[House Hearing, 109 Congress]
[From the U.S. Government Printing Office]





                      THE LOT OF CHINESE WORKERS:
                      DO CHINA'S LABOR LAWS WORK?

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

                               ROUNDTABLE

                               before the

              CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 11, 2006

                               __________

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


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              CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

                    LEGISLATIVE BRANCH COMMISSIONERS

Senate                               House

CHUCK HAGEL, Nebraska, Chairman    JAMES A. LEACH, Iowa, Co-Chairman
SAM BROWNBACK, Kansas              DAVID DREIER, California
GORDON SMITH, Oregon               FRANK R. WOLF, Virginia
JIM DeMINT, South Carolina         JOSEPH R. PITTS, Pennsylvania
MEL MARTINEZ, Florida              ROBERT B. ADERHOLT, Alabama
MAX BAUCUS, Montana                SANDER LEVIN, Michigan
CARL LEVIN, Michigan               MARCY KAPTUR, Ohio
DIANNE FEINSTEIN, California       SHERROD BROWN, Ohio
BYRON DORGAN, North Dakota         MICHAEL M. HONDA, California      



                     EXECUTIVE BRANCH COMMISSIONERS

                   STEVEN J. LAW, Department of Labor
                 PAULA DOBRIANSKY, Department of State

                David Dorman, Staff Director (Chairman)

               John Foarde, Staff Director (Co-Chairman)

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

Han, Dongfang, Director, China Labour Bulletin, Hong Kong Special 
  Administrative Region, China...................................     2
Munro, Robin, Director of Research, China Labour Bulletin, Hong 
  Kong Special Administrative Region, China......................     5

 
        THE LOT OF CHINESE WORKERS: DO CHINA'S LABOR LAWS WORK?

                              ----------                              


                        TUESDAY, APRIL 11, 2006

                            Congressional-Executive
                                       Commission on China,
                                                    Washington, DC.
    The Roundtable was convened, pursuant to notice, at 10 
a.m., in room 2255, Rayburn House Office Building, John Foarde 
(House Staff Director) presiding.
    Also present: Celeste Helm, Director, Bureau of 
International Labor Affairs, U.S. Department of Labor; Chris 
Mitchell, Office of Representative Michael M. Honda; William A. 
Farris, Senior Counsel; Patricia Dyson, Senior Counsel for 
Labor Affairs; Kara Abramson, Counsel; and Diana Wang, Research 
Associate.
    Mr. Foarde. Good morning, everyone. Let us get started. 
Welcome, on behalf of Chairman Senator Chuck Hagel and Co-
Chairman Congressman Jim Leach, and the Members of the 
Congressional-Executive Commission on China, to this staff-led 
issues roundtable.
    This is approximately the 55th such roundtable that we have 
done since February 2002. Our Commission members and the CECC 
staff find them extremely useful in getting into very great 
detail on the issues involved in human rights and the 
development of the rule of law in China that are part of our 
statutory mandate.
    Our theme this morning is Chinese labor laws. We are 
particularly pleased to have two very distinguished and very 
knowledgeable panelists to help us get into these issues. They 
may hold the record for coming the longest way to appear and to 
share their expertise and knowledge with us. They both come 
from Hong Kong. I will introduce each of them in a moment.
    Our procedure is, as we have done for the last four and a 
half years or so, that we will invite each of our panelists to 
make an opening presentation of about 10 minutes, and when both 
of them have spoken, then we will go to a question and answer 
session in which the staff panel up here will pose a question 
and listen to an answer for roughly about five minutes each. We 
will do continuing rounds of questions until we exhaust the 
topic, or reach 11:30 a.m., whichever comes first. Our 
experience has been that we never exhaust the topic, so we will 
have some mercy on our panelists and let them go after about 90 
minutes.
    After a few weeks, the complete transcript of this 
morning's roundtable will be available on the CECC Web site. 
That's at www.cecc.gov.

    The National People's Congress [NPC] enacted labor laws in 
1994 and in 2001 that many people in China and many observers 
abroad saw as positive steps for Chinese workers. In practice, 
however, both sets of laws have been implemented inconsistently 
across China, resulting in a legal regime for labor in China 
that does not protect workers against exploitation and abuse. 
Such abusive practices are particularly common against rural 
workers when they migrate into areas in China in which 
industrial development has been rapid and demand for labor is 
great. These migrant workers frequently find it difficult to 
protect themselves against health problems, long working hours, 
wage arrearages, and other forms of 
exploitation.
    Chinese workers are making their discontent known by 
holding large public protests in many places in China. Public 
demonstrations are one of the few methods open to exploited 
workers to bring their grievances to the attention of 
government authorities. Most protests are peaceful, but during 
2005, at least one incident involved workers battling security 
officers.
    Our panelists this morning will discuss these and other 
issues and developments, as well as offer comments on new labor 
legislation under consideration in China, so is with great 
pleasure that I introduce our first speaker this morning.
    Han Dongfang is the Director of the China Labour Bulletin 
[CLB], resident in Hong Kong. Han founded the CLB in Hong Kong 
in 1994 to promote democratic unions and the protection of 
labor rights and labor standards in mainland China. A railway 
worker, Han joined the Workers' Autonomous Federation during 
the pro-
democracy movement in Beijing during 1989 and was detained 
without trial for 22 months after the June 4, 1989, Tiananmen 
crackdown. Han maintains contact with Chinese workers through, 
among other means, his three weekly radio call-in shows and 
news programs broadcast over Radio Free Asia.
    Welcome, Han Dongfang. Over to you for 10 minutes or so for 
an opening statement.

