China's Silent Army
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18. China invested $400 million in Zambia’s mining sector in 2009, at the height of the global crisis. According to the Chinese vice minister of commerce, Li Jinzao, cumulative investment flows from China to Zambia reached $5.6 billion in early 2012. Bilateral trade reached $3.4 billion in 2011.
19. China’s most vocal critic on the continent, Zambia’s President Michael Sata, met with the Chinese ambassador in Lusaka in his first official appointment after winning the presidency. He made the point that Chinese companies are still welcome in the country, but insisted that they have to obey national laws. A few months into his presidency, Sata now seems to have toned down his criticism and a bilateral agreement was signed in March 2012 in which China guaranteed further grants, technical co-operation and investments.
20. See Chapter 3 for a description of the equally insecure working conditions experienced by local workers in Chinese mines in Peru and Burma.
21. In November 2011, Human Rights Watch’s report “You’ll Be Fired If You Refuse: Labor Abuses in Zambia’s Chinese State-Owned Copper Mines” detailed the persistent abuses in Chinese-run mines in Zambia, including poor health and safety conditions. This report is in line with what the authors witnessed on their field research in Zambia.
22. Chinese Investments in Africa: A Labor Perspective, op. cit.
23. China, the world’s second largest economy with hopes of overtaking the United States by 2020, is still setting a third-world minimum wage through its local governments: around 1,400 yuan (160 euros) in towns and cities and 900 yuan (100 euros) in rural areas, as of 2013. Since the beginning of the process of “opening and reform,” Beijing has been reluctant to improve working conditions among its working classes, conscious that low costs are the key to the success and longevity of the “factory of the world.” For example, the first central government regulation on minimum wages wasn’t issued until 2003. However, since 2009–10 the Chinese government seems to have decided to change a model which is unsustainable in the long term as a result of the enormous inequalities that it generates. This has led the government to tighten its employment legislation, enforce a greater observance of these commitments, and to significantly increase the minimum wage in the hope of putting an end to this inequality, at least in the towns to the east of the country where social unrest is more likely to happen. In 2012 about fifteen provinces increased their minimum wage, most noticeably in Shenzhen, where the minimum wage is now 1,500 yuan per month, and Shanghai, where it is 1,450 yuan. The authorities are also experimenting with collective wage negotiations between the Communist Party’s trade union and employers as a means of boosting wages. The Chinese government hopes that these measures will also promote the creation of a middle class, allowing China to move towards an economic model based on consumption.
24. To explain their whole story from beginning to end, the four workers arrived in Beijing by train in May 2010, at the authors’ own request and expense. They brought with them various types of documents that backed up their version of events (contracts, pay slips, tables indicating future payments, plane tickets, visas, etc.). The authors intervened in their case in order to make sure that they would have access to legal representation at their upcoming trial.
25. The documents which the men brought with them to Beijing reflected the complexity of the salary-paying system for migrant workers. The salary is paid in various installments and to various recipients (employees on the one hand, and their families on the other), in a labyrinthine system aimed at preventing the workers from spending all their money and depriving their family of support, and also ensuring that the worker will not abandon his commitment to the company before the end of his contract. While this system is technically legal, in practice it denies the worker the right to resign. Although this practice is not unique to China, the severe application of these contracts by the Chinese has no equal in our day and age. Some companies go even further: they take away the workers’ passports to prevent them from renouncing their salaries and leaving the project, effectively making them hostages of the company. Sources: “Hired on Sufferance: China’s Migrant Workers in Singapore,” Aris Chan, China Labor Bulletin, February 2011, and interviews with Zhang Zhiqiang, a Chinese lawyer and expert in migrant labor issues.
26. When the authors contacted him by telephone, Lei Youbin denied all the accusations and refused to give any convincing explanation for them, before abruptly hanging up.
