```

[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]

     THE FINANCIAL CRISIS AND THE CHANGING ROLE OF WORKERS IN CHINA

=======================================================================

                               ROUNDTABLE

                               before the

              CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 19, 2009

                               __________

 Printed for the use of the Congressional-Executive Commission on China

         Available via the World Wide Web: http://www.cecc.gov

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                             CO N T E N T S

                              ----------                              
                                                                   Page
Opening statement of Charlotte Oldham-Moore, Staff Director, 
  Congressional-Executive Commission on China....................     1
Grob, Douglas, Cochairman's Senior Staff Member, Congressional-
  Executive Commission on China..................................     1
Chang, Leslie T., author of ``Factory Girls'' (Spiegel & Grau, 
  2008); former China correspondent, The Wall Street Journal.....     3
Munro, Robin, Research Director, China Labour Bulletin...........     6
Ennis, Erin, Vice President, U.S.-China Business Council.........     9
Brown, Jr., Earl V., Labor and Employment Law Counsel and China 
  Program Director, Solidarity Center, AFL-CIO...................    12

                                APPENDIX
                           Prepared Statement

Brown, Jr., Earl V...............................................    30

 
     THE FINANCIAL CRISIS AND THE CHANGING ROLE OF WORKERS IN CHINA

                              ----------                              

                         FRIDAY, JUNE 19, 2009

                            Congressional-Executive
                                       Commission on China,
                                                    Washington, DC.
    The roundtable was convened, pursuant to notice, at 10:01 
a.m., in room B-318, Rayburn House Office Building, Charlotte 
Oldham-Moore, Staff Director, presiding.
    Also present: Douglas Grob, Cochairman's Senior Staff 
Member, Anna Brettell, and Wenchi Yu Perkins.

 OPENING STATEMENT OF CHARLOTTE OLDHAM-MOORE, STAFF DIRECTOR, 
          CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

    Ms. Oldham-Moore. Good morning. My name is Charlotte 
Oldham-Moore and I'm Staff Director of the Congressional-
Executive Commission on China. We've been holding most of our 
events on the Senate side lately, so it is kind of nice to be 
over in the House today.
    I'm going to turn it over to Douglas Grob, my colleague, 
who will take it from here.

 STATEMENT OF DOUGLAS GROB, COCHAIRMAN'S SENIOR STAFF MEMBER, 
          CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

    Mr. Grob. Well, on behalf of Senator Byron Dorgan, Chairman 
of the Congressional-Executive Commission on China and 
Representative Sandy Levin, Cochairman of the Commission, I'd 
like to thank you very much for attending this morning's 
roundtable. This morning's roundtable topic is ``The Financial 
Crisis and the Changing Role of Workers in China.'' My 
colleague and Staff Director of the Commission, Charlotte 
Oldham-Moore, will give brief introductions and then turn it 
over to our panelists, who will give brief oral remarks, and 
then we will, of course, turn the floor over to you in the 
audience for questions.
    But, first, let me just give a brief overview of the 
questions that we're going to be looking at today. Our 
distinguished panel will discuss the impact of the current 
financial crisis not only on the rights of workers in China, 
but on the lives of workers in China. This presents a very good 
opportunity for us to examine the changing role that workers, 
including migrant workers, are playing in shaping the future of 
economic, legal, and political reform in China.
    It is not uncommon these days to examine the financial 
crisis by focusing attention on the response of government and 
business to changing economic conditions. However, workers in 
China, over 170 million of whom are migrant workers, also have 
responded, and their response has been structured somewhat 
significantly by three major legislative developments that took 
effect in China last year: the Labor Contract Law, the 
Employment Promotion Law, and the Law on Labor Dispute 
Mediation and Arbitration, all of which became effective in 
2008. These legislative developments, in part, were the product 
of ferment from below, and reflect growing contestation of 
labor rights in China. So today we ask whether the contestation 
of labor rights in China now creates some space for civil 
society, space for the realization of the aspirations of 
workers, in a manner somewhat different from the past. We ask 
whether, under current conditions, the role that workers, 
including migrant workers, play in shaping the future of 
economic, legal, and political reform in China is undergoing, 
or is likely to undergo, fundamental change.
    The question is an important one because, as this 
Commission reported last year, workers in China still are not 
guaranteed, either in law or in practice, full worker rights in 
accordance with international standards. China's laws, 
regulations, and governing practices deny workers fundamental 
rights, including, but not limited to, the right to organize 
into independent unions. So, current developments prompt us to 
ask again, does this description still serve as an accurate 
description of conditions in China today, and if so, what are 
the prospects for change, if any, on the horizon? If not, in 
what ways does it not serve as an accurate description?
    Now I'd like to turn the floor over to Charlotte Oldham-
Moore to introduce our distinguished panelists.
    Ms. Oldham-Moore. Hi. We have an exceptional group of 
people here today and will move quickly through the 
introductions so we can have as much time as possible for your 
questions after the panelists present.
    Leslie T. Chang lived in China for a decade as a 
correspondent for The Wall Street Journal. Her book, ``Factory 
Girls--From Village to City in a Changing China'' was published 
last October by Spiegel & Grau, an imprint of Random House, and 
was named one of the Notable Books of the Year by the New York 
Times. She is a graduate of Harvard University and has worked 
as a journalist in the Czech Republic, Hong Kong, and Taiwan. 
She now lives in Colorado, so we're quite fortunate to have her 
here today.
    Robin Munro is the research director for the China Labour 
Bulletin. He was recognized internationally for his 
groundbreaking book, ``Dangerous Minds,'' which was a study of 
the political misuse of psychiatry in China. Dr. Munro has 
published numerous other books and articles on human rights and 
rule of law in China. From 1989 to 1998, he served as the 
principal China researcher for Human Rights Watch, and before 
that, a China researcher for 
Amnesty International in London. He is currently also a 
research associate at the Law Department of London University's 
School of Oriental and African Studies. He lives in Hong Kong, 
so we are very fortunate to have him today; we've got people 
from all points of the compass.
    Erin Ennis is vice president of the U.S.-China Business 
Council [USCBC] and has served there since May 2005. In that 
position she directs USCBC's government affairs and advocacy 
work for member companies and overseas USCBC's business 
advisory services. Prior to joining USCBC, Ms. Ennis worked for 
Kissinger McLarty Associates, the Office of the U.S. Trade 
Representative, and former U.S. Senator John Breaux. She's a 
native of Louisiana and graduated from Mt. Holyoke and Catholic 
University.
    Earl Brown, to my far right, is employment law counsel for 
the American Center for International Labor Solidarity and has 
represented trade unions and employees in U.S. labor law and 
civil litigation since 1976. He serves as general counsel to 
the International Brotherhood of Teamsters, and was previously 
associate general counsel to the United Mine Workers. Brown has 
also brought cases before international tribunals under 
international labor rights instruments such as the North 
American Free Trade Agreement [NAFTA]. He's a graduate of Yale 
and University of Virginia Law School.
    It's a great pleasure to have all of you here with us 
today. I'm going to begin with Leslie. If you could please 
begin your opening statement, that would be great. Thank you.

   STATEMENT OF LESLIE T. CHANG, AUTHOR OF ``FACTORY GIRLS'' 
 (SPIEGEL & GRAU, 2008); FORMER CHINA CORRESPONDENT, THE WALL 
                         STREET JOURNAL

    Ms. Chang. Hi. Thank you very much for having me. I thought 
I would start off talking a bit about the research I've done 
for my book, ``Factory Girls,'' and some of the discoveries 
I've made that have bearing on how migrants are responding to 
the economic slowdown.
    I first visited Dongguan--which is in Guangdong Province--
in early 2004 as a reporter for The Wall Street Journal. At 
that time, most of the major foreign papers had done articles, 
or whole series, about the situation of migrant workers. They 
generally tended to focus on the abuses and the violations of 
the system and some truly horrible experiences that workers had 
undergone.
    I became curious about what migration might feel like from 
a migrant's own point of view, how it felt to come out as a 
teenager from a small village to the city, to learn how to make 
friends, to learn how to find a job, to date people from 
different provinces, to cope with their parents, kind of a more 
personal experience of migration than I felt had been covered 
to date. In terms of my approach, I tried to be as open-minded 
as possible, to not go in with any preconceptions and to just 
hang around and see what developed.
    One thing I was very clear I did not want to do was to 
target newsmakers. When you're a reporter you often hear about 
a case of a terrible factory or some terrible things a migrant 
has gone through, either from the local Chinese press or from 
an activist or someone involved in that field, and then you go 
and find that person or that factory and you tell their story. 
What I wanted to do was just find ordinary people who were not 
headline makers, but might have interesting stories just the 
same.
    Another thing I tried not to do was to ask too many 
questions, which might seem strange as a reporter, but I felt 
like often we bring our own ideas into what we think the 
migrants are thinking. For example, if you ask a migrant: Do 
you dislike the government? They might say, yes, I hate the 
government, the officials are awful. But if you spend time with 
a migrant and they almost never talk about the government, I 
think that says something very telling about what their 
priorities are.
    So what I tried to do was just hang around and be with the 
migrants as they spent time with their friends or hosted a 
sister visiting for the weekend. I even went on a migrant blind 
date with 11 people, which I think says something about how 
hard it is to get a little privacy in China. I also followed 
what social scientists might call a longitudinal approach, 
which was to spend a long period of time observing changes in 
their lives before I wrote anything. In this case, I spent 
about two years following two young women.
    My overall conclusion was that migrants were very 
misunderstood and they were often portrayed as pawns, or 
victims, or as sources of social unrest. I felt, in general, 
all of these things were not true.
    I feel like the language that is used to describe migrants 
contributes to this misperception. For example, in the old days 
in China they referred to migrants as mangliu, which means 
``blind flow,'' which tells you what the urban stereotype of 
migrants was, ignorant and aimless, and potentially dangerous. 
These days the phrase liudong renkou, which means ``floating 
population,'' as many of you know, and even the English phrase, 
``migrant,'' I think still suggest a sense of aimlessness and 
wandering that I don't think really reflects how the migrants 
see their own lives.
    The migrants I knew were very resourceful and resilient and 
very focused on climbing up the ladder and improving their own 
lives. And while migration is definitely a major hardship for 
them--many of the migrants said to me, coming to the city is 
the hardest thing I've ever done--at the same time, they felt 
very proud of what they accomplished, and also saw migration as 
an opportunity to improve their lives.
    Just quickly, I will talk about a few qualities of migrants 
that I thought were especially striking that has some bearing 
on how they're coping with the current economic slowdown. One 
was just how mobile they were and how comfortable they were 
with this extreme mobility. Min, one of the two young women I 
write about in my book, held five jobs in two years. This was 
pretty standard.
    It amazed me that she often quit a job for the flimsiest of 
reasons. One time she quit a job because she hated her boss. 
Another time she wanted to break up with her boyfriend who 
worked in a factory, but she didn't know how to tell him so she 
just decided to leave and figured he would find out that way.
    I think the point is that being laid off, being between 
jobs is something that migrants are very accustomed to. I mean, 
it's not like they like it, but that everyone they know has 
gone through it. They have gone through it. Being temporarily 
laid off or finding another job that's not that great and 
moving up again is part of their experience. It's not so much 
associated with shame and fear as we might expect.
    Another thing that struck me about the migrants was just 
how self-reliant they were. That kind of became a point of 
pride. You'd often meet people who said, I've done all this by 
myself, I never got help from my family or my friends. That's 
how they saw their life: I'm going to make it in the city, and 
it's up to me and no one is really going to help me. In the 
same way, I don't think they expect government help. I don't 
think they blame the government in general when things go 
wrong.
    In this sense I feel that they're quite different from the 
earlier generation of workers at state-owned enterprises [SOEs] 
who definitely felt like they had a contract with the 
government. They would work for this enterprise for their whole 
life, and the enterprise, in return, would give them benefits. 
I think when this contract was broken, mostly during the 1990s, 
a lot of these workers were angry and felt very betrayed. But I 
feel like the migrants are quite different. They come from 
rural China. The government has never really given them 
anything. They don't have any expectations on that front.