  STATEMENT OF HAN DONGFANG, DIRECTOR, CHINA LABOUR BULLETIN, 
         HONG KONG SPECIAL ADMINISTRATIVE REGION, CHINA

    Mr. Han. Thank you, John. It is my pleasure to be here to 
share my experience with our daily work on labor issues in 
China. This reminds me. We did, once in Hong Kong, a roundtable 
about coal mine safety with you. At that time, the coal mine 
safety issue was not as terrible as today. We really hoped that 
that roundtable could make a greater impact.
    I do remember that we proposed an idea, that a Coal Miners' 
Health and Safety Committee should be organized, otherwise the 
disaster will get bigger and bigger. So now there is no 
committee being founded and the problem is getting bigger and 
bigger. We are in trouble in the coal mine area.
    This time, we are talking about the rule of law and civil 
society and how, from our work experience, we can contribute 
ideas from our daily work. I just want to mention a case first 
that I would share with everybody here.
    About nine months ago, or a little bit longer ago, we were 
approached by a group of jewelry factory workers. They got 
silicosis after years working in the jewelry factories cutting 
stones without proper protection. After a few years working in 
the factory, they started having breathing problems and they 
went to the government's special hospital for work-related 
diseases. The hospital 
deliberately misdiagnosed their disease as tuberculosis. These 
workers just felt they had bad luck. They left the factory and 
got a little compensation. Once they went back home, far away, 
thousands of miles away from Guangdong, they took the 
tuberculosis medicine for a year or more. It did not work, and 
their health problems were getting worse. They went to the 
local work-related disease hospital to get another check, and 
they found this silicosis. They decided to go back to Guangdong 
to ask their boss to pay compensation.
    So one extreme case was when a worker walked into his 
boss's office and asked for compensation, and he said, ``You 
know, I was working here for a few years, I got this disease 
here, I am dying, so why do you not give us some compensation? 
'' The boss told him, ``Yes, I know you are dying, but if you 
do not walk out of my office now, you are dead now.'' So this 
is the way the workers have been treated in the workplace, and 
this is the way the workers have been treated when they 
realized they do have this legal right to claim compensation. 
But they have just been treated that way.
    They approached us and we hired a local lawyer from the 
local city, from Xinjiang, who helped these workers collect 
evidence and file the lawsuit in the local court. About nine 
months after--it takes quite a long time, but nine months is 
not really that long compared with many others--we did manage 
to get this group of workers compensation. The highest 
compensation in one single case was 460,000 renminbi, which is 
about US$60,000. Obviously, it was a record-breaking 
compensation case in this area.
    From this, we learned several things. At the beginning, we 
felt it probably would not work. The local court had been co-
opted, and the factory owners are so powerful economically, and 
the workers do not feel they can really make it. But 
eventually, when we went through the legal procedure, we 
realized there were possibilities.
    It is not the case in today's China that you talk about the 
court and administrative section and everything as one. We can 
really separate each part of the government into great detail, 
and know who is on which side. Today's China is really 
changing.
    In this specific case, we realized that if we handled it 
well, if we focused very much on the law and the workers' 
rights and nothing else, just a very detailed focus on the case 
itself, the chance would get bigger and bigger that we could 
win the case for the workers. But not only win the case for the 
workers, for the compensation, but outside of this, really 
increase the workers' confidence and trust in the legal system 
and the law.
    One of the biggest problems in my country is that people do 
not trust the law. People think the law is for ruling people, 
not for protecting their rights. You say, ``the law is for 
protecting you,'' and they do not believe it. But through this 
legal process and getting compensation, it made these workers 
believe more in the legal system. In addition to that, it will 
encourage other workers from neighboring factories, not only 
this factory, to do the same and to have more and more 
confidence in the legal system and the law.
    Also, after this case we won, these workers were willing to 
do something else, although they are dying. Probably, at the 
longest, they can live for seven years. They are unable to be 
cured completely. But they are willing to help other workers. 
They are writing down their own stories, circulating the 
stories to the neighborhood factory workers who are working in 
the same position where they got the disease. They are warning 
other workers to be careful and ask for X-rays and a health 
check. This is a positive case.
    Of course, we have got a negative case, too. We have the 
Heilongjiang Coal Mine explosion, with 171 people killed last 
November. After two months, we approached some of the families. 
At the beginning, the families we approached wanted to accept 
our lawyer to file a lawsuit. Once we more or less worked out 
the lawyers from Beijing, a week after, we called them about 
the case, and about 80 percent of them dropped. They said, ``We 
do not want to file a lawsuit any more. We are scared of the 
local government and we are scared the local government is 
connected to the local mafia.'' So, no matter how much you 
explain to them the legal procedures, they just do not want to 
proceed. So this case really gave us an insight into how 
difficult it can be. But we do have hope, but we also have 
difficulties.
    From my work experience as a Chinese labor activist, as a 
Chinese citizen, this is my country, this is my home, no matter 
how hopeless it can be or how dark it is, we have to find the 
way out. We do believe it is difficult, but there is hope, 
which is through the legal system. We must raise public 
awareness and self-confidence. That will be the way out to 
create a civil society. That is what we believe the future will 
be.
    I will stop here.
    Mr. Foarde. Great. Han, thank you so much. We will come 
back to some of those very interesting issues during the 
question and answer session.
    I am now very happy to introduce Robin Munro. Han Dongfang, 
as he noted, has been a panelist on a CECC roundtable before, 
one in Hong Kong that we held in October 2002 on coal mining 
safety. But Robin is our guest for the first time, so we not 
only want to welcome you, but also want to extend 
congratulations on behalf of the Commission for having earned 
your Doctorate of Philosophy. So, Dr. Munro, congratulations!
    Robin is director of Research for the China Labour Bulletin 
in Hong Kong, and also contributes research to the quarterly 
journal of the U.S. NGO Human Rights in China. A graduate of 
Edinburgh University and an honorary research associate at the 
Law Department of the School of Oriental and African Studies at 
London University, Robin received an award from the American 
Psychiatric Association for his work on the political abuse of 
psychiatry in China, and defended his Ph.D. thesis on 
``Judicial Psychiatry and Human Rights in China.''
    So, Dr. Robin Munro, welcome to Washington, and thank you 
for sharing your expertise with us this afternoon.

 STATEMENT OF ROBIN MUNRO, DIRECTOR OF RESEARCH, CHINA LABOUR 
    BULLETIN, HONG KONG SPECIAL ADMINISTRATIVE REGION, CHINA