27. At least a dozen Chinese workers have resigned as a result of precarious working conditions and mistreatment at the hands of Aolong’s bosses, who are still using violence and threats to keep their workers in line. The last incident of this kind occurred on the eve of the Chinese New Year of the Rabbit in February 2011, when employers beat a worker after he complained about working conditions at the camp. The ineffectiveness of the Gabonese legal system and the half-heartedness of the Chinese legal system—which is demonstrated by the sentence in this case, which only required the company to pay the workers’ salaries without any other compensation—have allowed Aolong to continue imposing its own law in Africa. These primitive labor conditions have also affected Gabonese workers hired by CCCC, who in April 2012 threatened to go on strike to denounce unfair deductions from their payments. Source: “Les employés de Construction Company ltd menacent de rentrer en grève,” Gaboneco, April 14, 2012.
28. In the absence of any official figures, various estimates place the number of Chinese workers in Angola at between 70,000 and 300,000.
29. Sources: “Hired on Sufferance: China’s Migrant Workers in Singapore,” op. cit., and the authors’ own interview with China Labor Bulletin in Hong Kong.
30. The authors were able to gain access to the model contract used by the Meilian agency, which includes clauses such as one specifying that the cost of food in the canteen will be shared on a fifty-fifty basis between employer and employee, and another specifying that the employer has the right to deduct the worker’s salary for work-related errors or for damages to material. The contract also anticipates fines of between 5,000 and 10,000 yuan for certain types of behavior or the failure to comply with certain work-related aspects of the role. Furthermore, the contract authorizes the employers to terminate the agreement if the employee “causes trouble or takes part in strikes,” or if he “disobeys the bosses … or carries out inadequate work causing a loss to the company,” among other reasons. Translated from the original Chinese document.
31. This leading NGO based in Hong Kong has spent years following and denouncing labor abuses committed in China. For more information, see http://www.china-labor.org.hk/en/.
32. Since the collapse of Maoism, the mantra of the Chinese regime has been “economic growth and political stability.” Unemployment is therefore one of the government’s obsessions, and it will spare no effort to reduce it and thereby avoid unrest that could endanger the Communist Party’s hegemony in terms of national power. As well as Beijing’s initiatives to encourage employment at all costs, such as the $586 billion fiscal stimulus package approved in 2008 to help combat the financial crisis, local government representatives are given free rein to adopt policies on a local level. For example, the Qingzhou county government in the province of Shandong, one of the focal points of the labor export industry, has promoted emigration to “earn foreign money” and fight unemployment. A study carried out by Chinese experts reflected the urgency of the situation in the area, where 700,000 rural workers had to share a stretch of arable land barely 62,800 hectares in size. To help combat this problem, the local government created a labor export company that has already sent over 50,000 workers to other provinces and to countries such as Russia, Japan and South Korea.
33. Lei Lin of the Meilian agency partly attributes this excess of laborers to the impact of the Three Gorges Dam, which has caused the relocation of 1.5 million workers to date. The dam has led to the creation of large numbers of displaced people, who have not only lost their homes but have also had to abandon their
traditional livelihoods. The local government has carried out various initiatives to prevent the potential build-up of tension as a result of the poverty this has caused. For example, between 1999 and 2009 the local government promoted the exportation of labor to other countries by offering fiscal discounts and improved credit access to companies prepared to send at least 100 workers abroad. Source: “” [The Preferential Policy on Encouraging Labor Co-operation in Chongqing], provided by the government of Chongqing in 1999, and available at http://www.pccqpc.com.cn/office/law.nsf/7dec3d01d2b5eb6448256aef00066148/2b3a1f0376ad7e3b48256862002bba1f?OpenDocument&Click=.
34. The law stipulates that the commission which the agency charges the worker for its services must not exceed 12.5 percent of the total agreed in the contract. However, in practice it is common for the agencies to charge more than this, according to China Labor Bulletin.
7 THE CHINESE MIRACLE DEFIES THE PLANET
1. Logging in the Wild East: China and the Forest Crisis in the Russian Far East, Charlie Pye-Smith (Forest Trends, 2006).
