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David Wertime

The Grim Reaper Has His Eyes on Foxconn

The narrative behind some of the world’s most coveted consumer electronics has turned even grimmer. On January 2, over 150 workers in the city of Wuhan, Hubei province, threatened to jump en masse from a factory roof, alleging that the manufacturer reneged on promised pay. It took the intermediation of the city mayor, backed by a phalanx of fire trucks and emergency cranes, to talk the workers down the next evening.

The strikers worked for Foxconn, the largest contract electronics manufacturer in the world, which churns out iPhones, Xboxes and Kindles. Foxconn is no stranger to controversy. A string of fourteen suicides at the company’s Chinese factories in 2010 made many question the hidden cost of their iPhones.

Word of the threatened mass suicide–and the concomitant threat of temporary halt to production of Microsoft’s video game console Xbox 360, which the Wuhan facility manufactures–quickly ricocheted through China’s blogosphere.

The majority of commenters on Sina Weibo, China’s Twitter, looked past the workers entirely, some to beyond China’s borders. They condemned “foreigners” for “taking Chinese people’s money” and “pressing our people into a cheap labor force.” By “foreigner,” some netizens surely meant the Taiwanese owners of Foxconn. One called for an outright boycott on Taiwanese firms.

But given that the showdown occurred at a company making electronics for the global market, most anti-foreigner rhetoric appeared to lack a discrete target. While foreigners say currency manipulation gives China an unfair trade advantage, many Chinese also complain about the RMB’s weakness. Using the Chinese shorthand for government, “ZF,” to avoid detection, one commenter wrote, “It’s as if ZF sees all of Chinese soil as one big processing plant to make finished goods on the cheap, then buys back its own cheap goods as expensive imports.”

Perhaps the most vocal group of commenters felt their government has failed adequately to protect China’s workers. The lack of a strong social welfare system gives employers huge leverage, which is seldom counterbalanced by serious workplace regulation. One netizen wondered aloud, “If 1.3 billion Chinese were to jump [to their deaths] at Tiananmen Square, would that cause any change?” Another lamented, “[Even] suicide jumpers need to organize into a group before the mayor pays attention…the system needs fixing.” Some wondered why labor unions were not “out there fighting for everyone,” although most Chinese know unions are de facto extensions of the Communist Party and thus more “decorative” than real.

While few will dispute that China’s labor protections are thin gruel, that has been true for decades. The immediate driver behind increasing worker dissatisfaction is rising prices, which puts upward pressure on wages and, ultimately, imperils China’s role as “factory to the world.” One commenter wrote, “Prices, GDP and worker pay are not increasing at the same clip,” sowing a sense, palpable online, that some average Chinese feel their quality of life declining despite their nation’s growing wealth.

The rising price of labor threatens the old way of doing business. One microblogger who claimed to work for Foxconn wrote that “profits in the industry are slim; it hasn’t been easy for Foxconn to persist as long as it has.” Another added, “Many companies that continue to use the old methods of paying low wages and cheating their workers are already finding survival difficult.” If, as one commenter argued, “The honeymoon period for foreign enterprises [in China] is over,” then companies looking to compete on price may have to start training their sights elsewhere. One netizen had advice for Foxconn CEO Terry Guo, generally reviled in the blogosphere: “Old Guo, hurry and move [the factory] to Vietnam!”

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David Wertime

David is the co-founder and co-editor of Tea Leaf Nation. He first encountered China as a Peace Corps Volunteer in 2001 and has lived and worked in Fuling, Chongqing, Beijing, and Hong Kong. He is a ChinaFile fellow at the Asia Society and an associate fellow at the Truman National Security Project.