    Mr. Munro. Thanks very much, John. It is a great pleasure 
to be here.
    When I got my Ph.D. last year, it was in the Law Department 
at the School of Oriental and African Studies in London. My 
professor said to me, ``You do realize, Robin, that you can now 
teach law in a university,'' which I found a very chastening 
thought. I have no special skills in that area, but it is nice 
to think I could.
    I would like, in my short talk, now, to look at some of the 
broader issues facing the labor movement in China today and to 
look at workers' rights more generally and how that is 
developing.
    There has been a lot of attention paid over the last year 
and more to the issue of worker unrest. The Chinese Minister of 
Public Security told us, over the last two years on two 
separate occasions, that the scale of urban protests had been 
increasingly rapidly over the last 10 years, and the figures 
were that, 10 years ago, there were only 10,000 collective 
large-scale protests around China each year. Then two years 
ago, for the first time, the authorities announced there had 
been 74,000 that year involving 3.7 million people, mostly 
workers. Also, this figure includes rural protests, but it 
certainly seems most of the unrest is in the cities so far.
    Then late last year, the police minister announced that 
this figure had risen to 87,000 for last year, involving well 
over 4 million workers. Everyone knows that there is large-
scale unrest around China's cities.
    I think the main reasons are not hard to find. Chinese 
workers and their families have lost the job security and 
social welfare that they enjoyed for decades before the Reform 
Era. It may not have been much, but it was a safety net. That 
is gone. Since the reforms of the state-owned enterprises 
[SOEs] from the mid-990s onward, around 50 million Chinese 
workers have lost their jobs. The latest research shows that 
only a very small percentage of those laid-off redundant 
workers have actually found full-time, proper jobs, if we can 
call them that, since then. The great majority have gone into 
casual jobs. They become stall-holders, or just hustlers in the 
cities.
    On top of that, government policy, over the last 15 years 
in particular, has really made the Iron Lady from my country, 
Great Britain, Mrs. Thatcher, look like a very relaxed liberal 
in terms of social policy. For example, the health system has 
been largely privatized.
    In fact, hospitals and the medical services in China are 
now officially categorized as ``commercial enterprises,'' and 
they act like it as well. They are not getting government 
funding to anywhere near the degree needed, so hospitals are 
now selling the most expensive drugs in order to raise revenue 
to keep running.
    Most urban residents do not have medical insurance, which 
they need. So a serious illness in family can effectively 
bankrupt a working class family within weeks. This is one of 
the root causes of the kind of protests we are seeing, extreme 
social insecurity.
    On top of that, you have the education system, which also 
seems to be run on basically a commercial basis these days. 
School fees impose a very heavy burden on most ordinary 
families. In the countryside, fees are often prohibitive. Many 
rural children cannot now go to school, at least beyond the 
first few years of primary school.
    So we can see that there is great social injustice in China 
and it is getting worse. The government has said, over the last 
couple of years, that it wants to bring in policies aimed at 
restoring what the leadership calls a harmonious, stable 
society. This is the rubric of government policy now. But so 
far, we have not seen the meat in the sandwich there.
    The scale of social unrest in the cities has prompted many 
observers to question whether China's development model is, in 
fact, stable. Can it continue? Is there a major social crisis 
looming?
    But among this discussion of China's long-term stability, 
there is not a lot of analysis, I do not think, of what the 
actual nature of this protest is. I would like to just 
emphasize here that it is mainly protests from workers across a 
range of issues.
    So whereas 10 years ago I think you could have said China 
did not have a labor movement, that is no longer really the 
case. As we know, freedom of association for workers is legally 
prohibited. They can join any union they like, as long as it is 
the official All China Federation of Trade Unions, which does 
not act like a union, it acts effectively as a labor discipline 
enforcement arm of the government and the Communist Party.
    So there is no freedom of association for workers. But 
hitherto, people have tended to think that, therefore, there is 
no Chinese labor movement. I think the scale of worker unrest 
nowadays is so great, you can go to almost any city in the 
country now and there will be several major collective worker 
protests going on at the same time.
    So China now has a labor movement. This is an important 
point to just put there on the table and recognize. It is not 
organized. It is spontaneous, it is relatively inchoate. But 
then so were labor movements in most Western countries before 
trade unions were permitted.
    We have basically a pre-union phase of labor movement 
development in China today. It also has great potential, I 
think, for becoming a proper labor movement. One of the things 
that China Labour Bulletin and other groups like us are trying 
to do our best to ensure is that, as this movement emerges, it 
develops along healthy, law-abiding lines. That, in China, 
means, above all, that China's new labor movement needs to be 
non-political in outlook. It needs to focus on livelihood 
issues, bread-and-butter issues for working people and their 
families, and avoid the temptation or the potentiality which is 
always there in Chinese society, because Chinese society is so 
heavily politicized, the potentiality to begin making political 
demands at an early stage. That would be fatal, I think, for 
the fledgling Chinese labor movement.
    Therefore, in our work we emphasize that workers should 
stay away from politics, concentrate on developing healthy 
labor relations in China. China is now a capitalist society. 
China's labor movement does not need to be like Polish 
Solidarity, for example. Why? Because in Poland, before 1989, 
everything was state-owned. Therefore, whenever you had worker 
unrest, it was automatically directed at the government. It 
became political very quickly.
    In China, you have capitalism. You have private 
entrepreneurs. Worker protests and dissatisfaction are directed 
at factory owners, essentially. The state-owned sector is 
virtually gone. So that is the future. Labor relations in that 
kind of economy do not need to have a political aim, and this 
is a very important point that we need to bear in mind.
    Now I would also like to point out that another issue that 
is attracting a lot of attention outside China now is the 
emerging rights defense movement, the so-called Wei Quan 
movement--in Chinese it means ``Defending Rights.'' Now I have 
been following human rights in China for about 25 years, and to 
my mind, this is the most significant development that has yet 
happened on the Chinese human rights scene.
    It is significant because, for the first time, through this 
rights defense movement, we are seeing local communities--it is 
a very grassroots-based movement--organizing protests against 
local injustices, appealing to rule of law principles, often 
taking their case to court. They are protesting about things 
like forced evictions from urban properties for urban 
redevelopment, illegal land seizures in the countryside, the 
locating of heavily polluting factories on communal land where 
rural children come down with horrible illnesses.
    For the first time, we are seeing a grassroots-based rights 
movement in China, and it is getting more and more widespread. 
The reason, again, is not so difficult to see. It is because 
the level of social injustice in China today is very high. 
People are fighting back, but they are doing so through appeal 
to the rule of law in pursuit of legally specified rights that 
now, after many years of propaganda and education about the 