    Finally, another thing was just how apolitical the migrants 
were. I mentioned that in hanging out with these young women, 
that politics and government almost never came up. I think, in 
general, 
migrants are just very pragmatic and they don't really see the 
government as helping them, so they don't really want to spend 
much time thinking about it.
    There is an incident in my book involving the young woman, 
Min, that I wrote about. We were having lunch with a couple of 
older people from her factory and talking about growing up 
under Mao in the 1970s and how hard it was. She turned to me 
and she said, ``Who is Mao Zedong, now? I don't even know.'' 
And I said, ``Hu Jintao.'' And she said, ``Oh, I thought it was 
Jiang Zemin.'' I said, ``No, he's already retired.'' She said, 
``Oh, I thought Jiang Zemin was dead.''[Laughter].
    And then she just said, ``These people are very far away 
from me,'' and I think that really captured how, generally, for 
the migrants the government is a very abstract thing.
    I think when we talk about how Chinese workers are 
responding to the global economic crisis all these qualities 
come into play. Dongguan is definitely very hard hit; a lot of 
factories have closed or fired workers or cut their salaries. 
But I think workers are adjusting to hardship and making do 
with very little, as they always have.
    My impression from talking to migrants who are still there, 
my friends there, is that some migrants have gone home and are 
holding on to odd jobs close to home until the climate 
improves. Some others went back for the lunar year and then 
came back out again to try their luck with new jobs. They 
definitely tell me they feel the difference on the streets. 
There are a lot more people wandering around looking for work, 
and there's a lot more petty crime and people try to stay home 
if they can.
    The women I wrote about specifically are doing pretty well. 
Chunming, the older woman I wrote about, just took a job at a 
synthetic leather factory, which she feels is more stable, and 
she's going to hang out there until things get better. Min, the 
other woman I wrote about, recently took a 15-percent pay cut 
from her factory, but also signed a two-year contract.
    I think her general sense is that short-term there will be 
some pain, but long-term her prospects are still good. So, in 
general I feel that workers have played a huge role in China's 
economic reform and will continue to do so, but I don't see 
them playing an equivalent role on the political front at this 
point.
    Thank you.
    Ms. Oldham-Moore. Thank you, Leslie.
    Robin Munro.

   STATEMENT OF ROBIN MUNRO, RESEARCH DIRECTOR, CHINA LABOUR 
                            BULLETIN

    Mr. Munro. Thanks, Charlotte. It's great to be here. Thank 
you all for coming, and thanks, Leslie. I actually totally 
agree with something that Leslie just said, or an idea she 
developed, about China's migrant workers--I think she said two 
things, really. One, is that they are very self-reliant, and 
another is that they don't blame the government for things that 
happen to them. I'd like to kind of try to develop some of the 
implications of those two observations, because I think they're 
very important.
    I think it's so true that Chinese migrant workers have a 
very different life experience and background from traditional 
urban workers. The urban workers were employed by the state for 
decades, had jobs for life, and when they lost all that their 
reaction was one of dismay, obviously, but also of going to the 
government to seek help: you owe us, come and fix the problem. 
So they're in a sort of supplicant position.
    But when migrant workers, as happens so much nowadays, of 
course, with the economic miracle which has been built on their 
toil and sweat, when they encounter abuses--such as not being 
paid, getting beaten by factory security staff, or laid off 
with no compensation--they don't go and blame the government. 
They know who the culprits are: it's the employers.
    Now, there are very important implications here for a theme 
I want to develop, which is that China now has an emergent 
labor movement. It's not the same as 10 years ago, or even 5 
years ago, when you just had isolated incidents of worker 
protests. Now workers--mostly migrant workers--are on strike in 
cities around the country on almost a daily basis. They're 
protesting, they're standing up for themselves. They're not 
passive, they're very assertive. But they don't couch their 
demands in a political way.
    I think it's awfully important for the labor movement in 
China that this should be so, because the greatest fear of the 
Chinese authorities, I think, where workers' issues are 
concerned, is that if they're not terribly careful, an 
independent labor movement along the lines of Polish Solidarity 
will emerge. That fear, I think, has governed a lot of 
government policy in this whole area for decades now. It 
explains why worker activists were so ruthlessly persecuted for 
many years after the start of the reform and the opening 
period.
    I think the key difference now is that when there are labor 
protests, they are not between the workers and the government. 
I mean, in Poland, the economy was all state-owned, so when the 
Gdansk shipyard workers went on strike in 1980 under Lech 
Walesa, who were they targeting their demands and their 
complaints at? It was the government. So from the outset, the 
Polish labor movement took on a political cast. But that isn't 
the case in China, where worker protests are mainly happening 
in private enterprises, and it doesn't need to be. This is very 
important because when migrant workers have problems they blame 
the employer, who is a private actor. It's all happening inside 
the civil society sphere.
    This means that the government, if it is enlightened, can 
stand above the labor relations fray and do what government 
should do, and what in our Western societies we're familiar 
with, which is to play a constructive facilitating role and 
provide the contesting parties--the workers and employers--with 
appropriate, effective channels for resolving their disputes, 
through arbitration committees, complaint mechanisms, and 
courts that are responsive to workers' demands and complaints. 
The government comes out looking good. It's not the bad guy.
    So again, referring back to the two points Leslie 
mentioned: first, migrant workers are not passive, they're very 
self-reliant and self-assertive. Probably no official in the 
countryside has ever done anything for them, or their families, 
in their entire lives. More often, they're the target of 
depredations by corrupt local officials. That's been their 
experience with officialdom, so they stay away from it, and 
away from politics. And, second, unlike many former SOE 
workers, they don't blame the government for their workplace 
problems, they blame the real authors of their misfortune: the 
private employers.
    These two factors give a strong basis for hope that the 
Chinese labor movement--which as I suggested is now emerging in 
a spontaneous, unorganized, uncoordinated way for sure, but 
it's nonetheless a de facto movement because it's so 
widespread--will develop in a healthy direction and one that's 
actually acceptable to, if not welcomed by, the government. 
It's something the authorities can maybe live with, and I think 
this perception is beginning to sift through at quite senior 
levels.
    Next, Doug talked about the great progress that was made in 
the labor rights field in 2008, with the passage of three 
landmark labor laws in one year: the Labor Contract Law, the 
Employment Promotion Law, and the Law on Arbitration and 
Mediation of Labor Disputes, all of which did strengthen 
workers' rights. These laws weren't perfect, there's a lot 
still to be done, but they all raised the bar for protection of 
workers' rights. But what's crucial to note, in my view, is 
that these new laws were essentially a concession by the 
government, a positive response to the rising labor unrest and 
growing workers' voice in China today.
    Also, last year we saw an astounding development, which was 
that official circles at quite senior levels, including within 
the All-China Federation of Trade Unions [ACFTU]--which of 
course is China's sole legally permitted union, but until now 
it has shown very few signs of life in terms of actually 
protecting workers' rights, especially migrant workers--the 
ACFTU came out openly in several parts of the country saying, 
we want to try out real collective bargaining.
    This has been a no-go area, collective bargaining in China, 
for decades because, as I was suggesting, of this nightmare 
scenario the government has of organized labor turning into a 
huge political threat that will destabilize everything a la 
Polish Solidarnosc. So for decades, the authorities have not 
been prepared to even countenance any kind of collective 
bargaining. But I think the situation now is, as I was 
suggesting, that senior levels are recognizing that the labor 
movement that's now emerging needn't be a political threat--if 
it's addressed intelligently and in the right kind of way.
    Above all, I think the official government perception 
increasingly is that to resolve this growing tide of labor 
unrest--which itself is, of course, the result of several 
decades of neglect of social justice issues across the board, 
which has produced massive anger, resentment, and discontent at 
the grassroots--something fundamentally effective has to be 
done, because if it's not, by gosh, these social developments 
at the grassroots, if just left to fester, are one day going to 
become a major political challenge for the government.
    I think probably the leadership has taken a look at Western 
Europe, North America, and other places where collective 
bargaining has been used for a long time. They found, you know 
what? It really does work. It reduces social tension, and it 
leads to constructive resolution of friction and conflict in 
the workplace, and society becomes more stable. These are the 
results of having free collective bargaining between workers 
and management as equal partners.
    You get an outcome that is ideally a win-win situation: the 
employer gets something, and workers get part of what they 
want. Collective bargaining produces compromise. It defuses 
things. In this sense it can serve the government's goals, the 
most preeminent of which these days, of course, is keeping the 
ship of state and economy sailing smoothly and not being 
deflected or capsized, someday, by a huge wave of 
uncontrollable social protests or anger.
    At China Labour Bulletin, which my colleague Han Dongfang 
founded 14 years ago, we've always tried to be forward-looking 
and optimistic. Mao liked to say he was a ``revolutionary 
optimist''--geming leguanzhuyizhe--but of course we're not 
revolutionary. But we do believe that one must be optimistic 
where trying to promote a labor movement in China is concerned. 
I mean, it's a massive task, and there aren't going to be any 
shortcuts to it.
    But I think there are good grounds for seeing the glass as 
half full in China, and even given this great setback of the 
financial crisis of the last nine months or so, I still think 
none of it is going to stop the impetus and dynamic of greater 
worker organization, looking for constructive solutions and, 
again, the migrant workers who keep on standing up for 
themselves. They're not going to lie down. I was going to cite 
some examples, but I'll leave those to the discussion. So, 
thank you. I'll leave it there.
    Ms. Oldham-Moore. Thank you. Thank you, Robin.We are very 
honored to have Erin Ennis with us today, and she will speak 
about the role of workers from the enterprise perspective.

 STATEMENT OF ERIN ENNIS, VICE PRESIDENT, U.S.-CHINA BUSINESS 
                            COUNCIL

    Ms. Ennis. Thanks, Charlotte.
    I thought what I would do is start off with just a little 
perspective on who the U.S.-China Business Council is--so that 
you can understand the perspective that I'm bringing to this 
conversation.
    I want to provide a little context of kind of why U.S. 
companies do business in China, since I think there is 
frequently very robust discussion in the United States about, 
why do companies do business in China, whether that's good or 
bad. Then finally, I'm going to come back and talk a little bit 
about the impact of the recession and how it has affected 
company operations and in terms of how that really affects how 
companies deal with their workers.
    So at the outset, the U.S.-China Business Council is an 
association of over 200 U.S. companies that do business in 
China. We represent companies that are in pretty much every 
sector--so services, manufacturing, large and small companies, 
companies that do work in China, that export to China, and 
actually the majority of them now are companies that do 
business in China to access China's market.
    As a consequence, that gives us a pretty broad scope of 
what companies are doing in China. In addition to that, the 
Council was founded in 1973, right after relations with China 
were normalized. We have had an office in China since 1979, 
which was the first time that a foreign office could open for 
an association like ours. We hope, as a consequence, our long 
history in China in dealing with the Chinese Government and 
trying to advocate open flows of trade between the two 
countries has given us some respectability on these issues and 
we've tried to approach them with a balance, recognizing that 
China doesn't do everything right, and frequently they do 
things wrong.
    When those cases come up, we don't hesitate in speaking to 
China about where the problems are. I'll come back to that, 
actually, at the end when I talk a little bit about the Labor 
Contract Law's development. But at the same time we also feel 
the need to talk about where things are going right, and it is 
a balance between those two things.
    So that's my overview, throwing in what my perspective is. 
In general, I would say that when approaching the issue of 
companies doing business in China, I like to use the question 
that probably many of you are familiar with that frequently 
comes up in political campaigns: are you better off now than 
you were four years ago? In this case, I think the question is, 
are Chinese workers better off with U.S. companies operating in 
China or were they better off before they entered? I would 
argue that, without a doubt, they're better off.
    Our surveys of our companies show that they tend to pay 
higher wages, they provide better working conditions, they 
offer better benefits, and they generally set a higher standard 
that we all would hope would have a broader impact on China's 
society over time. And don't forget that these are the 
companies that are helping to contribute to the growth of 
China's economy that has lifted millions out of poverty, and at 
the same time has created more of a market there for exported 
U.S. goods.