2. In September 1998, the Chinese government announced a draconian plan banning logging across much of China’s territory as a consequence of the constant flooding that took the lives of 3,600 people in central China that year, causing economic losses to the value of $30 billion. Experts attributed the floods—which were concentrated around the Yangtze river—to excessive logging and the poor quality of the dams built on the riverbanks, a consequence of corruption. “Forests, Floods, and the Environmental State in China,” Graeme Lang, Organization and Environment, June 2002.
3. “The Russian–Chinese Timber Trade: Export, Supply Chains, Consumption, and Illegal Logging,” WWF Forest Programme, 2007.
4. If logging is carried out selectively, as is the case with Siberia’s rare species, the Primorsky region’s average forestry production is between 1 and 1.5 cubic meters per hectare. Consequently, 10 million cubic meters is equivalent to between 8 and 10 million forest hectares, according to Anatoly Lebedev.
5. “Collectively, Chinese importers control the timber trade and set prices, and it is very difficult for Russian timber exporters … to do business directly with the end-users of their timber. There are no avenues for Russian exporters to enter the NE China timber market directly. At present, Russian exporters cannot supply timber to China without a Chinese trading company being involved.” “The Russian-Chinese Timber Trade,” op. cit., p. 13.
6. These were the prices in place when the authors visited the area in April 2010.
7. Russian Logs in China: The Softwood Commodity Chain and Economic Development in China, Song Weiming et al. (Forest Trends, 2007).
8. Logging in the Wild East, op. cit., and “The Russian–Chinese Timber Trade,” op. cit.
9. Estimates suggest that 95 percent of the wood that Russia exports to China consists of tree trunks that have not undergone any type of industrial processing. Logging in the Wild East, op. cit., p. 2.
10. “China does not have legislation that makes it illegal to place illegally sourced wood products on the market, and nor does it have in place due diligence systems, such as the US or Europe, or public procurement policies like Europe or Japan. There are likely to be many and complex reasons why China [does not have these policies in place], having to do with legal structures and history … and its very strong commitment to the national sovereignty of other countries, etc. I do note, however, that China is making strong strides on some supply chain and environmental issues,” Kerstin Can by from the organization Forest Trends explained in an email interview.
11. Russian Logs in China, op. cit.
12. When the authors interviewed Zhu Changling, director of the China National Furniture Association, he estimated that there were over 50,000 companies operating in the sector on Chinese territory, providing employment to 5 million people.
13. Between 40 and 60 percent of the businesses involved in exporting Mozambican wood to China are run by Chinese state-owned companies. Tristezas Tropicais: More Sad Stories from the Forests of Zambézia, Catherine Mackenzie and Daniel Ribeiro (Maputo, 2009), p. 34. In Russia, the majority of these businesses are private companies.
14. As Ana Alonso explains, there are two ways of carrying out logging in Mozambique: by obtaining a simple license that can be renewed annually and can only be held by Mozambicans; or by obtaining a forestry concession. These concessions are open to everybody, but obtaining them through the legal channels involves investing over a million dollars and dealing with several years of complicated bureaucracy.
According to Alonso, the Chinese companies do not own forestry concessions in the provinces of Sofala, Zambezia and Nampula. However, they do participate indirectly in logging in these regions, as they often use local people to gain access to a simple license. In Alonso’s words, this is a “malicious system because the Chinese company piles the Mozambican with debt and ensures that the wood that is felled is sold directly to the company under the conditions it names.” One of the tricks that is commonly used in the sector involves the way in which the quality and quantity of the wood are recorded. This enables the license-holder to exceed the annual limit for legal logging (500 tons of top-quality wood with a cost of around $8,000) so that they can repay the loan.
On this subject, the expert Catherine Mackenzie estimates that “the majority of small operators are only able to enter the sector by obtaining credit from the Asian timber buyers,” Mozambique: Chinese Takeaway! Catherine Mackenzie (FONGZA, 2006), p. 13.
15. In the absence of any official statistics, we can multiply the 7,500 tons of wood that Zheng annually exports to China by fifty, which is the number of Chinese companies estimated to be working in the area. The amount of unprocessed wood annually exported by Chinese companies in the province of Sofala alone would therefore exceed 375,000 tons.