legal system, they actually think they should have and they are 
entitled to. ``Why are we not getting these rights? '' they 
ask.
    Now I think we should be calling this rights defense 
movement, the Wei Quan movement, ``China's emerging civil 
rights movement.'' That is what it is, it is a civil rights 
movement at an early stage.
    I use that term because I think there are comparisons with 
the civil rights movement in places like the United States in 
the 1960s. What we are finding in China is that you are having 
civil rights lawyers from the cities going down to the 
countryside, hooking up with local protestors, telling them how 
to achieve their aims legally. You are getting academics coming 
in from the universities, going down to where the protests are 
and offering their advice and help. Also, you are getting 
investigative journalists reporting these cases and getting the 
word out, increasingly opening up a new space within the news 
media. Also, the government is fighting back and trying to 
restrict those media freedoms, but, still, the momentum is very 
great in this area. So we are getting a new synergy between key 
elements in society who are working together, so this is all 
new.
    I want to emphasize that, really, it is the workers' 
movement that I referred to a moment ago, consisting of these 
87,000 mass protests, countless wildcat strikes that are never 
reported, all these kinds of things over the last 10 years, it 
is that movement which has really created this space, this 
emerging civil society space, which the country's emerging 
civil rights movement, involving many other types of social 
actors, is now beginning to occupy and use.
    It is the sheer weight of numbers of worker activity and 
protest over the last 10 years which has one very important 
consequence: 10 years ago, any worker protest would immediately 
be categorized by the local government as a political 
challenge. Very likely, the 
organizers would be arrested, possibly charged with counter-
revolution or endangering state security. Now, because of the 
sheer quantity of these protests and their diffuse spreading 
around society, it has no longer become tenable for the 
government to categorize each and every incident of worker 
protest as some kind of political threat. They have been forced 
to acknowledge that these are not political threats, these are, 
in fact, protests against local injustice. That is all they 
are. There has become, therefore, almost willy nilly, a level 
of greater tolerance within local governments for these kinds 
of protests, and hence for the emerging civil rights movement.
    So I think there is a very important synergy and symbiosis 
developing in China between the workers' movement and this very 
significant, broader, emerging civil rights movement.
    I think I have many other things to say, but I will stop 
there.
    Mr. Foarde. And we can pick up some of your other thoughts 
during the question and answer session. Thank you very much, 
Robin, for that really good presentation, and to Han Dongfang, 
for his opening remarks.
    The complete transcripts of today's roundtable, as I 
mentioned earlier, will be available in a few weeks on the CECC 
Web site. If you are not already signed up on our mailing list 
for future roundtables, hearings, and activities of this sort, 
please visit the Web site and sign yourself up.
    I would like to proceed now to the question and answer 
session. We will give everyone on the panel here about five 
minutes to ask questions. You may direct your questions either 
to Han or to Robin, or to both. We will go around until we 
reach 11:30.
    I would exercise the prerogative of the Chair to begin by 
picking up on a thought that Han Dongfang had. You mentioned, 
in the case of the jewelry workers with the silicosis, that 
after they won their case, they were helping by spreading the 
word around about their case to their fellow workers and 
advising their fellow workers to seek compensation. Are they 
doing that in writing by putting out publications or letters? 
Or is CLB, for example, helping to publicize this type of case, 
or other cases like it, by circulating information about it in 
Chinese into China?
    Mr. Han. The workers themselves are doing it on their own. 
They are writing up their own stories, their experiences, and 
warning other workers to be careful, and one, two, three. The 
law says you should have the right to ask for a medical check 
if you suspect you are having this situation.
    But CLB is also doing our part separately from the workers. 
Through helping this group of workers, we put together this 
report. We realized, through this legal process, that several 
things were absolutely wrong.
    One is that the law makes it really complicated for the 
workers to even obtain the medical check. For example, the law 
says you have to have an approval letter from your employer to 
say you are working in the suspect working place, and then the 
hospital will receive you. Otherwise, you cannot do that. So, I 
do not know many employers who are really willing to do that in 
China.
    Second, of course, you have this hidden corruption between 
the hospital and factory bosses. So we go through the legal 
procedure and we realize there is something wrong, including 
the role of the union that is missing, and we put out a report. 
Also, with some concrete policy suggestions. We decided to go 
that way. So that is a side kind of result.
    CLB put the report out through our legal help work. So, 
hopefully we will be able to use these cases, very concrete 
cases, and it might remind policymakers, lawmakers, to keep 
their eyes open on this, and hopefully they can change the law 
or enforce the legal procedure.
    Mr. Foarde. Very useful. Thank you.
    Let me take the rest of my time to ask Robin Munro. During 
your presentation, you stressed that the social unrest that we 
have seen in China, particularly recently, was really led by 
workers. It was really worker protests. Just to clarify, are we 
talking about workers in manufacturing sectors, in extractive 
industries, or in agriculture? What, if any, role have workers 
in service industries had in organizing or being part of these 
protests?
    Mr. Munro. Well, I think the first thing is, we do not know 
a heck of a lot about how these protests break down. It was 
very much a first when the Ministry of Public Security 
announced these very high aggregate figures two years ago, and 
then again last year, with 87,000 protests. What we have is 
really anecdotal evidence and a number of reports of individual 
protests. A lot of reports. But we do not really know 
specifically how those numbers break down between sectors.
    What we do know, though, is that in the late 1990s, most of 
the urban protests by workers involved state-owned 
enterprises--workers who had been laid off, or ``xiagang'' as 
the Chinese say--and the protestors were finding that instead 
of getting proper redundancy money, pensions as applicable, and 
medical insurance as they had been promised, they were getting 
virtually nothing. They were being put on the minimum monthly 
living allowance by the government and had no job prospects 
whatsoever. So a lot of the protests in the late 1990s were 
either laid-off state-owned enterprise workers or retirees from 
these enterprises whose pensions had disappeared, for example.
    That changed after about 1999 or 2000. I think most of the 
urban protests now come from the manufacturing sector, mostly 
from rural migrant workers, of whom there are now reckoned to 
be anywhere between 100 and 140 million, who have come to 
Chinese cities from the countryside to seek work.
    We have seen a lot of protests in these very large shoe 
factories, for example, where you have got tens of thousands of 
workers. Electronics factories, also. That is another place 
where there have been a lot of protests, usually because 
overseas investors from places such as Hong Kong and South 
Korea are paying wages below the local legal minimum wage, and 
they are not paying overtime rates as they are required to do 
by law, all these kinds of things.
    There was a big protest, I think it is worth singling out, 
up in the city of Xianyang, which is a kind of twin city of 
Xi'an in central China. It is where the Xi'an Airport is 