    One of the things that we've learned over our years of 
doing business and interacting with the Chinese Government is 
you can make more progress in persuading China by demonstrating 
to them that changes are in their interests, and that does a 
lot better job than trying to pound on the table and demand 
change from them. The alternative takes a lot longer, but we 
firmly believe that it can work.
    So there's three points that I would like to make for you 
on companies' operations in China before I move to a little 
discussion of the recession. The first point is that U.S. 
companies are a positive force in China. They tend to bring 
their global employment practices and environmental health and 
safety standards, and in most cases these practices exceed what 
the local law is, and U.S. companies act as a model for other 
companies in that area.
    We do a survey of our companies every year, and one of the 
questions that we ask them is, are the wages that you pay 
below, at, or above what the prevailing wage is in the area, 
and do you bring your environmental health and safety standards 
to the practices. In last year's survey, 83 percent of our 
members reported that they paid above what the prevailing wage 
is, and an additional 15 percent said they paid the prevailing 
wage. In addition, 91 percent of them reported they bring their 
global environmental health and safety standards to their 
Chinese facilities.
    Let me put that in a little context of what that means. By 
bringing their global practices it means that they are 
exceeding whatever the minimum requirements are that China's 
localities and government have in environmental standards. 
China has, no doubt, many substandard labor practices, but 
substandard employment and environmental health and safety 
practices typically occurred in local enterprises. Sometimes 
the enterprise is owned by foreign investors, but very rarely 
an enterprise is directly owned by U.S. companies.
    We feel the results speak for themselves. A couple of years 
ago, Manpower did a survey of Chinese employees and asked them 
who they would prefer to work for, a wholly foreign-owned 
company or a domestic Chinese company, and 75 percent of them 
said they would prefer to work for a wholly foreign-owned 
enterprise rather than a joint venture between a foreign 
company and a Chinese company or a wholly owned Chinese 
company.
    Second, the majority of U.S. companies are very sensitive 
to labor issues and they take steps to make sure that their 
suppliers meet Chinese law. Now, this hopefully should not 
surprise you: Most very large corporations have supplier 
auditing--very extensive--programs and when problems are found, 
they do their best to address them. They work to make sure that 
their suppliers come into compliance, and if those efforts 
aren't effective, then they end their relationship with that 
supplier.
    Now, China has a lot of good laws on the books and I 
suspect that probably what you'll hear multiple times during 
today's discussion is the fact that enforcement is a problem. 
That is absolutely the case for many problems of non-compliance 
on supplier issues. Better enforcement ultimately is the best 
solution for all involved.
    Company auditing can help toward that but it is not a 
complete solution. They can only be in so many places at so 
many times, and problems will continue to surface. When they 
do, they need to be addressed directly.
    In that, non-governmental organizations [NGOs] have an 
important continuing role in improving working conditions in 
China. We all gain from a fact-based approach, and if factories 
are identified with problems and have failed to comply with the 
laws, then they need to be brought into compliance. Companies 
need to make sure that those problems don't happen again.
    Finally, on just a general overview, I would note that we 
believe strongly that China's labor practices are better 
because of the presence and influence of U.S. companies, not 
worse. It is not perfect. There is a long way to go, but 
ultimately U.S. companies, especially those with good track 
records here in the United States and elsewhere around the 
world, are part of the solution in China rather than part of 
the problem.
    Now, let me turn for a minute to some of the issues that 
the recession has brought up, and one in particular that you've 
heard mentioned several times already: the Labor Contract Law. 
This is something that I think has been--for those of us that 
deal with China's Government and the development of laws and 
regulations--probably one of the more heartening developments 
of laws. The Labor Contract Law was not fully transparent in 
how it was developed, unfortunately. Rather than publishing for 
comment various modifications, at least two of the drafts were 
given only to a handful of groups and companies and other 
interested parties for comment.
    But what we saw as it developed were changes that reflected 
an interest in balancing the inputs that they actually got on 
that law. While we represent companies--we submitted comments 
three times on various drafts of the law--we didn't get 
everything we wanted. The labor unions, and the ACFTU in 
particular, didn't get everything that it wanted in that law. 
But what came out was a balanced law that we think provides a 
good context for how to move forward and ensures that Chinese 
workers are protected and that companies operating in China 
have a predictable enforcement in which to operate.
    One interesting example of the proof of how the Labor 
Contract Law has worked, and it is an unfortunate example but 
one to keep in mind. The Labor Contract Law had very specific 
provisions of what had to be done if you had to reduce your 
workforce, if you had to downsize your factory or close a 
factory, for that matter.
    What our companies have found when they've been in those 
circumstances is that it's actually provided a very convenient 
road map of how to have those discussions. There is a very 
specific set of criteria that had to be held with local 
governments about how this operation is going to be done, very 
open and frank discussions about the fact that no company wants 
to shut down factories. Obviously, everybody wants to continue 
to grow. It's been a very useful implementation.
    And the final point that I would make is that the recession 
has moved us toward a better balance between how companies and 
workers work together. Many of you may have read that prior to 
the recession there was a massive labor shortage--probably much 
of what Leslie was talking about in terms of employees working, 
moving to multiple jobs in very short periods of time was the 
fact that there was actually a labor shortage in China. It 
meant that workers could go to the highest bidder or find the 
best conditions that they wanted, and that was great for 
workers.
    But the recession has meant, with fewer jobs, that 
companies and employees are engaging in very robust discussions 
of how to retain the best workers. How do you make a worker 
want to stay at your factory if it's a great worker and you 
know that you're going to need them as you continue to expand 
what your operations are? That is, I think, going to be an 
interesting development on how labor contracts continue to 
improve and how that labor market continues to develop.
    I'll stop there.
    Ms. Oldham-Moore. Thank you. Thank you, Erin.
    Earl Brown, please.

   STATEMENT OF EARL V. BROWN, JR., LABOR AND EMPLOYMENT LAW 
 COUNSEL AND CHINA PROGRAM DIRECTOR, SOLIDARITY CENTER, AFL-CIO

    Mr. Brown. Thank you for having me speak to such a diverse 
group of very close and thoughtful China observers, and I hope 
to make a contribution if I can.
    I work for the Solidarity Center, which is a labor and 
human rights non-governmental organization [NGO] of the AFL-
CIO. We have worked in Asia since the 1970s with garment 
workers, tobacco workers, plantation workers, and a wide 
variety of industrial workers.
    My history is as a labor lawyer in the United States for 
industrial unions and as a teacher of labor law. I'm going to 
try to bring a focused industrial relations perspective here, 
and I think that's very different, perhaps, than the ordinary 
human rights perspective that we've had thus far. I may be 
wrong, but I think it's a different focus. It's not an 
abandonment of any position, but it is a focus on the 
industrial relations problems at hand.
    That is that China has the greatest and most rapidly 
assembled working class in the history of mankind; it is simply 
breathtaking. If you took a taxicab, like I did several years 
ago, around the industrial areas of Guangdong just to look at 
the factories, you would begin to appreciate the rapidity and 
scale of this industrialization process. The new factories 
didn't even have street numbers they were put up so fast. You'd 
have to have a cell phone to find out where they were because 
they had been built before the streets were named, and to see 
masses and masses of workers and contemplate something that has 
never happened so quickly, to my knowledge, in history.
    It is also, I think, true that it's a rare industrial 
society--and I mean an industrial society, not a service worker 
society, a society with a huge mass of industrial workers--with 
a lot of grievances to sustain itself over a long period of 
time without some form of worker voice and representation at 
the plant level. There is no way that labor standards and 
norms, which are a part of human rights norms--if wages get too 
low people can't live, abusive labor conditions are violations 
of people's human dignity--can be enforced by labor ministries, 
by professors, by sociologists, or any other group. They can 
only be enforced by an institution that acts as an agent of 
workers at the plant level, on the spot, where and when the 
violation is occurring.
    Witness mine workers. Mine workers in China that are three 
miles underground in the mines at Liaoning Province where you 
travel one kilometer down and two kilometers out do not have 
access to any lawyer, academic, government official if there's 
an imminent danger. They have to have an institution and a 
right and a confidence in their right to remove themselves from 
the dangerous situation.
    So I think that what I'm proposing is the need for 
industrial relations--the continuous negotiation of standards 
by representative institutions of the workers, and of the 
employers. There's a sequencing problem. There's an institution 
that calls itself a union but has no presence at the plant 
level, to speak of, in the private sector, this huge, massive 
private sector. The question is: what's going to happen with 
that institution that is not adapted to private sector labor 
relations?
    Now, I don't think anyone knows exactly the ramifications 
of the downturn, but let me just talk today about some other 
segments of the working class in China. We are all familiar 
with the plight of migrant workers' environment and of other 
light industrial sector workers in export factories, but there 
are also a lot of skilled workers, a lot of high-tech workers, 
a lot of young urban workers entering the workforce, seeking 
jobs. There are taxicab drivers, there are pilots, there are 
dock workers. There are all kinds of other workers that are 
also involved in labor disputes as well. These workers are 
spontaneously using the new Chinese labor law to improve their 
situation and are seeking to bargain with employers.
    We had a case of workers--I'm not going to describe them, 
but they have reached out on their own to the Danish union that 
represents the workers at the Danish employer's facility in 
Denmark. It's a very creative act of workers. They are seeking 
to assert standards. Unions that are responsive to their 
constituents are one important mechanism for enforcing 
standards, I think along with strict law enforcement that is 
going to be the future of industrial relations. But we don't 
yet know the full impact of the economic downturn.
    One of the major factors we've talked about is the 2008 
contract law. It has assigned many bargaining functions, many 
plant-level representation functions, to a union that is 
institutionally, as I said, absent and otherwise not equipped 
structurally.
    It doesn't have employer-specific research--it doesn't have 
bargaining expertise, it doesn't have skill and grievance 
handling and mediation. It's a sign some of those function in a 
very skeletal, undeveloped form to this union. The question is, 
can the union step up to the plate? If not, what groups will 
emerge to take advantage of that space?
    I just want to suggest that one of the functions, one of 
the great things the international labor movement can do better 
than any other group, is assist pro-worker voices in China, in 
the union, with policymakers, in their legal aid societies, to 
begin this industrial relations function, to begin to work to 
help and partner with Chinese counterparts on bargaining skills 
and to begin to bargain so that you can have the bargaining. 
You might even have the bargaining before you have the perfect 
institution to do the bargaining. Imagine what would happen if 
you actually had the most minimalistic form of bargaining; for 
example: imagine miners were able to obtain a 0.5-percent wage 
increase throughout China, or one small sector of one industry 
in Guangdong Province was able to get some minimal wage 
increase. How many millions of workers would be directly 
affected and how many other workers would watch that bargaining 
and seek to replicate bargaining in their factory or sectors?
    Under Article 41 of the 2008 Labor Contract Law there is 
bargaining going on now about layoffs. The union must get, now, 
notice of every layoff and has bargained for reduced salaries 
and furloughs versus unilateral mass layoffs. In the United 
States, employers can unilaterally discharge. In China, they 
have to negotiate in some manner. This is incipient 
negotiation, this is very inchoate, but it's the beginning of 
negotiation. I think this is where a focus on industrial 
relations and the skills of the international labor movement 
can actually contribute to improving industrial relations in 
China if done appropriately and with a sense of equality and 
mutual respect, and not for extraneous agendas.
    Thank you.
    [The prepared statement of Mr. Brown appears in the 
appendix.]
    Ms. Oldham-Moore. Thank you, Earl.
    We have an extraordinary group of people with us today who 
have an immense wealth of experience. At this stage in the 
proceedings we will turn to the audience to pose questions. 
There will be an official transcript, that will be published on 
our Web site.
    So when you stand and offer your question, please feel free 
to offer your professional identification and your name, of 
course. But if you don't want your name to be listed in the 
transcript that will later become a public document, just let 
us know.
    So let's now turn to the audience. Our first question is 
from Anna Brettell.
    Ms. Brettell. Hi. I'm Anna Brettell from the Congressional-
Executive Commission on China. My question relates to strikes 
in China. I am just curious if strikes are still illegal in 
China and if there are these strikes, as Robin pointed out, on 
a daily basis, then what happens to the strikers? Are they 
treated differently now than they were maybe 10 years ago?
    Ms. Oldham-Moore. Who are you directing this to?