16. “Mozambique: Resistance Forms to Illegal Logging,” UN Integrated Regional Information Networks, April 20, 2007.
17. “Between 1997 and 2007, the volume of [China’s] manufactured wood product exports—mainly plywood and furniture—skyrocketed more than eight-fold from 5.1 to 48.5 million m3,” Recent Developments in Forest Products Trade Between Russia and China: Potential Production, Processing, Consumption and Trade Scenarios, Steve Northway et al. (Forest Trends, 2009), p. 2.
18. In 2011 China imported 42.3 million cubic meters of logs, a 23 percent increase in volume from 2010. Russia was the largest supplier of logs to China in 2011, with a 33.2 percent share by volume. The National Development and Reform Commission (NDRC), China’s main economic planning body, estimates that the country will face a deficit of between 140 and 150 million cubic meters of timber for industrial use by 2015. Sources: “The Forest Industry Snapshot,” MFLNRO, British Columbia, February 2012; Recent Developments in Forest Products Trade Between Russia and China, op. cit., p. 2.
19. State of the World’s Forests 2011, Food and Agriculture Organization of the United Nations (FAO).
20. This represents a 34.4 percent increase on 2009. Source: 2010 962.7 37.1 percent, available at http://www.wood168.net/woodnews/20625.html.
21. Sharing the Blame: Global Consumption and China’s Role in Ancient Forest Destruction (Greenpeace, 2006), p. 42.
22. “Investigation into the Global Trade in Malagasy Precious Woods: Rosewood, Ebony and Pallisander,” Global Witness and the Environmental Investigation Agency (US), October 2010, p. 11.
23. In spring 2010, southern China suffered its worst drought in six decades, which affected over 50 million people. Source: “China Says Drought Now Affecting 50 million People,” Ben Blanchard, Reuters, March 19, 2010.
24. China has already built four dams on the Mekong: Manwan, Daochaoshan, Jinghong and Xiaowan. At 292 meters high, the last is the tallest in the world with the capacity to store 15,000 cubic meters of water (enough to regulate the water levels of the river). A total of 70,000 people have been relocated in C
hina as a result of these hydroelectric projects, a figure that will rise to 130,000 over the course of this decade as the rest of the dams on the Chinese side of the river are completed, according to Yu Xiaogang, director of Green Watershed. Sources who prefer not to be named told the authors that significant outrages had taken place in terms of compensation paid to the people affected by the dams (including compensation lower than the established rate and relocation to seismic hazard zones or areas with no drinking water). However, the victims “are afraid of talking to the press because this may include informers for the Chinese authorities.” China is ranked 171 out of 178 in the list produced in 2010 by Reporters Without Borders (RSF) measuring the degree of freedom of the press throughout the world. Source: “Mekong Tipping Point: Hydropower Dams, Human Security and Regional Stability,” Richard Cronin and Timothy Hamlin, The Henry L. Stimson Center, 2010, p. 29.
25. Most of the electricity generated by the dams built on the Chinese section of the Mekong is sold to Canton, Thailand and Laos, according to Yu Xiaogang.
26. “Dams in China Turn the Mekong into a River of Discord,” Michael Richardson, Yale Center for the Study of Globalization, 2009.
27. Estimates suggest that Lake Tonle Sap in Cambodia and the Mekong Delta in Vietnam are the areas that have been hardest hit by the end of the natural cycle of the Mekong river. In the case of Tonle Sap, activists and experts fear that more species will become extinct in an ecosystem that is already threatened by pollution and excessive fishing, and which provides 70 percent of the protein consumption of Cambodia’s 15 million inhabitants. In Vietnam, the dams are blamed for low water levels which have allowed the sea to win territory over the freshwater Mekong Delta, a region which is fundamental to Vietnam’s food security because of its high levels of rice production. Sources: Freshwater Under Threat, South East Asia, United Nations Environment Programme (UNEP), 2009; “China Hydropower Dams in Mekong River Give Shocks to 60 Million,” Lee Yoolim, Bloomberg Markets Magazine, October 26, 2010.