located. The tourists never go there; you do not want to go 
there. It is a very gritty industrial city, very depressed 
economically.
    In late 2004, there was a massive strike by almost 6,000 
female workers. This was a state-owned textile factory. About 
three days into the strike, I flew up there to check it out. I 
managed to get myself detained briefly, but extracted myself 
without major incident.
    But what was really interesting there, talking to the 
workers, is that it was a community-based protest. And, yes, it 
was about the fact that the factory had been privatized, a lot 
of the workers had lost their jobs. Those that remained were 
put on short-term contracts at a lower rate than they had 
before. Also, workers who had been there for 20, 30 years were 
being told that they would have to do a six-month probation 
period to see if they were ``up to the job.'' This was 
insulting to them.
    But what struck me is that the main reason for that protest 
was a sense of community outrage at what was being done to 
their factory that they had built up over the last 40 years. So 
it was less about economic things and more about a sense of 
protecting their community.
    In the service sector, not so much is known about that. You 
do hear reports of protests from office workers. One very 
important area where there is a lot of unrest is in the 
teaching profession in China, especially amongst rural 
teachers. You have two grades of teachers in China. One is the 
state teachers, mostly in the cities, and then you have the so-
called community teachers, who are mostly in the countryside. 
Community teachers receive a third or a quarter of the wages 
that urban teachers get. What is much worse, though, is they 
are often simply not paid. It is quite astonishing. One wonders 
how these people manage to survive.
    But over the last couple of years there has been a series 
of large-scale, protracted protests by rural teachers, often 
involving hundreds at a time, going on for months, because they 
have not been paid for a year, sometimes two years. They 
basically live by borrowing money from friends and relatives. 
So there is one example, I think, of how extraordinarily unjust 
the new system is in many respects.
    Mr. Foarde. Thank you very much. Thanks to you both. I 
would now like to recognize Celeste Helm, who is Director of 
the Office of Foreign Relations in the Bureau of International 
Labor Affairs at the U.S. Department of Labor. Celeste is here 
this morning representing Steven J. Law, the Deputy Secretary 
of Labor, who is one of our CECC Members.
    Celeste, over to you.
    Ms. Helm. Thank you. This is my first visit to the 
Commission, and I appreciate the opportunity to be here today. 
I thank both of you for your presentations. They were both very 
interesting.
    I was interested in your point about capitalism versus 
communism, that it is now recognized that China is a capitalist 
economy. As you point out, the protestors are mainly focused on 
issues of social injustice; however, in the drive to capitalism 
it seems that the government, like it or not, is going to be 
pushed into making decisions that liberalize trade policies, 
and in so doing, encourage the private sector. In the process, 
it seems the government will have to come to the conclusion 
that worker rights are an important component of that 
philosophy. How do you see the tension between Communism and 
capitalism playing out in terms of worker rights over the next 
five years?
    Mr. Munro. I think the first thing to add there is the 
government itself does not acknowledge that they now have 
capitalism in China. The continuing ideology, despite all the 
evidence in everyone's eyes and pockets, is that you have a 
``socialist market economy'' in China, but it is not 
capitalism. But of course it is. It, in many ways, is even a 
more unrestrained form of capitalism than we have had in the 
harshest periods in the West, I would say, in the early phases 
of capitalism here.
    I think there is a shift in government perception that is 
beginning to catch up with the realities, the ideology and the 
government's emphasis nowadays since Wen Jiabao and Hu Jintao 
took over on developing a harmonious, stable society 
notwithstanding, is very much a reflection of that. When Wen 
Jiabao says ``we must build a harmonious, stable society,'' the 
message he is sending is, ``my God, we have an extremely 
unharmonious and unstable society right now.'' That is the 
subtext. So there is recognition there that something has to be 
done. They are beginning to grapple with this issue.
    I think the fact that they have made so little progress on 
improving coal mine safety is just a very vivid example of how 
difficult they are finding it. They are coming up against huge 
vested interests in the economy in the case of the private coal 
mine owners, state mine managers, and so forth.
    In fact, of course, as capitalism develops, these vested 
interests get stronger and stronger. Also, it is leading to 
greater and greater decentralization and local power. As 
provinces become wealthier, they have their own priorities. 
They are less amenable and less obedient to central government 
dictates. So this complicates the issue and makes the task of 
trying to build this harmonious society even more daunting.
    I think my guess over the next five years--and this is an 
optimistic guess, what we hope will happen--is that the 
government will recognize that it has capitalism. Capitalism 
involves tensions between workers and employers which have to 
be addressed through constructive negotiating and arbitration 
mechanisms. Those mechanisms do not exist right now. Workers 
are not being represented in the marketplace. They have no 
union that speaks out for them.
    The government is terrified at the thought of allowing 
genuine functioning unions in China, and it is very easy to see 
why. They take one look at what happened in Poland and Eastern 
Europe and said, ``over our dead bodies will we allow this 
course of evolution to begin.'' So they are very vigilant about 
allowing any kind of worker self-organization.
    But I think we are hearing messages from policymakers and 
academics in China who are very aware of all these issues and 
they are saying that there is beginning to be some kind of 
acknowledgement officially that you must allow workers some 
degree of genuine representation in order for the system to 
work. Economically, it is not a Communist system, and different 
rules are needed to make the system work properly.
    The experience of Western countries shows that unions can 
contribute to social stability. That is their role in the 
social democracy. It has been shown very clearly. We hope 
China's leadership will get that message and act on it.
    Mr. Foarde. Han, did you have a comment on that question?
    Mr. Han. Yes, I have a short one. Now we are talking about 
how economic development will make the government go that way, 
or increasing social unrest will make the government have to go 
that way.
    But there are differences between the government being 
pushed by the trouble they created, and there is a way we can 
prevent most of the trouble by rebuilding some system, which is 
not existing. Like in Chinese we say ``mie huo fang huo,'' 
which is putting down a fire to prevent a fire. These are 
totally different things.
    What we are talking about is that we suggest to the 
government that they should change their mentality, which is 
putting down a fire, one after another, to try to create a 
system that prevents a fire. So at the same time we cannot 
really put a hold on the government so they will put some new 
elements on to prevent the fire. So from the citizens' point of 
view, the workers and farmers, how can we lead the workers and 
farmers that way to push the government in that way to rebuild 
the system?
    Mr. Foarde. Thank you very much. I would like, now, to 
recognize Chris Mitchell. Chris represents Congressman Michael 
Honda of California, who is one of our CECC Members.
    Over to you, Chris, for five minutes.
    Mr. Mitchell. I arrived a bit late, so I apologize if I ask 
questions that you discussed prior to my arrival.
    I am wondering how much media coverage there is on these 
protests that are taking place.