    Ms. Brettell. It could really be directed to anyone who 
wishes to answer, but I'd like to hear from at least Robin and 
Earl.
    Ms. Oldham-Moore. Robin, then Earl.
    Mr. Munro. The question was, how is the government dealing 
with striking workers?
    Ms. Brettell. Basically, are strikes still illegal and what 
happens to the strikers? Are they treated differently now than 
they were 10 years ago? So, it's three parts.
    Mr. Munro. Okay. As I mentioned in my talk earlier, I think 
the government's reaction, and local police authorities' 
reaction to incidents of labor unrest has changed significantly 
over the last, certainly, 20 years, and even within the last 5 
years. In the old days, including the 1990s, any effort by 
workers to stage protests, to organize unofficial campaigns 
against bad conditions in a factory just triggered all of these 
paranoid reactions from the authorities, who would tend to 
label them as politically subversive elements, and they'd be 
arrested and sent to jail.
    I'll give an example. In 1999, a labor lawyer in Baotou in 
Inner Mongolia, named Xu Jian--a man of the people, he worked 
for himself, a self-trained lawyer--was very committed to 
representing workers in court who were involved in labor 
disputes. He had a law office there, and because he was in 
contact with so-called ``overseas hostile forces,'' meaning 
foreign NGOs and the like, he was arrested and charged with 
``subverting state power,'' the most serious charge in the 
Criminal Law, and was sentenced to four years in prison. He was 
brutally beaten, often starved, and made to serve his entire 
four-year sentence.
    Now, that was 10 years ago. The same kind of thing was 
happening in the early 2000s. Overall, I think what's changed 
nowadays is that the sheer scale of worker activity has become 
so great--with workers carrying on strikes or mass protests 
almost every day in cities around the country--that it would be 
politically untenable for the government to continue to see all 
these incidents as politically motivated challenges against the 
government. It would be ludicrous. It's obvious they're not. 
Overall, the government realizes that these events are driven 
by real livelihood issues on the workers' part: they're under 
pressure, and in many cases their backs are against the wall, 
because their wages are so low and some of them haven't been 
paid for six months, for goodness sake. How can you live that 
way? So you protest. The government realizes this, and so it 
stops, by and large, arresting them.
    So there's this recognition that worker protest is not 
inherently a political threat. At the same time, I think the 
authorities are very aware that if they're not very careful, if 
they overreact with police suppression to what are just 
livelihood-based issues, then they will make things much worse. 
So, there's also an anxiety on the government's part not to 
inflame an already volatile situation.
    What we find nowadays, more often than not, is that if 
there's a big enough protest going on, local governments will 
probably intervene and try to negotiate a settlement that will 
probably benefit both sides in the end. And workers know this 
and they actively play this game, even though protests are 
banned, technically. This is the kind of dynamic we're 
increasingly seeing now. Again, it's quite hopeful, I think.
    But of course, there are notable exceptions. I'm not trying 
to suggest that repression in China is really easing up 
fundamentally. Certainly, the more high-profile cases involving 
political dissent, overtly human rights-related law cases, and 
lawyers representing the victims, these are the kind of people 
who are still A-1 targets for repression and who often do still 
go to jail. So overall, it's a mixed picture.
    Ms. Oldham-Moore. Okay. Earl?
    Mr. Brown. Well, I think I agree with Robin. There is less 
of a--but I want to recount a discussion I had with a Chinese 
labor lawyer who was shocked to learn that comparatively under 
U.S. labor law the right to strike is not a constitutional 
status and that in the United States, many strikers are 
arrested. He and I went through the history of it, and he said, 
``Oh, you mean when the strike becomes effective on the 
employer it becomes illegal? ''
    I said, that would be a fair, practical summary of the law 
of the United States, which also leaves people in the United 
States, as we speak right now with the few strikes we're 
having, do get thrown into jail and do get put in jail for 
civil contempt for 18 months without a right to jury trial. So 
I think you have to have a comparative perspective on what 
happens.
    I think there is an unholy alliance around the world 
between local government and local employers to use the 
criminal law to criminalize industrial disputes and to bring 
out the police to whack people on the head and get them back to 
work and suppress the dispute. I think that was the standard 
operating procedure in China. I think there has been a retreat 
from that.
    But I think, as Robin says, off the stage in quiet places, 
strikers are getting thrown in the pokey and beaten up and hit 
and everything else. We have a partner right now that is under 
a lot of pressure strictly through the facts of both employer 
and local government. I think this is the bond between law 
enforcement, local government, and the local branch of the 
ACFTU. There can often be very detrimental alliances for 
workers.
    However, the Party is realizing that with this scale of 
striking, you can't use the billy club to solve it and has 
issued a directive to the Party officials, which I thought was 
great, saying get out from your desk and get out there from 
hiding behind the police and solve the problem. So, I think 
that's a hopeful trend.
    Ms. Oldham-Moore. Okay. Thank you.
    Robin? Twenty seconds, you said.
    Mr. Munro. Yes. I'll just quickly mention one item. China 
Labour Bulletin has a large project in China called the Labor 
Rights Litigation Project, through which we bring workers and 
lawyers together and provide pro bono assistance in the form of 
lawyers' fees, so the workers can sue abusive employers.
    Under that broad heading we also have the Criminal Defense 
Project, which is expressly designed so that we can provide 
defense lawyers to worker activists who get arrested in the 
line of union duty, or union-type duty. They are mostly workers 
who have organized protests, or people identified by the 
government as ringleaders of disputes that have been met with 
repression. We are 
actively providing lawyers and legal assistance to a number of 
workers in that situation right now who are in detention.
    Ms. Oldham-Moore. Great. Thank you.
    We have a lot of people who want to ask questions, so 
please direct your question to one person. The lady in the 
first row, please, and then Mary.
    Ms. Kwang. Orinne Kwang, Center for Diplomacy and 
Democracy. I was wondering whether--one person? I'm going to 
say Leslie, because you've interviewed a lot of people. In the 
non-worker community, because when this migrant migration 
started, the urban dwellers always looked at them as trouble, 
or the crime rate goes up. So what is the situation now? If we 
have an opportunity to educate the non-worker community, 
especially those ones who are influential, for example, 
bloggers, what kind of activity would you recommend to expose 
them or help them with their impression or support for the 
worker community? Thank you.
    Ms. Chang. Yes. I do find that it has improved over the 
years. I think the government is actually part of it, because 
in the 1990s you would often read stories in the paper, the 
government-influenced or controlled newspapers, noting that 
crime was high in the city in Shanghai or Beijing because of 
the migrant population.
    But I think starting around 2002 or 2003, the government 
made a pretty concerted effort to acknowledge that migrants 
actually have made a huge contribution to the economic growth 
of the country and we should start protecting them more, and we 
started seeing laws coming out saying migrant children should 
be able to go to school in the city, and all sorts of things. 
Again, enforcement is the issue, but I think the general 
mindset has shifted.
    In terms of average people in the cities, I feel like there 
is still a certain condescension and misunderstanding toward 
the migrants. For example, one of the two women I wrote about, 
Chunming, started off as an assembly line worker, and then over 
the years she became a salesperson and kind of a proto-middle-
class type worker.
    One time she was walking down the street with one of her 
friends who is a nurse, so in a similar class as Chunming but 
more educated, and they were passing a place where there were a 
lot of migrant workers who were eating snacks and singing 
karaoke. This nurse turned to me and said, ``Oh, look at the 
poor migrant workers. Their lives are so terrible. You give 
them just a little snack and they're happy, because they're so 
desperate.'' I was standing next to Chunming and she didn't say 
anything, even though she should know better, coming from this 
world.
    So I think there's this automatic kind of condescension and 
pity that urban people have for rural people and migrants and 
you see that a lot in the Chinese press as well. The articles 
tend to be, look at these poor migrants, we should help them. I 
think the instinct might be good, but the attitude is very 
disrespectful. In terms of what we can do, if you can reach 
bloggers and reporters and get them to try to spend a bit more 
time really understanding how migrants operate and what their 
lives are like, I think that would make a difference. I think 
the problem is, most people in urban China who have worked and 
clawed their way into comfortable positions do not like to 
spend a lot of time in local factory towns or in villages. I 
felt that even among a lot of scholars who were supposedly 
studying migrants, they really liked to spend most of their 
time in Beijing in nice offices and in academic departments.
    Ms. Oldham-Moore. Thank you.
    Mary Gallagher, please?
    Ms. Gallagher. I have two questions, but they're for two 
separate people.
    I have a question, I think, for Leslie, first. I think 
there's sort of this juncture between some of the things that 
Leslie said and some of the things that Robin and Earl said, 
particularly in terms of this idea that there's an emerging 
labor movement that is heavily concentrated in the migrants.
    So what I want to ask, and maybe if Leslie would answer it, 
or somebody else, is maybe what we need to do to figure this 
out, is there an emerging labor market or is, perhaps, 
migrants--apolitical and very self-reliant is to break migrants 
down more and to talk about what are the differences within the 
migrant population and where we might see variation.
    I know your remarks focused on women. So is there a 
gender--what makes migrants--not necessarily--government--
active. My own impression would be perhaps that it has to do 
with how long they stay in the city and how stable they might 
feel, and then that--interests in their political life, their 
social welfare, activate them.
    So the second question is for Erin, and it's about the 
labor contract law debate and about the role of the foreign 
business associations. I think that was a really interesting 
debate and I think it was really, like you said, heartening in 
the sense that it was relatively transparent, relatively 
participatory.
    I think the problem for foreign business associations is 
that you did the work for all employers in China, at least 
publicly, and in a sense we're blamed for that in the media. 
I'm wondering what your impression is in going forward. Does 
the U.S.-China Business Council want to continue to take that 
role very publicly, or in the next round where there's a law 
that you have a big stake in, will you also perhaps go through 
the back door like a lot of Chinese employers do?
    Ms. Oldham-Moore. Both of those questions get to get 
answered. Okay. Thank you. Leslie.
    Ms. Chang. Yes. I guess it sounds like there's a natural 
conflict between what I'm saying and what Robin was saying. I 
think my approach was just that--I felt people were maybe 
getting the wrong impression that every worker is on the edge 
of unrest and protest. Once something goes wrong, they're out 
on the street. I felt like, by focusing on a few so-called 
``ordinary'' people who were not activists or organizers, that 
that would convey a very different impression.
    But definitely, there are protests all the time in cities 
all over China. In fact, when I was in Dongguan I saw some 
small-scale protests on all sorts of issues. Again, as Robin 
was saying, there isn't one kind of over-arching political 
grievance, but it's more like, we didn't get paid, or they're 
favoring local people over migrants, all sorts of nitty-gritty 
issues.
    In terms of how to identify the migrants who are moved to 
protest versus those less likely to do so, maybe others have 
done more studies on this. I do think that young women may be 
less likely to protest than, say, 45-year-old men, just because 
they feel like they're very vulnerable and therefore their 
focus is all the more on their own personal situation.
    Ms. Oldham-Moore. Erin, please.
    Ms. Ennis. Thanks for the question. I'll be honest with 
you, we are big fans of transparency. One of the things that 
makes it possible to do business is knowing what your operating 
environment is going to be like. The advantage to transparency 
and having more and more laws out for comment, is the goals 
that are set out. So while I think we probably did do a lot of 
work for others who might have been potentially working to try 
to make it a less stringent law behind the scenes, our approach 
to it was, we have to represent the interests of U.S. 
companies. We try to do everything as close to the United 
States' legal standards as we possibly can because it's a 
predictable business environment that companies like.
    The issue of transparency itself is one that we take 
seriously. For those of you who follow China a little more 
broadly, the end of 2007, I believe it was, beginning of 2008, 
China had put out several directives on mandating transparency 
from the central government, mandating that laws be put out for 
comment.
    Then it was modified in 2008 as well to mandate for the 
state council that laws not only had to be put for comment on 
the central Web site, but they had to be out for 30 days so 
that you could actually comment on them. What had happened in 
the intervening years, is rules would be put out for comment 
for two weeks or so. If you're dealing with something as 
detailed as a patent law that's 300 pages, how do you ever come 
up with a full set of comments in that period of time?
