MyWage.cn

Whenever somebody comes with national figures on wage developments in China, it gets at least my interest. As you might know I'm working on the China-leg of the Wage Indicator, a global system of measuring wages. For China it even makes more sense to set up that system, since nobody has a clue what is happening in the country. So, when Xinhua reports that salaries went up 12.6 (not 12.5!) percent over the past five years, why do they claim this? It is because the five-year plan over the past five years has concluded ant the Ministry of Labor and Social Security is obliged to report whether they have met their targets. There is not a clear relations with the reality. Xinhua:

During this period, a salary distribution system based on collective consultation has been formed, the official said, "over 400,000 companies have established the distribution system."

Any clue what this means? I do not and most likely nobody does. No clue what the 'distribution system' might entail. Only one thing is clear:

"In the 11th Five-Year Program period (2006 to 2010), China will push forward reform of distribution system and base the system on collective consultation as the main form," the official said.

Damned. Very glad to hear that.

The China Digital Times points at this picture from Hainan Province where migrant workers are being roughed up when they ask for their wages. In de weeks before Springfestival many migrants return home for celebration and are expected to bring presents and money for their relatives. Chinese media routinely issue warnings against not paying workers.

Business Week has a thorough features on the fast-emerging business schools in China, using a survey under what they describe 1,000 b-students on the 16 top b-scho0ls. No clue really what would constitute a 'top business school' in China; I thought that would be limited to maybe half a dozen.
They illustrate how Chinese b-schools attract more students, while especially US business school see falling numbers of students.
What they have missed, I feel, is the financial condrum Chinese b-school graduates are in. Over the past decade many Chinese went abroad for their MBA-study, but compared to international standards, salaries for Chinese graduates in China are still rather low, compared to similar function in the US or Europe.
So, only Chinese graduates who cannot get a job on an international level return to China and prospective students increasingly decided that going abroad for their MBA might not be worth the effort. B-schools in China might be an alternative, but admittedly on a lower level, especially financially. In that way low wages are also an issue in managerial functions.

books on business schools

the year of the dog in 2006

Chinese born in the year of the dog are already becoming victim of the idea they will have bad luck during the upcoming Chinese year of the dog, reports Reuters. Important decisions by individuals in China are increasingly made with an eye on the predictions according to the Chinese zodiac. Getting married or getting children was very much dependent on the sign of the year, but now also job interview are now a basis for discrimination in the labor market. On Chinese astrology

A different kind of action from international trade unions suddenly appeared on my radar. The largest Dutch trade union FNV takes on one of the largest battery makers in the world, GP Batteries, who is being accused of poisoning their Chinese employees with cadmium.
New, since mostly the international trade union seldom takes on this kind of cases in China, but fly their automatic pilot in calling for a boycot of China as long as they do not have free trade unions. As noble as useless, I feel.
This seems a good, solid case of international companies ignoring health risk for Chinese workers and - as we know - there is still much to gain here.
The story still lacks much needed details, but that might change in the coming months.

The plan by the National People's Conference, here explained by Reuters, to extend the current experiment in abolishing the agricultural taxes to the whole country by the beginning of 2006 might well trigger off a range of changes.
While in terms of money the tax only is good for 1.5 billion Renminbi last year, the effects might be wide-ranging. Money-collecting local government officials have been responsible for much of the rural unrest. They might not give up their priviledges that easy and could at least ask for a compensation from the central government in exchange for their compliance with the abolishment. According to Reuters, already 28 out of 31 provinces have officially abolished the agricultural taxes.

...the tax, introduced in 1958, has long been criticized by farmers and agricultural experts as an unfair burden, because farmers must pay it regardless of how little income they earn or even whether they plant crops.

As an effect of this and other measures, income at the country side will be rising, putting an aditional strain on industrial zones in southern China like Guangdong, as the wages factories offer to migrant workers might not be enough to appeal to the work force, as it used to do in the past.