    Mr. Munro. You are monitoring the media more than I am.
    Mr. Han. All right. The media can be separated into two 
areas. One, is traditional, like the TV and printing media, and 
newspaper and magazines. The other one is also based on this 
traditional media, but they also have their Web sites. On their 
Web site, there is much more--10 times, 50 times, 100 times--
information than in the printed versions.
    For example, actually in most of the cases, we are helping 
the workers and farmers from the Internet. There are, for 
example, many Web sites. Every morning, I go there, sometimes 
twice. You find people are posting their stories, or just one 
or two sentences about where something happened. We will just 
grab it and go for the investigation and see whether we have a 
chance at helping them.
    The other thing is that this kind of Web site posting also 
helps the local news media, the reporters. Today, we can really 
see both the Internet sector, printed, or even TV and radio go 
really far. For example, take the reporting on the coal mine 
accidents. Five years ago, you would not imagine how they would 
do the coal mine accidents. Five years ago, they only listed 
figures: which month, which day, how many people killed, and 
the value of the damage. Today, these journalists go to the 
families, they interview the wives and daughters, their 
parents, about their miserable lives and why their husband 
would go as a coal miner, and how much you owe, and the stories 
behind the accidents, behind the figures. Even the China 
Central Television [CCTV] has done several very serious reports 
on coal mine accidents. It is really improving.
    Mr. Munro. I would just add one point.
    I think, when it comes to actual worker protests or unrest, 
there is still pretty much a taboo, I think, Dongfang, would 
you agree, on reporting these in the local news media? Print 
media or television. They just maintain radio silence. Even 
when there is a massive protest going on in the center of the 
city, it will not appear in the local newspaper.
    But as Dongfang was saying, on a whole range of somewhat 
less sensitive worker rights' related issues, especially in 
individual cases, there is now this new generation of 
investigative journalists in China who are eager to go out, get 
the story, and see it in their newspaper.
    So a lot of individual cases, like the silicosis cases we 
worked on, for example, were reported quite extensively in the 
Guangdong print media. In fact, there was even a national 
magazine article talking about the cases. There is much wider 
coverage, but still this taboo on directly reporting on actual 
protests.
    Mr. Foarde. Next, I would like to recognize Pat Dyson, who 
is our Senior Counsel for Labor Affairs. Any time we put one of 
these roundtables together it takes a lot of heavy lifting, 
both conceptual as well as administrative, and we always turn 
to our staff experts in the first instance for thinking about 
how to put these together. So Pat has done that for us again 
successfully.
    Over to you for five minutes.
    Ms. Dyson. First, I would like to thank you both for 
coming. I know you have a very heavy schedule while you are in 
the United States, and we really appreciate it.
    There has been much talk in the press that I have seen 
about labor contracts recently. I want to know how extensive 
you think they might be and whether these will actually protect 
workers, and how the system works. Will there be any input from 
the workers' side, the workers' congresses, or even the ACFTU 
in drawing up these contracts and how they will protect 
workers? Robin? Or both.
    Mr. Munro. Well, yes. In fact, they are now revising the 
labor contract law in the People's Republic of China. There is 
a lot of 
debate. It is before the NPC at the moment. At CLB, all our 
staff is currently compiling views and opinions so we can send 
a formal set of recommendations to the NPC on this new 
legislation, because we think it is very important.
    I think, of course, there are two types of labor contracts. 
One is the individual labor contract, which has been going on 
in China since about 1984. This was when they began to smash 
the iron rice bowl, a shift to a system of fixed-term 
contracts, with limited duration, set levels of pay and 
conditions, and so forth. Most workers in China now have that 
individual labor contract. They are all supposed to, by law. 
There are still some private factories that are sort of cowboy 
operations employing mostly employing migrant workers, that do 
not give them labor contracts. But by law, they are supposed to 
have them.
    The other type of contract is the collective labor 
contract. This began to be introduced by the government about 
10 years ago. They had a major campaign in the mid- to late 
1990s to propagate the collective labor contract within the 
state-owned enterprise sector, and there were something like 
180,000 of these collective contracts negotiated and signed in 
the SOEs.
    I put ``negotiated'' in inverted commas because the 
mechanism for negotiation is that, where there is an official 
union present, the union has to negotiate the terms of the 
collective contract with management. But the official union 
rarely actually did this.
    Of course, the collective contract applies equally to all 
the workforce. That is the point about it. It sets down a 
single, unified set of standards of treatment for all workers 
in a given enterprise. Workers also, at the same time, have 
their individual contract, but the collective one takes 
precedence.
    What we know from this SOE collective contract campaign is 
that academics in China, including ACFTU academics that studied 
it, have said that actually it was a bit of a farce. The local 
Bureau of Labor would draw up the model collective contract, a 
meeting would be called in the factory between the trade union 
chairman and the manager, they would have the model contract 
there on the table, and they would say, ``Do you want to change 
anything? '' They would say, ``No, let's just sign it.'' That 
is the extent of the negotiation. In many cases, the workers 
themselves did not even know they had a collective contract.
    So that kind of spoils the whole point, because the 
collective contract is a very good vehicle for labor rights, if 
it is well negotiated, involving real worker participation. 
That has been missing.
    Actually, at CLB we have a new program which we started 
several months ago, which we are calling CC-2005, a slightly 
cheeky designation, thinking in terms of SA-8000 and these 
other CSR standards. But it stands for Collective Contract 
2005. We are urging multinationals that operate in China to 
pressure their supplier factories into allowing the workers to 
negotiate a proper collective contract in the workplace.
    I should point out that in most of the private sector in 
China where we are interested in doing this, there is no 
official union presence. The ACFTU has only penetrated less 
than 30 percent of the private enterprises. Now, this gives a 
very good opportunity because, under the collective contract 
regulations in China, where there is no union presence, the 
workers are allowed to elect their own representatives for the 
purposes of negotiating and signing this collective contract. 
So we see this as providing an opportunity to create a basic 
organizing space, legally protected in the private sector.
    Mr. Foarde. Han? Please, if you have a comment.
    Mr. Han. Yes; just briefly. Robin just mentioned the 
multinationals. So collective contracts, as part of the 
collective contract regulations, as part of the labor law 
system, can be very useful. As we keep mentioning, the labor 
rights protections should be as concrete as possible, as 
detailed as possible.
    This collective contract regulation really can bring 
several things for workers. The key thing is workers' 
participation. According to the collective contract 
regulations, the negotiation process can be done by either an 
ACFTU representative, or if there is no ACFTU, it can be done 
by elected workers' representatives. So that is very clear.
    What we want to do is get this collective contract 
regulation connected, with a code of conduct, a corporate 
social responsibility kind of thing, which they have been 