    The implementation of even a state council directive on 
this has been spotty. Some things have come out for comment, 
others have not. We comment on as many as we possibly can, if 
for no other reason than to encourage the government to 
continue to put these out for comment and to recognize that at 
the end what it's going to get is constructive input that is 
designed to enhance what they are trying to do--as in the case 
of the Labor Contract Law--rather than trying to stop them from 
putting out anything. So, we'll keep at it and there are others 
trying as well.
    Ms. Oldham-Moore. Thank you, Erin.
    Mr. Bork.
    Mr. Bork. My name is Thomas Bork and I'm with America's 
Development Foundation. I have a question about the 
urbanization that's going on. China is going through a fast 
mobilization of the rural people into the urban centers, with 
creating new cities in several provinces. How is this going to 
impact migrant workers in Hebei, Liaoning, and also Hunan 
Provinces? They have some big projects being financed by the 
Asian Development Bank and things--so they're taking huge areas 
in a rural area, bringing people into the cities.
    Ms. Oldham-Moore. Okay.
    Mr. Bork. It's like--for lack of water, a lot of the cities 
tripled in size over the last few years. How will this impact?
    Ms. Oldham-Moore. Okay. Who would like to take that?
    Ms. Ennis. I'll take a crack at it. I don't know that I can 
necessarily speak to how it affects migrant workers because I 
can only talk about companies. Just to put this in a little bit 
of perspective, China ranks its cities and they do it in tiers, 
a first-tier city--the ones that are on the Pacific Coast--and 
then on down as you go to the interior. They have had programs 
for the past few years trying to get companies to invest in 
third-tier cities, fourth-tier cities, fifth-tier cities.
    You're getting further and further into the interior--we're 
still talking about cities with over a million people. We're 
not talking about small towns necessarily where companies are 
not going to be able to find a workforce, but definitely 
difficulties up until recently in infrastructure problems in 
getting companies out there.
    So I think the number one challenge from a company 
perspective is, while China is very interested in dealing with 
kind of developing more cities, creating more jobs, the further 
you get from an infrastructure system where a company can 
produce a product and distribute it within China itself, it 
becomes a little more difficult the further you get away from 
where the heart of that system is. Companies are going to be 
looking at, number one, ways they can get a product to market, 
and number two, if they have the workforce that's going to be 
able to get to where they are and to be able to function in a 
modern factory. So, just some considerations on the company 
perspective. I'm sure there are other comments on the migrant 
aspect.
    Ms. Oldham-Moore. Thank you, Erin.
    Robin wants to comment, briefly.
    Mr. Munro. Yes. A few thoughts on that interesting 
question. To the extent that the kinds of cities you're talking 
about are coming out of nowhere, which is basically the case, 
the population is all 
migrant workers, apart from the professionals who come there to 
provide high-level services. They're basically migrant worker 
towns--or as Erin says, cities, large ones. Dongguan is a great 
example of this, where Leslie spent so much of her research 
time with workers.
    In these situations, the established discourse from 
previous decades on migrant workers becomes irrelevant. That 
discourse says that market workers are out-of-towners, that 
they have conflicts with the majority, the established urban 
population. That problem clearly doesn't exist, so there's kind 
of a fresh-start element here.
    In fact, in many cities now, as part of the overall effort 
by the authorities to raise the profile and public image of 
migrant workers, the local government is promoting terms like 
``new urbanites''--xin shimin--as a new name for migrant 
workers, which is much more respectful, and also acknowledges 
that they're here to stay, they are a new immigrant population 
and therefore deserve some new rights. Names are very 
important, especially in China--Confucius and the 
``rectification of names,'' et cetera.
    So there are some positive things, but I think these new 
cities are also a huge challenge administratively and fiscally 
for the government, because the old arguments--they're out-of-
towners and the city has to use its resources for the 
established population, and so forth--against providing migrant 
workers with full social welfare services, access to subsidized 
medical care in the cities, subsidized health and education for 
their children, are simply no longer valid.
    But so far I think what we've seen is that, rather than the 
government saying, well, the whole population is made up of 
migrant workers, therefore we have to give them all the social 
services and welfare that urbanites in other cities enjoy--the 
example of Dongguan and other new cities shows that they just 
don't do that. It's a city of over 10 million, nearly all 
migrant workers, and they still have very little in the way of 
social services. So I think a real shift of vision is needed 
from the government on this issue quite urgently.
    Ms. Oldham-Moore. Thank you.
    Yes, sir?
    Mr. Ostwick. Yes. I have a question actually for Mr. Brown. 
My name is Peter Ostwick. I'm an intern in Senator Sherrod 
Brown's office. I'd like to thank the panel for their work in 
China. I think you guys are doing a great job with your 
inspirational work.
    Mr. Brown, how do you think--my Senator is from Ohio, and 
we're representing Ohio. How do you think that opening auto 
industries in China would benefit workers in Ohio?
    Ms. Oldham-Moore. That's a great question. This gentleman 
from Ohio asked, how does opening auto industries in China 
benefit Ohio constituents.
    Mr. Ostwick. Ohio, and auto industries in general.
    Ms. Oldham-Moore. Okay. Go for it. Are you running for 
Congress now? [Laughter].
    Mr. Brown. I am a great admirer of Senator Brown.
    Ms. Oldham-Moore. Yes. He's wonderful. He's a commissioner.
    Mr. Brown. I do not think that--one of the problems posed, 
and this is why I argue from an industrial relations 
perspective and I argue for bargaining and I argue for an 
actual labor movement approach to China, adapted to China's 
circumstances, is to stop the race to the bottom. I think we 
have in this country--since you asked the question, we have one 
of the few countries in the world without an industrial policy 
and we shift our manufacture overseas.
    I don't think it helps American workers to take American 
work to China and produce it at a lower labor cost. I think it 
is the very definition of a race to the bottom. I think it is 
part of the reason that the world economy is unbalanced. I 
don't think we stop that alone with human rights interpositions 
from outside. I think we need an agency in China to improve 
wages, hours, and working conditions.
    Everybody says, to that answer, well, call me in the next 
century. My answer to that is, if you had been in Shenzin in 
1980 and worked with the 30,000 fishermen in the fishing 
village there, and you went there now to see the fishermen--who 
knows, 10, 12, 13 million, you would have said that was not 
possible in 30 years. China has accelerated labor contract law 
and can be, as Robin has said, with appropriate investor 
relations focus, the beginning of the--race to the bottom.
    If I could just say, one of the things--this is a somewhat 
complex question. That is that I'm not advocating that anyone 
give up their position or their trade remedies that American 
workers receive. I do think we have to be careful not to blame 
Chinese workers for this crisis. I think we have to make 
distinctions between, what is taking American jobs and what is 
opening up jobs that are for the Chinese market, which is a 
hugely developing market. There will probably be, no matter 
what anyone says, production in China to do that. But I think 
that American workers and Chinese workers have common problems 
and should work mutually to solve them for everyone.
    Mr. Ostwick. I'm going to refer to that other question of, 
what are Chinese workers doing from--people like yourself are 
focusing on human rights in China, labor conditions, and that's 
wonderful. But what are the Chinese workers doing for us over 
here?
    Mr. Brown. What do you mean by----
    Ms. Oldham-Moore. His question was, what are Chinese 
workers doing for us here in the United States?
    Mr. Ostwick. Right.
    Ms. Oldham-Moore. That's a huge question. Would you like to 
take that, Robin? You're very smart.
    Mr. Munro. Okay. Let me be provocative here.
    Ms. Oldham-Moore. Yes. You can say it and we'll throw 
tomatoes.
    Mr. Munro. I think it's an unfair question, to be honest: 
what are Chinese workers doing for workers here in the West? 
Actually, they have quite enough problems of their own right 
now. I mean, it's notoriously difficult to get workers 
anywhere, even in developed countries, to cooperate in any kind 
of cross-border solidarity action. It very rarely happens. The 
American Center for International Labor Solidarity [ACILS], I'm 
sure, know this very well, working in the area of international 
labor solidarity. Workers have to deal with the situation and 
the problems in the place where they're living. Chinese workers 
are confronting not just their employers, but sometimes also 
the local government. It's asking too much of a labor movement, 
even in a highly developed country, to spend a lot of time 
worrying about workers in other countries, to be honest. I 
think that's the short answer, and particularly in China, where 
the labor movement is still so underdeveloped.
    I'd also like to return briefly to an earlier point: I 
don't actually think there's any kind of conflict or 
contradiction between what Leslie was saying and what I'm 
saying. I'm not trying to argue, when I say there's an emerging 
labor movement in China, that workers are all on the move now 
and becoming ever more militant and challenging. But then, 
that's hardly the case in any country. Here in America, what is 
it: 14, 15 percent of the workforce is unionized? That's all? 
But no one would say that America doesn't have a labor 
movement. Indeed, it has a strong one--one that wants to be a 
lot stronger, but it's certainly there, no question.
    What I'm saying is there are now significant numbers of 
workers in China who are fighting back and standing up for 
their rights all over the country. We're now able to say, 
whereas 10 or 15 years ago there was a dismal void where worker 
action and solidarity was concerned, that's no longer the case. 
There is something happening. It's definite and it's a reality. 
I also believe that political history tends to be made by 
minorities anyway.
    If you have an entire workforce on the move and being 
militant, it probably means you have either fascism or 
revolutionary Communism. Those tend to be the only two forces 
that can achieve such a result, and I don't think anyone here 
wants that. So we're talking about a minority of workers in 
China, but a significant and important minority. That's what I 
mean by the emerging labor movement, and I would also 
characterize it as being at a ``pre-union'' stage of 
development.
    Ms. Oldham-Moore. Earl wants to make a quick comment, and 
then the young woman with the stripes is next.
    Mr. Brown. There are concrete examples of joint action 
between Chinese workers, Asian workers, and people in that 
labor market--it's not just China--that I'm happy to talk to 
you about off the record.
    Mr. Ostwick. All right.
    Ms. Oldham-Moore. Earl and the gentleman from Ohio will 
have a tet-a-tet up here. Okay.
    Ms. Guthner. Hi. I'm Carol Ann Guthner. I'm from the State 
Department. This is a question to Leslie. I was wondering what 
you think the implications are of the Chinese Government 
relaxing and changing the hukou system for workers you 
observed, and kind of all workers.
    Ms. Chang. Yes. I think it's different in different places, 
as with so many things in China. Where I reported in Dongguan, 
which, as Robin said, was almost all migrants and very few 
local residents, I didn't find the hukou to be much of an issue 
because almost everyone in the city is an outsider. I actually 
spent six months in Dongguan before I met my first local 
Dongguan person.
    Ms. Oldham-Moore. Leslie, may I interrupt?
    Ms. Chang. Yes?
    Ms. Oldham-Moore. Just define the term ``hukou'' for our 
non-China experts.
    Ms. Chang. Oh, I'm sorry. Yes. The hukou refers to the 
household registration system. When someone is born they're 
issued a document that identifies what place they're attached 
to based on, I think, where their mother lives. In the old 
days, this meant that even if a migrant went to a city, he or 
she would not have any benefits and would always be a second-
class citizen and suffer a lot of discrimination.
    But in a place like Dongguan, because there's no sense that 
there is that much of a local population, the hukou was not 
really an issue for migrants. They would come to the city, find 
a job at a factory, and then be paid their wages and just focus 
on personal issues. I did get to know some couples who had 
lived there much longer and eventually bought apartments. I 
knew one migrant couple who had lived in the city about 10 
years and were able to buy a local apartment, and then also to 
buy a local hukou registration, so that when their daughter 
entered elementary school she would be able to be registered.
    So I feel like in a place like Dongguan things sort of 
evolve as they go and people figure out solutions by the time 
they have to. In a place like Beijing or Shanghai where there's 
a very strong local population with a relatively small number 
of migrants, there might be more issues for migrants. They 
still feel very much discriminated against, can't get certain 
jobs, and their kids can't go to good schools. But I think, 
again, that is also changing. The government has policies in 
the smaller cities now that allow people to move there from the 
countryside and apply legally for local hukou registration. It 
seems that eventually these moves will get to the big cities as 
well.
