HONG KONG – A raft of new labor regulations that would grant collective bargaining rights to Chinese workers in Shenzhen is worrying Japan-affiliated companies in the special economic zone.
The rules, which could trigger demand for massive wage increases of more than 70 percent, have prompted the Guangzhou office of the Japan External Trade Organization, which is dedicated to promoting trade, to file a petition with local authorities to reconsider the plan.
The booming industrial city adjacent to Hong Kong has seen a string of strikes held at various companies since May as workers sound the call for higher wages.
The new labor rules are apparently aimed at avoiding further unrest in the city, which is populated with factory workers, many from outside Guangdong Province.
According to the draft, factory workers would have the right to seek collective bargaining with management if the wages of the majority of workers are less than half the average pay level in the city.
The rule would become a powerful legal weapon for low-paid factory workers.
According to Shenzhen government data, the average monthly salary for factory workers in the city is about 3,900 yuan, or $560.
Monthly pay at small Japan-affiliated businesses, most of which are in manufacturing, ranges from 1,100 yuan to 1,500 yuan.
This means that workers at the Japanese-affiliated companies can demand hikes of more than 70 percent just to bring their compensation level up to half of the average wage.
The new rules would also allow Shenzhen factory workers to demand collective bargaining with management as often as needed.
Behind the move is a new state economic policy aimed at lessening the role that exports play in the national economy by boosting domestic demand through greater consumer spending power.
As part of this turnaround, many municipalities have raised the minimum wage.
“If you (a foreign enterprise) cannot afford higher wages, then get out (of China),” one Guangdong provincial official said.
“It would be a big blow for us if the labor rules are enforced without change. People may have to think hard whether to pull out,” said the manager of a Japanese-affiliated electronics factory in Shenzhen.
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