trying to work out for more than 10 years but have never worked 
out. Now we try to put it together as a new program. We make 
the corporate social responsibility, the Code of Conduct 
document, which has no teeth, and make them, together with 
Chinese law, have teeth, in particular with the workers' 
participation, workers' representation.
    So together with international or multinational companies' 
pressure, and the workers' pressure on the Chinese legal 
system, that will make a target of the factory owners and their 
illegal 
behavior.
    Mr. Foarde. Very useful. Thank you.
    I would now like to recognize William Farris, who is a 
Senior Counsel on the Commission staff.
    William, over to you.
    Mr. Farris. Thank you.
    My question is about detentions in China. We have seen an 
apparent increase in the number of worker-related protests, but 
it does not seem as though we are seeing a similar increase in 
the reports of people who are engaged in these protests being 
detained, at least not for extensive periods of time.
    I am wondering if that is a change in the tactics of the 
government in handling these protests, or if these detentions 
are occurring but they are just not being reported, that the 
information is not getting out. I would just like your thoughts 
on that.
    Mr. Munro. Just a quick response. I think, again, we have 
to go back to the fact that we have this figure from the 
authorities of 87,000 last year, I think, for protests. That is 
a huge number. We only have details on a very small percentage 
of that number. So basically we do not know what is happening 
to the workers involved in those protests and who is leading 
them in most parts of the country.
    I think that with China's extraordinary degree of openness 
these days, compared with 25 years ago, it is easy to forget 
that there is still a huge information deficit in most parts of 
the country. For every city in which there are a lot of 
foreigners, there are 10 times more cities in which there are 
hardly any, not to mention foreign journalists being there, of 
whom there are none.
    So, again, we just do not know what is happening to most of 
the people organizing these protests. I think, in general, as I 
mentioned earlier, there is a greater degree of tolerance by 
local governments for such phenomena these days, and it is 
driven by the sheer weight of numbers. The authorities have to 
live with it, to some extent. They cannot be arresting 
everybody involved in all these protests. It is just not 
doable. Also, they recognize that it would just exacerbate what 
are mass protests. So I think the tactics of local authorities 
now is to try to defuse these protests. Often, you do see 
concessions made.
    One of the ironies, in fact, is that the government wants a 
stable society and that people should follow the law and use 
legal channels to resolve their problems, but the fact is that 
the legal channels usually do not work, and that is what drives 
workers to take to the streets.
    Once they take to the streets, they are actually more 
likely to prompt the government to intervene to solve the 
problem, which, of course, leads to a situation where workers 
think they get more by publicly protesting. So it is somewhat 
ironic. But in any case, it is enlarging the social space, I 
think, for this kind of thing, which is welcome.
    Mr. Han. I just want to add something. These massive worker 
protests without proper organizing are basically based on 
anger, not based on well-organized activities. Except in some 
cases that involve teachers, most of them are based on anger. 
What we found is they are based on anger.
    Although, as Robin says, the local government is having 
more tolerance than before, based on the numbers. But quite 
often, these activities are based on anger and it is easy to go 
too far across the legal lines, and that gives the local 
governments the excuse to arrest workers.
    Now we are not only watching them, but we also try to 
involve these cases, not only the labor disputes and these 
disease cases. For example, in 2004, we hired a lawyer to help 
the Stella shoe factory workers, which is Taiwan's big shoe 
factory chain. There were about 30 workers detained, and 
finally 9 of them were charged and sentenced. We hired a lawyer 
to help them eventually appeal. We managed to get a compromise 
sentence. The Appeals Court changed the verdict from a nine 
months sentence and a three and a half years sentence, to 
sentence them until the day of the Appeals Court decision. So 
that is a compromise.
    So it is also important, we realized, to get these workers' 
leaders out of prison by helping them, and also give them two 
different ideas, different feelings. One is we had better do it 
legally and not go too far. Second, to tell these workers that 
even if you are in prison, you are not going to be left behind 
and somebody will help you. So that makes it into a 
constructive way, not leave the initiative in the field to die, 
but rather to grow.
    Mr. Foarde. Please go ahead.
    Mr. Munro. I just had one thought. Yes. We do not know how 
many workers are detained in China for protests. I think it is 
largely because we just do not have the information, as I said. 
It varies a lot from province to province, city to city. There 
tends to be, in the inland provinces, a repressive police 
response. Those are also the places we have less access to and 
information about.
    But one thing I want to mention is that there is a very 
worrying trend in China, and this is happening against the 
civil rights movement, as well as workers. That is for local 
authorities to act with local criminal gangs, triads, thugs, to 
mobilize those sorts of elements to go in and suppress 
protests. We have seen a worrying spate of reports about this 
over the last year. It is very disturbing because it indicates 
a drift toward official lawlessness. People have been beaten to 
death by these thugs over the last year, and very few of them 
are ever being caught and punished because they are acting, 
obviously, on the go-ahead of local authorities who do not want 
to be seen to be mobilizing police. They would rather take a 
short cut and send in a bunch of thugs to beat the hell out of 
the protestors.
    Mr. Foarde. Thank you both again.
    I would like, now, to recognize Kara Abramson, who is a 
Counsel on the Commission staff.
    Kara, over to you.
    Ms. Abramson. Thank you. Dr. Munro, you made reference to a 
strike in 2004 by 6,000 women workers. This case draws 
attention to the gender composition in certain sectors of 
industry. Do you think there are adequate protections in both 
the law and practice for women workers?
    Mr. Munro. No, not at all. Let us just look at the migrant 
women workers, for example. In many industries in south China 
along the eastern coast that are in the private sector, the 
workforce is made up of 80 to 90 percent women.
    But there are very specific guidelines amongst the factory 
owners about who they want to employ, and for how long. What we 
find is that, for example, by the time a female migrant worker 
has reached the ripe old age of 25 or so, she is regarded as 
``over the hill,'' too old to employ. It becomes more and more 
difficult for her to get a job anywhere. By that time, they 
have been working 12, sometimes 14-, 15-hour days, 30 days a 
month. They will have one day off a month, if they are lucky, 
in often unsafe, hazardous working environments. A lot of them 
have occupational illnesses, problems, or injuries. Their 
health is often very poor by the time they are in their mid-
20s. There is nothing left for them but to go back to the 
countryside. If they are lucky, they have some hard-earned 
savings, but often, increasingly nowadays, they do not.
    Take Guangdong, for example. Over the last 15 years, the 
cost of living has increased 300 percent, approximately, 
whereas, according to official surveys, the average migrant 
worker's wage has gone up about 15 percent, in many cases. So, 
clearly, a lot of these migrant workers have little or nothing 
left at the end of the month to send home, which defeats the 
whole point of going to the cities in the first place.
    But what we find, the funny thing is, take the Xianyang 