    Ms. Oldham-Moore. Thank you, Leslie. I want to encourage 
the audience to visit our Web site. We have a lot on the 
household registration system and hukou reform. Wenchi Yu 
Perkins, of our staff, has done a great deal of work on that, 
and she's right there if you want to talk to her after the 
event.
    Ms. Seger. Hi. My name is Kayla Seger. I'm an intern for 
Senator Max Baucus. I had a question more about the Olympics 
and how that has impacted migrant workers. This is more 
directed toward Leslie. Sorry about all the migrant worker 
questions. But I just returned recently from China, and I lived 
in Beijing.
    A lot of times, while they were preparing for the Olympics, 
they would absorb workers into the workforce who would do 
things like paint the sidewalks green to make it look like 
there was grass, plant trees for 100 meters on each side of 
Xingchao Mu, which is the big highway there, in order to kind 
of put out this impression that China was urbanizing and 
developing, but also becoming green.
    So my question is more, how do these people who were 
absorbed into these roles, especially during the Olympics, how 
are they impacted by the recession, but more so, is the 
government helping them to get jobs now that the Olympics are 
over, and how is that carrying on long term----
    Ms. Oldham-Moore. That's a good question.
    Ms. Chang. Yes. Thanks for your question. I don't know 
specifically whether the government had any policies for this 
group of people. I would say, in general, the government isn't 
doing that much for these migrant workers. Again, I think the 
migrants just figure things out on their own. In terms of all 
the building that went on surrounding the Olympics, I think the 
migrants came and realized there was a huge opportunity, 
especially for the young men who work in the construction 
trades, and realized that we're going to have six months of 
really good work and then it's going to be finished.
    So they know all these things. They know all the 
information they need to know about employment in terms of 
their own interests, and then when the time comes and the job 
is finished, then they might hear of another job in another 
place or hear of something else closer to home. So again, I 
just feel like they're very fluid and they just operate the way 
they always have, which is just to hear about work and pursue 
leads as they go.
    Ms. Oldham-Moore. Okay. Thank you. The last two questions: 
the gentleman there in the black shirt, and then Wenchi. Thank 
you.
    Mr. Osh. My name is Tyler Osh. I'm here on behalf of the 
U.S.-Asia Institute. I have a question for Mr. Munro about the 
development of the rule of law in China.
    It's been mentioned that labor rights legislation has been 
developing, but just because there's legislation, that doesn't 
mean it's actually going to be put to use. This is true for 
industrial societies, especially in the Korean labor movement. 
So I am just wondering, you mentioned the litigator program or 
project, right?
    Mr. Munro. Yes.
    Mr. Osh. And I'm just wondering, how much do workers 
understand their rights via this new legislation, and how do 
you create a space in which they can learn more about these 
rights so that they know they have the right to be----
    Mr. Munro. Thanks. A very good question. Well, I think to 
begin with, the first part of the answer is that migrant 
workers in China increasingly do know that there are laws that 
protect them. Now, I think most citizens, even in economically 
developed countries, including well-educated people, are not 
going to be experts in laws. They need a lawyer to explain the 
details to them.
    But the awareness is sufficient if you know there are laws 
that protect you and you have a rough idea that employers 
should not be allowed to do X, Y, and Z to you. They shouldn't 
be allowed to withhold your wages indefinitely, or at all, and 
they also shouldn't be allowed to expose you to toxic 
chemicals, for example. They should give you a safe working 
environment. You should be entitled not to have to do forced, 
compulsory overtime to ludicrous levels such as 13-, 14-hour or 
even longer days. China's migrant workers know quite enough in 
this general area to know that they have rights. As you've 
suggested, the main problem with the new labor laws is there is 
no real will on the part of local authorities to enforce them, 
as Erin was saying. This is the big problem. There are lots of 
reasons why that is.
    The central government, by the way, even following the 
impact of the economic crisis, which you would have expected 
perhaps to lead to a backtracking and soft-pedaling of these 
new laws, in the interest of keeping enterprises viable and 
avoiding anything that might make the economy even worse--
they're not doing that.
    The central government is sticking to the line that these 
are vital laws, they must be enforced. I think this reflects 
the leadership's keen awareness that unless they do something 
genuinely effective to halt the steady increase in labor 
protests, they're going to have a political problem, a 
stability problem in the country.
    The central government, by and large, is committed to these 
laws. It is local governments that do not enforce them, and 
there are several reasons. One is that local authorities are 
afraid if they enforce the labor standards and law, they'll 
scare away investors. They'll go to the neighboring county or 
city--their competitors--and they don't want that. That's a big 
problem.
    Another is that there's not enough labor inspectors. In 
fact there are pitifully few of them under the local labor 
agencies. It's just a massively under-funded, under-valued area 
of the administration in China. I think, Mary, you probably 
know this better than I do. In the whole of Shenzhen, where 
there are tens of thousands of factories, there's only a small 
handful of labor inspectors. How can they enforce the law?
    Also, the inspectors are not paid enough, so they're 
vulnerable or susceptible to bribery by employers. They come in 
to inspect a factory and the owner will say, ``By the way, 
there's a package there, feel free to take it away when you 
leave; no need to open it, you know what it is.'' All these 
things make enforcing the labor laws a big problem.
    But what is crucial, though, is that even after the 
economic crisis began, workers themselves have not been scared 
off or discouraged from bringing labor dispute cases into the 
courts or to the labor arbitration committees--the 
administrative bodies that workers, by and large, have to go 
through first before they can sue, if suing is necessary.
    The figures from the government show this. In 2008, after 
the Labor Contract Law was brought in, there was a 98 percent 
increase in registered labor disputes over the previous year. 
Of course, the financial crisis only began last autumn, really. 
But hey, the latest figures show that for the first three 
months of this year, labor dispute cases have risen at a 
similar, or even higher rate than last year. So clearly workers 
are not being discouraged. They know their rights and they want 
to have them enforced.
    What they don't have is proper legal advice and 
representation. The cost of hiring a lawyer usually outstrips 
what migrant workers can afford. Last year China Labour 
Bulletin adopted, through our Labor Rights Litigation Project, 
around 600 new labor dispute cases, and over half of them 
eventually had to go to the court litigation stage. In our 
experience, the average cost for a migrant worker to hire a 
lawyer--covering labor arbitration, first trial, and often also 
an appeal hearing--is about 5,000 yuan, which can be at least 
three months' total salary for many workers. An impossible 
amount. So they need access to legal aid, but it's just not 
available. There's huge overall demand from workers seeking 
redress and compensation from employers, but they mostly can't 
afford to make use of the available legal channels.
    Ms. Oldham-Moore. Thank you, Robin.
    Very briefly, Erin. Then we'll go to Wenchi for the last 
question.
    Ms. Ennis. I just want to pick up on one quick point that 
Robin had made, and that was at the beginning of this year, as 
the recession was really starting to take place, we started 
hearing noises that some companies, and particularly some 
provincial governors, were potentially trying to go to Beijing 
to suspend implementation of a labor contract law. Our 
recommendation to the Chinese Government at the time was that 
that was the absolute wrong thing to do. The reason why you 
have a labor contract law is to guarantee that workers and 
companies have a predictable environment.
    It shouldn't be based on what the economy is. And if you 
want to avoid something like what Earl has suggested, a race to 
the bottom, then you suspend your laws that protect workers and 
companies, so they know the playing field, at a time just 
because the economy isn't doing well. We've been very pleased 
that the law has not been suspended.
    Ms. Oldham-Moore. Thank you, Erin.
    Wenchi Perkins, please.
    Ms. Perkins. I'm from the Congressional-Executive 
Commission on China. My question is for Leslie. I think we 
talked a lot about workers in factories. What about migrant 
workers working in informal economy such as nannies and the so-
called dagong mei, there are more and more of them--what kind 
of protections are available for them? And I have another 
question for Erin. You've said a lot about American companies 
doing great things--raising the bar, higher standards. I wonder 
what American companies have been doing to help their 
counterparts, the Chinese companies, raise their bars or help 
them improve their policies to further the protection of 
workers. I think that Chinese workers have done a lot for us 
and the world, producing goods and supplying all kinds of 
materials.
    Ms. Oldham-Moore. Let me just say one thing. We're really 
over time now, so I know some of the panelists will stay after 
and talk to you if you have further questions.
    Leslie, please address the informal economy.
    Ms. Chang. Yes. I didn't specifically focus on workers in 
these other industries that you're talking about. I think in 
general, most of these workers live in a gray economy in the 
sense that, as the other panelists mentioned, a lot of laws are 
being violated and things are being done under the table and 
they're being paid less and treated less well than the law 
requires. So I think in terms of their own experiences, they're 
just trying to cope in whatever ways they can to try to get the 
most out of their employer, or to find a better position if 
that doesn't work. But in terms of protections for women 
working as nannies, or hairdressers, or karaoke girls, I don't 
know specifically what's being done.
    Ms. Perkins. Thank you. Erin?
    Ms. Ennis. I'll be very quick and say that I don't know 
that necessarily the Chinese companies are going to be praising 
U.S. companies for what they do on this front, but what our 
companies are doing is requesting and advocating that laws be 
enforced across the board, regardless of whether you're a 
domestic company or a foreign company, and that's labor, 
environmental, health, everything.
    And then also I think trying to drive home the point that 
the reason why there are labor, environmental, health, and 
safety standards isn't because the government wants to intrude 
upon what you're doing. It's because those things actually make 
you a better and more productive company.
    It means that you have a product that is produced that does 
not have as many problems, and it means that your workers are 
actually able to work better because they're not being 
overworked in one period of time, with nothing to do later on. 
The reason for all of those protections actually is that it 
protects workers, but it also means that companies do better 
business. So hopefully, at least by example, we are bringing 
something to the table on that.
    Mr. Grob. Well, I'd like to thank very much all of our 
panelists for this most illuminating discussion. Clearly, 
you've raised more questions than you've been able to answer, 
so that's a sign of a good program. I would urge you, please, 
all to stay on top of the postings on the CECC Web site: 
www.cecc.gov. We'll be following up on many of these issues.
    Thank you all again. [Applause].
    [Whereupon, at 11:35 a.m. the roundtable was adjourned.]
                            A P P E N D I X

=======================================================================

                           Prepared Statement

                              ----------                              

                Prepared Statement of Earl V. Brown, Jr.

                             june 19, 2009
                              introduction
    Thank you for inviting me to make this presentation.
    My name is Earl Brown, and I am a U.S. practicing labor and 
employment lawyer. I have worked on Chinese and South-East Asian labor 
and employment law issues for the AFL-CIO's Solidarity Center for ten 
years. Prior to my work in Asia, I represented U.S. industrial unions 
and individual workers in all sorts of labor and employment law 
matters. I worked for such unions as the United Mine Workers and the 
Teamsters.
    Because China is so vast and diverse, outsiders like me tend to 
look at China and see reflections of our own experience. The rapid pace 
of change--a phenomenal growth rate for the past ten years--and the 
diversity of and lack of transparency in China often defeat our earnest 
efforts at objectivity. What follows, therefore, is inevitably the 
perspective of one U.S. labor lawyer with practical legal experience 
advocating for industrial workers in both the United States and Asia. 
My views also derive from many years of work by colleagues in the 
American and international labor movements, and in the Solidarity 
Center, to promote autonomous trade unions and rule of law frameworks 
that protect workers' rights and interests in Asia. What follows is 
also accompanied by an awareness of the deterioration of worker rights 
enforcement in the West and that we are not always the model we would 
like to be, or represent ourselves to be.
    I, along with many others, view China as the most significant 
experiment in industrial relations in the global economy. Along with 
issues of the environment, the ``labor question'' in China is a 
paramount one for China's own development, for labor movements around 
the world and for the shape of any global economic recovery. This 
question of worker voice and power in the Chinese economy encapsulates 
all the broader governance questions China must address to achieve 
sustainable and balanced growth. U.S. trade unions and worker rights 
advocates, as well as many employers and policy makers, are acutely 
aware that developing viable industrial relations arrangements in China 
is necessary to sustaining Chinese and global economic progress. It is 
recognized that China (and other countries) cannot continue to rely on 
business models that depend upon evasion of labor standards and norms, 
and that leave working citizens without channels to effectively redress 
basic workplace injustices or sufficient purchasing power to afford a 
decent life for themselves and their families.
