are forecasting a very difficult 2009.

This is all much different than the early predictions last Autumn that China's economy was "decoupled" from the global crisis -- China was thought to escape relatively unscathed. Even I thought as much up until October, when the unemployment numbers really took a turn for the worse in the export hubs of the coastal cities. In December, the IMF and various economists predicted 5% growth for China's GDP in 2009. 

An article written today by Chinese observer John Pomfret asks an important question, "Is the worsening economic climate in China going to have severe social consequences?" The stories of massive worker layoffs have piled up. In dire economic circumstances, there is always a possibility that a tipping point could be reached and the employment could overwhelm a government's ability to handle it. 

But Pomfret tries to extend this issue further, arguing that China's stability is at risk because of its centralized political system:

"The prevailing narrative about China in the United States is that the Communist Party is secure in power and that while the economic downturn will cause trouble, the party will probably muddle through... [However,] China is not the United States and... its political system is inherently unstable."

Pomfret is claiming that the protests are really about Chinese people's dissatisfaction with their political system. He is wrong. 

The unrest is comprised of thousands of people outside of their (shutdown) factories and places of employment demanding backpay or protesting their termination without fair warning. The same thing would happen in the US if employers began laying off workers without pay or warning. (In fact, this did happen on a smaller scale in Chicago in November.) The political system is irrelevant in the minds of these protesters. They have little or no money and do not know where they will go next -- wouldn't you feel wronged as well?

So is Chinese unrest about political freedoms? No. (It's the economy, stupid.) 

However, this does not alter the reality that China's social stability may still be at risk. Not because it is a one-party state but because it has hundreds of millions of workers. Every labor problem that other nations (save India) must deal with during this global recession is magnified in China. The US has "massive layoffs" of 30,000 workers; China closed up to 60,000 factories in 2008 alone. The magnitude of unrest -- along with most everything else -- is far greater in China.

So what should the Chinese Communist Party (CCP) do? They've announced and began implementing a $586 billion stimulus package. Unfortunately, the labor unrest is rooted in something that cannot be fixed in the short-term with an injection of money: a massive export sector. To be sure, China's growth is primarily led by domestic spending, not exports. But between 20-30% of China's GDP is still coming from its export sector. That is a significant portion of the economy still sensitive to the ebb and flow of the global markets. Hence, a global recession begets massive unemployment.

The real solution to avoiding labor unrest lies in a Chinese economy composed of workers insusceptible to export shifts. In the long-term, the CCP is aiming toward an economy driven by more domestic consumption. Its next five-year plan is focused on tapping into the productive and consumptive powers of the 800 million poor, rural Chinese. They envision a gigantic middle class fueling the next century of China's economic rise. 

But such a great transition in economic structure is a slow process (even in China's lightspeed terms) -- at least another decade. In the meantime, China is going to be susceptible to social unrest via its labor force. If only they can weather the current crisis...