On China's taxes

Every day, when times allows, I scan hundreds of entries of different media and search engines to get a fast overview of the subjects I'm working on.
One of those subjects is the combination of China and wages, since at Chinabiz we hope to launch in 2006 the China-section of the global wage indicator. So, when today the communist news paper the People's Daily produced a headline telling the 'unionists' were worried about low wages, I thought my search engine had made a mistake and picked up an article about Northern Ireland, where 'Unionists' is another word for the protestant community.
China does have a trade union, but only one and if they do anything, they organize an annual outing for the employees. The Chinese trade union being worried about something like low wages seemed very odd, to put it midly.
But when I had a closer look at the whole article, I saw that the Chinese media had provided me with my weekly surprise: the Chinese trade unions were indeed worried about low wages. In the past few months the national economic survey, held at the end of last year and bit by bit released, had already captured the headlines before. Last week China changed its official GDP upwards with 17 percent as a consequence of that survey.
Before that Chinese media had already prepared us for a doubling of the official number of urban employees. While wages in China would have been part of that survey, I had not seen any references to that yet. Until today.
The results are not that surprising: migrant workers tend to earn pretty little, even in the prosperous Guangdong province an average of 700 Renminbi per month (USD 85) is noted, if they get paid at all. Income went only up marginally in the past years, at best to comply with the very low minimum wages. Workers in state-owned companies get about double that salary. A senior trade union official called Dong gave a rare interview about this situation:

Citing that China's economy has achieved annual average growth of 9.4 per cent in the past 27 years, Dong said the slow rate in pay increase means that workers are losing out in the chance to benefit from the country's development.

And:

Wang Zhaoguo, chairman of the federation, said 1.17 million grass-roots trade unions will be organized to bring workers and the management together to negotiate a possible increase in wages. Those are

strange sounds, and most likely only propaganda. But there is certainly domestic political pressure on the official Chinese trade union to do what they are paid for: protest the interests of workers. Very interesting.

Slaves at the Lugu brick factory, near Huixian city, Henan province

There is a lot of discussion on labor conditions and wages in China, but there is always a bottom end that seems to be worse. Asiapundit points at this report by our anonymous journalist blogger, and seems rather trustworthy:

This is one of the unblievable and outrageous things you’ve ever heard. In Lugu village brick factory,Mengzhuang district,Huixian city, Henan Province of China(河南省辉县市孟庄镇路固村大砖窑),some workers from rural Hubei province were cheated and became slaves! They are forced to work 15 hours per day without any wage. Any attempt to escape from this living hell will cause cruel crack-down by the boss and his staff. A reporter whose name is Zhu Ruifeng(朱瑞峰 Mobilephone number and e-mail made public by himself:13938464000 Email:zrf@fyfz.cn),interviewed Shen Zhenhai,a slave worker there and called the local police, but no effect happened. Now the interviewee,Shen Zhenhai has disappeared!

Just now I made a call to Mr.Zhu and he said everything he wrote and photographed are definately true. Anything you could help to redeem the poor workes will be highly appreciated!

Books on slavery

Silicosis in Guangdong's jewelry industry 

Tens of thousands Chinese workers die every year from an occupational sickness that should have been part of history: solicosis, mainly caused by dust in coal mines and jewelry workplaces, writes the China Labour Bulletin in a report in month (that was earlier available in Chinese). This incurable, but avoidable disease has been the center of much occupation litigation in developed countries, causing a sharp reduction in the number of casulaties in those countries. The report by the China Labour Bulletin focuses on the jewelry industry in Guangdong province, over the border with Hong Kong and interviewed 4,500 workers, 137 of whom had the disese. For good reason, since the benefits of this labor cross the border to Hong Kong. Getting compensation of even medical health after contracting the disease is very troublesome for the workers who contracted the disease. The studies concentrates on seven companiese using Guangdong labor to work in their jewelry industry. Unlike many rather superficial reports about labor condition this is very well documented, timely and could be used as a practical instrument for litigation. In a previous life I have been writing much about occupational diseases in Europe and have been following much of the US litigation against responsible companies. There is a lot to gain here.
Information on silicosis

"...during a long time ahead, irregular migration of Chinese will be continued as an endless stream," concludes James K. Chin, of the centre of Asian Studies at the University of Hong Kong in his paper on snakes and snakeheads in China, the victims and organizers of the illegal migration to the EU and North America.
The research is based on seven years of field world. Have only skimmed through it, but looks a usefull contribution to the discussion on international labor. Later more.