                           the current crisis
    The impact of the current global economic crisis on China's workers 
is not yet clear. There is little reliable data that would allow us to 
tell the story. By the time this current crisis manifested itself in 
China in 2009, China had already survived wrenching changes as it 
opened to the global economy and privatized much of its industrial 
economy. Millions of older state enterprise workers were laid off in 
the 1990s and first decade of this century, just as millions of younger 
peasant workers were drawn to the new private sector. In three short 
decades, China created a huge new private sector employing millions of 
workers. As the state owned enterprises shed workers and the new 
private sector industrial geared up, so did labor strife. In the 
industrial North East, laid off state workers demonstrated for 
subsidies to survive in old age. In the new industrial zones throughout 
China, factory and construction workers hit the streets and ringed 
government offices to get back wages from employers. The dislocations 
occasioned by this new economic crisis may appear to many in China as 
yet more of the same--wrenching and continuous changes that can be 
survived. Many Chinese view these dislocations against a backdrop of 
astounding economic growth and modernization.
    China's new private sector working class contains millions of young 
peasant workers migrating from rural areas to regimented work in the 
factories of China's export zones. This new class also includes 
millions of young skilled, hi-tech and service workers. As this century 
dawned, China's younger workers from both rural and urban settings 
began to harbor increasingly distinct notions of their rights as 
individuals and wage earners and became correspondingly assertive of 
those rights. Contestation for those rights at all levels--on the 
streets, in courts and in interactions with often militaristic 
supervisors--increased, as did rights awareness campaigns by lawyers, 
women's' groups, legal aid societies and NGOs.
    Young rural women, often only teenagers, waved labor regulations 
that had been faxed to them by legal aid or worker rights groups in the 
faces of supervisors demanding the full legal measure of wages. 
Desperate workers often hit the streets, tying up traffic. Sometimes, 
workers followed abusive supervisors to their homes and exacted private 
vengeance. Young workers began to quit employers that offended them, or 
failed to accommodate their needs for scheduling or promotions. Younger 
workers began to ``shop'' for employers. Higher skilled and semi-
professional workers also sought to bargain with employers and even, in 
the case of airline pilots, struck. As did dock workers and taxi 
drivers. The range of labor disputes expanded beyond recovering wages 
due but not paid, expanding to demands for 
improvements in wages, hours, working conditions and status and 
treatment. The intense level of labor strife in China required some 
responses by employers and government.
    To make the issue more pressing, campaigns by consumer, human 
rights and trade union groups in global export markets amplified and 
fueled labor controversy inside China. All this labor strife became a 
staple of both the Chinese and international media. In response, a 
significant number of employers in China, both foreign and domestic, 
and international brands, began programs of social work, relief and 
compliance with Chinese law.
    Yet, in all this furious activity, the entity charged with labor 
rights enforcement and giving voice to workers' demands and interests, 
the All China Federation of Trade Unions (ACFTU), seemed largely silent 
and absent in the lives of workers. Although politically influential at 
the top, the ACFTU has not represented or defended workers in their 
actual struggles with employers. At least in other industrializing 
countries, large-scale industrialization and the accompanying 
concentration of masses of industrial workers with grievances has 
pushed workers into trade unions. Programs of social work and legal 
compliance alone were not enough to meet the level of controversy 
generated by unremediated industrial grievances. In those situations, 
employers and government were compelled to recognize and bargain with 
autonomous worker voice expressed in trade unions. There is little 
reason to think that industrial China will prove to be an exception to 
the growth of worker voice and the emergence of bargaining.
    By the time the 2009 economic crisis became manifest, China had 
already launched a series of controversial labor law reforms that 
strengthened the hands of ordinary workers vis-a-vis employers. Those 
labor law reforms, enacted in 2008, did not go so far as to create a 
legal and industrial relations framework compliant with international 
labor law. Nonetheless, the 2008 reforms do lay the basis for enforcing 
some fundamental labor standards and have therefore evoked passionate 
employer opposition in a labor relations culture that already 
overwhelmingly favors the employer and is rife with employers who make 
labor law avoidance central to their business operation.
    In the 2008 labor law reforms, China sought to define the private 
sector ``employment'' relationship--what is an employer and what is an 
employee and what are their inescapable obligations and rights. This is 
the fundamental question in labor law, as most obligations and rights--
ranging from the ``employee's'' duty to safeguard the employer's 
intellectual property interests to the ``employer's'' duty to honor 
labor agreements when corporations are transferred--hinge on the 
definitions of these two words. The centrality of these definitions is 
confirmed by the great efforts expended by employers to structure 
industrial relations so that employers are not ``the employers'' but 
rather ``contractors'' or ``purchasers'' of naked assets and employees 
are not ``employees'' but ?``independent contractors,'' 
``subcontractors,'' ``interns,'' ``temps'' or other legal creatures 
with lesser rights in the workplace.
    The linchpin of the 2008 reforms is the Employee Contract Law. That 
law was drafted to remedy specific socially disruptive labor abuses 
such as wide-spread wage arrearages, manipulations of corporate forms 
to shed labor law obligations for wages and benefits, and devices to 
classify workers as temporary or contract workers in order to avoid 
affording them the full legal protections due employees. The Contract 
Law lays down, for the first time, basic, universal norms: all workers, 
be they peasant workers, ``temps,'' contract workers, apprentices or 
probationary employees, 
regardless of geographical location or industrial sector, are entitled 
to certain protections and possessed of certain rights. Thus, the 
Contract Law protects most private sector workers.\1\
---------------------------------------------------------------------------
    \1\ I am putting aside the application of this law to public 
employees and state-owned enterprise employees.
---------------------------------------------------------------------------
    The Contract Law also expresses an unambiguous command to judges, 
arbitrators, mediators and bureaucrats to resolutely enforce the 
employers' obligation to pay legal and contractually established wages 
in full and on time. This law further reflects a defined national 
policy favoring job security by erecting protections against arbitrary 
dismissal, by promoting long-term employment arrangements and by 
requiring due notice of and consultation about layoffs (retrenchments). 
The Law creates a clear right to severance pay for most workers with 
any seniority. The remaining 2008 legislative enactments seek to 
channel labor disputes into credible and efficient avenues for dispute 
resolution--against the backdrop of a judicial and administrative 
system that is a work in progress. Taken together, these reforms also 
define and expand the ACFTU's role in representing workers in 
interactions with employers over a broad range of issues.
    Some employers in China, in the region and in the West have made 
alarmist forecasts about the economic impact of these laws on business. 
At the same time, other employers and their lawyers have begun to 
stress the need for strict adherence to Peoples' Republic of China 
(PRC) labor laws and regulations, and forthrightly eschewed industrial 
relations policies founded on strategies of law avoidance and 
impunity.
    Whether this policy of strict adherence to legal norms succeeds in 
fostering compliance on a significant scale remains to be seen. Will a 
sufficiently large group of employers implement the advice of their 
lawyers or will they continue to be tempted by strategies of avoiding 
labor law obligations? The devolution of labor law obligations through 
chains of contracting remains a significant obstacle to compliance as 
well.
    Despite these questions, a significant group of employers and 
employer-side labor lawyers have recognized what many Chinese policy 
makers and worker rights advocates also understand: that labor law 
violations cannot continue as the order of the day. Many foreign 
investors and brands could not sustain the level of controversy sparked 
by production and business models premised on evasion of fundamental 
labor standards and norms. These forces, against the backdrop of labor 
strife, combined to propel the legal reforms described above that 
stiffened basic labor rights, charged the union with discrete and 
important functions in protecting workers rights and interests and 
provided avenues for redress of industrial grievances. Authoritative 
voices in the Western and Chinese employer bar, the set of lawyers 
advising employers operating in China, have now firmly counseled strict 
compliance with Chinese labor law as essential to sound business 
operation.
    Predictably, the 2009 crisis has prompted some employers and policy 
makers to call for suspension or outright repeal of the prior year's 
reforms. Just as the initiation of labor law reforms in 2008 sparked a 
broad and open debate in China, and followed years of contention about 
the role of workers in China's new society, the 2009 economic crisis 
has set a new stage for rehearsals of the ``labor question.'' The signs 
appear to augur for a ``Singapore'' solution. During downturns in 
Singapore, there is a public ritual of sacrifice--ministers, among the 
most highly paid in the world, cut their salaries, managers do also, 
and government directed union announces corresponding cuts and 
reductions in hours. Even furloughs. The objective is to freeze or roll 
back wages while preserving jobs until the crisis passes. The Chinese 
often cite this Singapore model and there seems to be a temporizing 
truce now in China that entails avoiding mass layoffs in favor of wage 
and hour reductions and preservation of jobs, but no outright repeal of 
the 2008 reforms. However, it is clear that the economic crisis had 
caused export and related employers to shed millions of jobs by early 
2009.
    Lawyers representing multi-national employers in China report that 
this picture is varied and localized--in some regions with more active 
official union presence or in sectors where employers seek to avoid 
employee turnover, these ``Singapore'' bargains are negotiated with the 
tools provided the union by the 2008 laws. Workers are furloughed or 
work light hours rather than being laid off. In other areas, local 
employers and their allies in the official union ignore the 2008 laws. 
Some local officials have gone a long way in assuring employers and 
investors that laws, criminal or civil, should not trouble them. For 
example, lawyers working with Chinese counterparts on securities and 
corporate regulations report that Chinese regulators have assured 
certain investors that they need not be concerned about enforcement 
actions or prosecutions in any area of regulation ranging from the 
environment to securities law, and of course, including labor.
    There is also the question of the millions of peasant workers who 
went home last January during the Chinese New Year holiday and have 
stayed home. Will the countryside absorb them? Will these be the only 
peasant workers in world history to return to the farm and stay there 
while young? And what about the millions of young Chinese graduates 
leaving school this year for this job market? They are smart, educated 
and have marked ambitions about how to live their lives. Will they 
access jobs and salaries commensurate with their expectations? These 
questions, however, should not cause an underestimation of the 
demonstrated capacity to endure massive economic dislocation in China, 
or of the agility of the governing party. China in the past thirty 
years has faced and survived massive economic upheavals.
    To my mind, the current crisis presents a more intense version of 
the long standing internal debate about industrial relations and the 
power of workers in China. While there are voices calling for repeal of 
the 2008 reforms, there are other voices inside China that recognize 
that workers need rights, voice and enhanced worker purchasing power if 
socially sustainable development is to occur. That these voices inside 
exist is demonstrated by the 2008 reforms, and the enhanced space for 
worker rights and collective bargaining opened by those reforms. The 
question for us is how to engage those Chinese actors inside China 
calling for worker rights in a spirit of equality, deference to their 
agency and with mutual respect.
  a focus on internal chinese private sector industrial relations and 
                        worker rights frameworks
    Ascertaining how China will deal with the current crisis and its 
impact on workers requires an assessment of the state of worker rights 
enforcement and the capacity of China's own institutions to provide 
worker voice. China's industrial development has progressed to the 
stage where private-sector industrial relations expertise is required.
    Given the level of labor strife in China, even the Chinese 
government recognizes that there is a need is for private sector 
institutions to express worker power in the market economy so that 
peaceful and credible solutions can be negotiated directly by workers 
and employers rather then on the streets. This means that external 
worker and human rights advocacy and other external programs should now 
be supplemented by focused and practical industrial relations capacity 
building in the private sector. Part of this focus should be on how the 
ACFTU can adapt to the 
demands of representing workers vis-a-vis employers in the private 
sector.
    This industrial relations phase of China's development is a stage 
beyond discrete and localized legal aid experiments, the often sporadic 
support for labor rights NGOs, concocting better human resource systems 
or dissemination of media reports about labor abuses. Rather, China 
must now seriously contemplate industrial relations: the continuous 
negotiation of industrial and labor grievances in the private sector 
through autonomous and durable Chinese institutions capable of 
representing workers and employers in a balanced fashion.\2\ The 
current crisis just makes this long-time need more acute, and this is 
no time for going backwards. Otherwise, a period of aggravated 
disruption and strife may be the result of a retreat as workers seek 
redress.
---------------------------------------------------------------------------
    \2\ In this respect, I do not mean to advocate for the notion 
sometimes ascribed to U.S. industrial relations proponents that labor 
relations must be conflictual and wholly severed from the state. The 
state is always central to this bargaining, because without legal 
pressure and appropriate state policy, employers will not bargain with 
workers.
---------------------------------------------------------------------------
    We do have reservoirs of unique expertise in the U.S. labor 
movement and industrial relations institutions in the unionized sector 
that can be of significant utility in today's China. In the pre-New 
Deal United States, we experienced labor strife and violence as intense 
as any in present day China. A long debate over the role of workers, 
their unions and the state in our society resulted in a framework for 
negotiation of labor disputes and the creation of an industrial 
relations system that held sway for a long period.\3\
---------------------------------------------------------------------------
    \3\ William E. Forbath, Law and the Shaping of the American Labor 
Movement, Harvard University Press, 1989, p. 10-36.
---------------------------------------------------------------------------
    This system created a rich experience in plant, enterprise and 
sectoral dispute resolution that, despite limitations, enhanced the 
wages and purchasing power of 
industrial workers and was consistently capable of solving industrial 
problems peacefully. While we surely cannot plant the American flag in 
Chinese industrial relations, and should therefore never want to, this 
history has left us with expertise and skills which can be of use to 
Chinese worker rights actors in the current debate over the role of 
workers and the union in China in this crisis and thereafter.
                       how trade unions can help
Unions and Labor and Social Bargaining
    China's work force is not monochromatic. It includes millions of 
``unskilled'' industrial workers; many are internal migrants of 
marginal legal status and limited 
access to schools, health care and housing. It also includes millions 
of high-tech workers and knowledge workers, service employees, workers 
in supply chains for foreign brands, and state enterprise workers and 
civil servants. Labor relations at U.S., Australian and E.U. companies 
are distinctly different from labor relations in Japanese companies, 
which in turn are different from labor relations in overseas Chinese 
and Korean companies. Many Chinese workers are under the age of 30, and 
have distinctive attitudes toward work and their rights at work and in 
society.
    Each of these segments confronts different problems; in the private 
sector, however, too many workers do not have an accessible union to 
represent them. China has a web of official union institutions that 
parallel the state structure. The official union, ACFTU has not yet 
attained a wide presence in the private sector.
    However, the 2008 law reforms afford this union a huge role in 
labor relations. Not only does the union have an important advisory and 
gatekeeper role in formulating labor law and regulations, it also has 
an invigorated mandate to collectively bargain for workers, including 
migrant workers. Curiously, the 2008 labor law reforms cover most 
workers within the boundaries of formal employment. This is in contrast 
to a global tendency to create exceptions to laws governing formal 
employment of such sweep that they undermine labor law and support the 
creation of a precarious and vulnerable work force without rights and 
collective voice. The ACFTU is now specifically charged with insuring 
the rights of all workers covered by the law. But the law has not 
created an institutional stage for this larger, encompassing role. 
China is also staging Hamlet without the Prince of Denmark, because it 
has not yet developed the necessary autonomous worker institutions at 
the grass roots to implement collective bargaining.
    At the same time, China has experienced a significant growth of 
worker advocacy institutions and voices outside the union, in NGO 
worker centers, in GONGOs,\4\ in legal aid societies, in universities 
and in government regulatory agencies. These articulate voices for 
worker rights often provide a welcome contrast to quiescence in the 
official union, and may spur to the union to assume a more active role 
in worker representation and labor rights enforcement. Assuming a more 
active representational role in labor relations, however, will cause 
the official union to change profoundly. At a minimum, it will need to 
establish a grass roots presence; it must 
consult with and secure the allegiance of members; it must have a 
research department and it must organize employers under agreements in 
relevant labor markets, sometimes from the bottom up rather than from 
the top down.
---------------------------------------------------------------------------
    \4\ Governmentally authorized, funded and supervised ``NGOs.''
---------------------------------------------------------------------------
    The importance of this new role for the union in this downturn is 
clear. The union has invoked Article 41 of the 2008 Employee Contract 
Law to require prior notice to it by the employer of all layoffs 
without exception. The union is further using the extensive notice and 
consultation provisions of Article 41 (governing mass layoffs of 20 
employees or over) to forestall and to initiate bargaining over layoffs 
in this downturn.
    Article 41 requires extensive consultation with the union and 
workers prior to any ``mass lay-off,'' and protects certain older and 
ill employees from layoff altogether. Via this Article, the union in 
some places is forcing employers to bargain toward a Singapore 
solution--reduced hours and/ or furloughs instead of unilateral mass 
dismissals. Although this economic environment has forced many a 
Hobson's choice, the law here does force the employer to bargain with 
the union and workers before initiating terminations. The employer 
cannot act unilaterally. Bargaining and labor negotiation is thus 
occurring prior to the creation of viable local unions and other 
similar industrial relations institutions. We cannot foreclose the 
possibility that the law will force the union into a more active 
representational role.
    Our labor movement can assist in enhancing the capacity of 
interested officers and staff of the ACFTU union and other worker 
rights advocacy groups to begin to step into the industrial relations 
roles assigned unions and workers by the 2008 laws:

         We can provide expertise on structuring unions 
        internally to equip them for the functions of organizing, 
        bargaining, and rights advocacy;
         We can provide expertise and collaboration on 
        occupational health and safety (OSH) technical issues, and on 
        establishing worker capacity to enforce fundamental 
        occupational health and safety norms via worker committees;
         We can share models on how to represent public sector 
        employees;
         We can help enhance the capacity of activists to 
        provide legal and other assistance to injured workers and their 
        families, and the families of deceased workers;
         We can provide expertise on researching labor markets 
        and employers;
         We can provide training in bargaining;
         We can provide training in organizing;
         We can provide models for broad rights advocacy;
         We have expertise in the distinct field of 
        representing high-skilled technical workers and younger works 
        in service industries and working as contractors.

    Labor movements in the United States and elsewhere are uniquely 
equipped to provide such assistance as they possess the specific and 
time tested bargaining and organizing expertise that academics, 
development firms and NGOs often lack. Mobilizing this experience 
during this crisis to assist internal actors advocating for worker 
rights in the Peoples' Republic of China will enable us to participate 
in addressing, in a targeted way, the universal problems of the global 
economy--lack of stable employment, competition based on labor law 
avoidance and lack of worker voice and purchasing power--as well as 
assist our Chinese counterparts in addressing those very problems in 
China.
    China also needs a labor movement that is also capable of acting 
outside the formal employment relationship to advocate for and to 
represent marginalized informal sector workers. The U.S. labor movement 
has made some strides in giving voice to informal and marginalized wage 
earners by establishing worker centers and networks of advocates and 
service providers that operate outside traditional craft and other 
formal union categories. Interaction between U.S. and Chinese advocates 
for marginalized workers would be helpful to both sides. In this 
respect, the Solidarity Center has brought Chinese union lawyers and 
labor rights activists to U.S. worker rights centers and initiated a 
dialogue which we hope will continue on how to provide voice to and 
enforce law on behalf of marginalized workers.
    We should understand that E.U. and Japanese models of industrial 
relations are also relevant, and that we are not internal actors in 
China. Nonetheless, Chinese discourse about industrial relations has 
reached the stage where concrete private sector trade union expertise 
and skills are needed to assist in building capacity in Chinese labor 
institutions of all kinds--in the formal union, in worker centers, 
NGOs, and in legal aid institutions. This crisis has established that 
economics premised on the race to the bottom--on relentlessly 
depressing labor costs and living standards--is not sustainable. One 
answer to this imbalanced global economy is an invigorated Chinese 
labor movement. We should seek a role in reversing the race to the 
bottom with the aid of invigorated labor movements in China, both for 
the sake of U.S. workers and Chinese workers. This necessarily entails 
working appropriately with counterparts in China.
        labor, lawyers and the rule of law, even in crisis times
    The labor issue in China is also at the heart of a broad debate 
about human rights and the rule of law. Until 2008, many employers in 
China simply discounted labor law compliance. Other employers under 
imperatives to comply strictly with PRC law, such as foreign employers 
with their own legal requirements to comply with Chinese law, or those 
subject to consumer pressure, were constantly undermined competitively 
by employers who violated Chinese labor norms. This fueled a larger 
problem: a culture of impunity with regards to compliance with the law. 
While aspects of labor and employment law, such as the technicalities 
regarding workers' compensation and work place health and safety may 
seem arcane, they are critical in China, where industrial death, 
disease and injury remain at high levels. Unregulated labor competition 
means that workers are maimed and slaughtered to save on labor costs. 
Insuring that effective OSH and worker compensation laws and 
regulations are in place and enforced is central to a rule of law 
culture in China as elsewhere.
    U.S. union lawyers and activists can assist Chinese counterparts in 
union, NGO and legal aid society staffs with concrete and particular 
practice-based advice on infusing rule of law norms into workers' 
compensation structures, into regulation of work hazards in dangerous 
industries such as mining, and into providing for social security and 
protection within the framework of a private economy.
    Further, U.S. union lawyers and their colleagues can engage in a 
continuous dialogue on Chinese labor law compliance with U.S. and other 
international lawyers who represent multinationals in China. The 
Solidarity Center has initiated just such a dialogue through 
participation in relevant ABA committees and finds that foreign lawyers 
representing employers in China have openly committed to advising 
compliance with PRC labor law and regulations. This is a major step--in 
which 
responsible employers and responsible employer counsel play an 
indispensable role--toward pushing back the culture of noncompliance 
and impunity in labor law. Foreign employers have thus often become a 
force for labor law compliance. Of course, there are many 
countervailing examples of foreign employers violating basic labor 
norms.
    As noted above, younger and more highly skilled workers in China 
seem to part of the growth of regional ``civil'' rights movement among 
younger workers in East and South East Asia. This movement arises from 
expectations about autonomy and individual choice that are becoming 
widespread among all younger workers, and among more skilled workers 
like IT workers and airline pilots. Many elements of the 2008 labor law 
reforms address the needs of young and more skilled workers, and they 
have been used by those workers, both spontaneously and with assistance 
of union and legal aid staff. Union lawyers and staff in the U.S. 
movement have attained considerable expertise in representing and 
reaching out to such workers and can be of assistance.
    There is a widely acknowledged problem in China with enforcement of 
judgments. In this respect, U.S. trade union lawyers can assist Chinese 
counterparts on the staff of unions, legal aid societies and NGOs to 
enforce wage and worker compensation judgments. In enforcing judgments, 
workers' lawyers may find allies in the business community who also 
encounter this very problem.
    The need to include the labor movement in the core of rule of law 
dialogue has become even more acute given the massive increases in 
international and internal migration of workers in the past decade. 
These migrant peasant-workers are invariable legally disenfranchised 
and cut off from the most basic rule of law institutions. The 
international labor movement and its allies realize that the rule of 
law cannot co-exist with huge populations of marginalized and abused 
migrant workers cut of from justice institutions and any means of 
redressing fundamental deprivations of human and worker rights. The 
U.S. and international trade union movements can play, by virtue of 
their institutional networks, a broad role in providing forums and 
assistance to Chinese worker rights advocates regarding enforcement of 
rights across national boundaries, against foreign employers, or in 
enforcing the rights of the ever increasing number of Chinese guest 
workers abroad. No other institution can match the capacity of the 
international labor movement to reach across the globe and down into 
societies through affiliates.
                               conclusion
    We should assist Chinese worker rights advocates in unions, law 
faculties, NGOs and legal aid societies to take up the invitation 
presented by 2008 labor law reforms to implement the mandate for 
collective bargaining. In doing so we will be contributing in a modest 
way to solutions for Chinese workers and workers everywhere in this 
global crisis sparked by a race to the bottom that has gone too low.
    Our assistance should be delivered with deference to the agency of 
our Chinese colleagues, and with complete awareness that only the 
Chinese will determine the contours of their labor relations system. 
Since this global crisis has exposed ``Western'' and Asian workers, and 
workers everywhere, to the dire effects of the unregulated race to the 
bottom, we can contribute to overcoming the crisis by technical 
assistance in the area of industrial relations and collective 
bargaining.

                                 
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