In a largely unnoticed report on the developments in the textile industry, Stitched Up, the international organization of trade union ICFTU addresses the rising competition from China and its effect on the rest of the world. Main argument: it is not fair. One of the reasons for the report is the upcoming WTO-meeting in Hong Kong. The International Confederation of Free Trade Unions (ICFTU) cooperated with the major association of textile employers to compose the report, that repeats the problems the end of the textile quota have mainly caused for other developing countries, who cannot compete with the Chinese prices that are 10 to 50 percent lower on average. The report largely blames poorer labor conditions and compensation - compared to other low-cost countries - for the lower prices, but fails to come with a convincing proof. The ICFTU has all but ignored China since 1989 and mainly calls upon the larger brands to only deal with companies who have decent labor conditions. The report fails to address fast changing realities in China and offers no alternatives over the obligatory calls for free trade unions. While real trade unions are still banned in China, non-governmental organizations have increased activities over de past years. On a macro-level the new Chinese government is addressing the low wages at the country side and pushes towards improvements that would have been unthinkable in the 1990s and the beginning of the 21th century. Books on textile

Bills Due points me at this very nice article in the New York Times that describes a clandestine operation in Fuzhou, where the World of Warcraft and Magic Land have triggered off a new gold rush. Young Chinese play here in 12-hour shift to replace their more affluent colleagues in other parts of the world to keep the game going.

"For 12 hours a day, 7 days a week, my colleagues and I are killing monsters," said a 23-year-old gamer who works here in this makeshift factory and goes by the online code name Wandering. "I make about $250 a month, which is pretty good compared with the other jobs I've had. And I can play games all day."

It seems more fun, but the conditions are not that different from textile factories. Buy here games

Newsweek is praising China's approach to migration and castigats stagnant economies like Europe and Japanwho try to keep migrant work away.

By freeing its proletariat to move about the country, China has created a dynamic labor market that is closer in character to America's flexible work force than to the static societies of Europe or Japan... A recent report on global employment by the Organization for Economic Cooperation and Development devotes an entire chapter to worker mobility and its potentially salutary impact on joblessness and income disparity.

Books on migration

(later also at Chinabiz and the China Herald

This month it is four years ago China entered the WTO, at the time a clear sign the country was prepared to enter a fast globalizing world market following international standards. The accession was part of a huge push by the Chinese government to sell the WTO to its own citizens, as it was obvious that it would be a hard sell. At the time the Chinese media pushed the WTO in a classic campaign-style to its audiences.

Four years later, while its foreign trade partners are mildly positive about China’s commitment in opening up its markets, the lack of official enthusiasm compared to its accession four years ago is a worrying sign. 

Partly the lack of enthusiasm for the WTO has political reasons. Since December 2001 a new government has taken over. The WTO was a pet-project for the former Prime Minister Zhu Rongji and the new government has changed priorities on many fields, including the WTO.

Who now looks at the Chinese media, might find it hard to notice the WTO at all. The environmental crisis, AIDS, bird flu: No shortage of problems in China and as the media work as a mirror of the official political agenda the lack of enthusiasm is clear.

Later this month the WTO will have its first meeting on Chinese soil, in Hong Kong, and even that event still has to hit the domestic media in a grand way, like you would expect for a major international event.

While the assessments of foreign trade partners about China’s way to deal with its membership of the WTO is largely positive, there are good reasons for China itself to be less enthusiastic about especially its trade partners in Europe and the US. The haphazard re-introduction of quota on textile and the way both trade partners blackmailed China into accepting those restriction has been no encouragement for official enthusiasm for the WTO and certainly the industries involved have been very upset about this wave of protectionism that has been hitting Chinese industry.

In total, China and its citizens have still won greatly from the globalization on trade, despite all the negative fallout. China has lifted the majority of its people from poverty in the past twenty years, although there is still much room for improvement and it has come at the expense of many other developing countries in the world. 

That lack of official enthusiasm for the WTO and disgust about the protectionism of its European and American trade partners could easily have a more negative effect. Now Chinese companies simply rely to smart ways to avoid quota and other restrictions. When the lack of empathy of Europe en the US continues, the Chinese government might be less committed to stick to its part of the WTO-deal.

Dr. Irv Beiman of E-Gate consulting wrote this week an interesting column for Chinabiz about how some of the Chinese companies are very able to attract, train and retain a growing number of qualitied middle management. I called him for a podcast, but that failed because of technical problems. A few elements of our conversation I do think are useful for a larger audience.
Compared to ten years ago, China now has a very decent middle management, Beiman says. While larger foreign companies complain about the problems they have in finding and keeping experienced middle-managers, a decent group of Chinese companies do not have that problem and have developed their own middle management.
They do not spend much money on training those people, but make them familiar with the production processes in their company through on-the-job training, rather than formal training. Foreign companies have often their technical operation very well organized but fail to get people involved in strategic management, both foreign managers and their Chinese managers.
Foreign companies also often rely on the relative smaller group of experienced Chinese managers who speak enough English to communicate with foreign management, a problem Chinese companies do not have.
Those Chinese middle managers are very loyal, even though they might earn more in foreign companies, and feel proud to be part of those successful Chinese enterprises. Since they do not speak English, they have fewer opportunities with foreign companies. Those multinational enterprises rely on the relative smaller group of job-hopping middle managers, who are often eager to earn more and feel less loyalty to their own firm.
Next time, I do hope the podcasting goes better.

Job hunters in Chongqing 

Just like in any country, the number of unemployed is a politically charged one in China. Last month I already pointed at an upcoming change in counting the urban unemployed. An expected spike in urban unemployed, here reported by the China Daily, to 17 million is still nothing compared to the 150 million unemployed at the country side, but who expects politics to be logic? The article in the China Daily reveals a heavy infighting between different departments on who gets the honor of bringing the bad news. The headline says, the urban unemploymency "might' reach a record height, does not say it is certain. The Ministry of Labour and Social Security rather uses the 11th Five Year Plan as their benchmark, which is politically always safer although not more true. Also our partners at the China Wage Indicator (both research institutes of the same ministry and the Chinese Academy of Social Science) just hope that our future data-set do not challenge any official number on the unemploymency. Well, that is not going to be the case, since our data focus on relatively micro-data, but their fear is telling.

I'm still working my way through the excellent report by Guo Liang on the internet users in China. There is one major difference I saw with earlier data, for example by the 6-monthly CNNIC-reports. Those data, based on information by individual users, shows that most Chinese occupants of cyberspace are each time younger and partly for that reason without the means to purchase online - even if they wanted to.
Guo Liang sees increased internet use as the income goes up, perhaps he uses households as a sampling method. Because mostly children go online, who are poor as an individual, they might be more wealthy when you look at them as a part of a household. Also in Guo's research internet users do not buy online, but more because they do not trust the way of buying online, not because they do not have the means.
Both methods are of course valid, you can use both individuals or households as the basis for your research. But when the results are that different, it is still be bit confusing.

The Standard reports that Hong Kong has agreed to get 5,000 mainland textile workers, on the condition they will get minimum wages. That does not seem to be a practise in this industry.
It is a bit going against the tide, since manufactering moved north of the border for wage reasons. For a long time, crossing the border was for mainland Chinese harder than jumping over the Berlin Wall. Reversing the economic trend seems a tough thing to do, I feel.

The average pay packages in China is double of that in India, reports the website Management Consulting, based on a report of Mercer Human Resource Consulting. Mercer compared 42 positions. The differences tend to increase as the jobs go up in the hierarchy.
HR managers earn an average of USD 28,800 in China, compared to USD 13,700 in India.

Mark Sullivan, worldwide partner at Mercer, said: 'While it is far cheaper to employ staff in both China and India than Europe or the US, India appears to have the advantage of slightly lower wage costs.

'Although wage costs are lower in India, there is a high demand for skilled workers there, particularly at the executive level. If demand continues to outweigh supply then we can expect wages to increase substantially over the next few years.'

'The challenge for employers is to make sure they retain their top staff and equip lower-level employees with the necessary skills to move up the organisation', Sullivan added.

Update: The Globe and Mail has more.

Steve Gross, the Mercer partner who heads its reward strategy consulting, agrees that the 248 Indian firms and 415 Chinese firms in the survey tend to be large in size and multinational organizations. "Small domestic firms do not complete surveys."

He said that while there may be differences in the absolute level of salaries inside each country, Mercer's conclusion that average Chinese wages far exceed those of India remains valid.

In the first half of coming week I will be attending a EU conference in Brussels on science and communication, the CER 2005. I have been checking their website and while they have really interesting subjects on the way how communication change, I fear connectivity might be a problem. They mention 24 terminals for the over 2,500 participants and nothing is mentioned regarding any wireless access. The press center might be better equipped, but that is rather seperated from the main events.
Expect few postings; first a cocktail party - yes, life is tough.
Initial reason to attend was that the meeting also has to lead to the so-called fp7-program, a massive research funding program of the European Union. The expansion of the wage indicator in Europe is partly funding through fp6, the previous funding program. Loads of documents an reports I have been struggling through and I still not know what might be possible. Our friends in the EU have admitted that for smaller projects getting money through these channels is pretty hard. They want to make it easier and I do hope to meet some people who can tell me how easy it is.
For the time I focus on the communication side of the conference. Many meetings and lectures focus on how academics and the media can better work together. That might be a nice angle for my new media specialism.