factory strike. Nearly all the workers were women. But what 
struck me, when I went up there and managed to make contact 
with some of the strike leaders, is that they were all men.
    CLB did a field-based survey last year of about 40 women 
workers, some in China. We went and interviewed them, and we 
have written a report on this which is on our Chinese Web site, 
and we are currently producing an English version of that 
report which will be available soon.
    But one of the findings is that women workers do tend to be 
more fearful of retaliation by their factory bosses. They are 
less willing to stand up for their rights in general, but by no 
means always, I might add. But this is a problem. I think it is 
partly a facet of the traditional Chinese social values and 
system, where women are expected to be less assertive. But 
certainly women are facing the major brunt of a lot of the 
problems facing the workforce in general.
    Mr. Han. Gender discrimination, definitely, is a problem in 
China, because it will have the cultural background probably 
that is worse in many places. Even after Mao made women as . . 
. half . . . How do you explain that?
    Mr. Foarde. ``Holding up half the sky.''
    Mr. Han. Yes. Thank you. Make sure that is on the record. 
But the way we see it, is, yes, it is there. How bad it is, to 
us, is not that important. But it is important. How to find a 
way out is worth thinking about every day. For example, we have 
a case that we have been trying for about a year and still have 
not finished the process yet. There were many retired women 
workers from two sectors. One is the oil sector, the other is 
the coal mining sector. They are called ``dependent workers.'' 
They were hired in the 1950s and 1960s when China just began 
developing the oil sector. They went with their husbands and do 
work like cooking or cleaning up work, or like teaching the 
children in kindergarten. Then they were asked in the late 
1980s to retire. They got a small amount of money per year, 
like 700 or 800 yuan, which is US$100. The luckier ones 
received 50 yuan a month, and the lowest I know of from the 
Shanxi Province, the Tungtuan coal mine, they receive 10 yuan a 
month as their retirement benefits.
    So we are trying to help them file a lawsuit based on labor 
law, and to compute how much they deserve, based on how many 
years they served the company, where they really could find the 
record to claim their retirement benefit.
    Through this, we hopefully can raise awareness, that even 
these people are being treated as dependent workers, and they 
also deserve a retirement benefit. So that is one way to go 
through, again, the legal system, using the current law to 
raise awareness about the gender discrimination issue.
    Mr. Foarde. Thank you very much.
    I would like, now, to recognize the other half of the 
dynamic duo that helped put together this morning's roundtable. 
Diana Wang is the most recent addition to our CECC staff, and 
is our Research Associate. Diana.
    Ms. Wang. Thanks, John.
    Robin, you talked about how expensive education and health 
care can be. We know that migrant workers are especially 
vulnerable to financial bankruptcy because they are often 
denied social services in urban areas based on their rural 
household registration, or hukou, status. My question to both 
of you is: will hukou reform help migrant workers?
    Mr. Munro. Well, I think it depends on how far the reform 
goes. Certainly it is urgently needed, the reform of the 
household registration system. Some commentators and academics 
on the subject have described it as China's equivalent of a 
kind of apartheid system, in which there was this total 
separation between the rural population and the urban 
population in previous decades. It was a criminal offense for 
rural dwellers to move into cities without going through the 
formal change of hukou status required, which most of them were 
not eligible for and did not get. It was a lifetime tag that 
restricted a person's life opportunities radically.
    With the development of the private economy, the market 
economy, since the early 1990s, in particular, there has become 
a de facto erosion of that social wall between town and 
country. As we know, over 100 million migrant workers are now 
living, mostly legally, in the city, although on a temporary 
basis.
    But as you say, their children are not allowed to go to 
local schools, so they cannot bring their families legally to 
the cities. They are not eligible for local health care 
support, all these things.
    And you know what? They are not even recognized as real 
workers. That is the funny thing. They are not regarded as real 
``gongren,'' the Chinese word for worker. They are ``mingong,'' 
which means ``people workers,'' or migrant workers. So in the 
public perception, they do not really belong long-term in the 
cities.
    That is beginning to change. One example of that, one sign 
of that, was a couple of years ago, when the All China 
Federation of Trade Unions, for the first time, announced that 
it would begin allowing migrant workers from the countryside to 
join the union. That kind of conferred on them at least a 
partial recognition that they were real workers. So that is an 
important thing.
    I think, however, there has been very little response from 
the migrant workers themselves. They are not beating a path to 
the door of the ACFTU. This points to another interesting issue 
that is perhaps worth mentioning. When I said earlier that 
there is now a labor movement in China that actually exists, 
that also means that it is good that we can stop thinking of 
Chinese workers just as these passive victims, as they are so 
often depicted in scholarly studies and news reports, you know: 
``poor Chinese workers.'' Increasingly, they are beginning to 
stand up for their rights and demand what the law says they 
should have.
    I think that is particularly conspicuous amongst migrant 
workers, oddly enough. With the traditional urban workers, 
there is a different mentality, because for decades they had a 
strong dependence on the state. The state looked after them, 
gave them the social welfare, educated their children more or 
less for free, gave them very cheap housing, and so forth. When 
they were all laid off in the late 1990s, urban workers' 
protests were directed at the government, saying, ``Come in and 
fix our problems. Help us. Do not abandon us.''
    The migrant workers have a very different mind-set. No one, 
no official, in their years back home in the countryside, in 
99.9 percent of the cases, has ever done anything for them. 
They are very much more independent minded. They are more 
assertive, in fact, I would say.
    In CLB, we were thinking in terms that China's migrant 
workforce is, in fact, China's future working class. The urban 
workers are finding their living standards dragged down 
radically, both by a combination of government policy and by 
the competitive forces of the migrant workers who are now 
present in huge numbers in the cities. So there is a leveling 
happening, or a joining together. We really have to keep a 
close eye on migrant workers, because I think they are where 
the labor movement will be in a few years' time.
    Dongfang, do you have something to add?
    Mr. Han. Yes. Actually, the hukou system and the 
reeducation through labor system, to me, are the most two evil 
things in this system. They can do, really, a lot of evil 
things. The hukou system, in particular, can be compared to the 
apartheid system in South Africa. That is about the human race, 
and this is about human class, among the very well-born.
    Based on the hukou system, you can really see why the 
migrant workers in Guangdong Province, for example, can never 
settle down in that place where they have been working for more 
than 10 years. They always have to think about going back home, 
and they do not belong to this place. That is why, in Guangdong 
Province, if you go driving or walking in these industrial 
towns, and the factories, one after another, you see, 
especially at lunch time or before dinner time, between 5:30 to 
6 in the afternoon, you see these young workers, mostly women, 
walking in front of factories on the roads, talking to their 
friends. It looks like blind souls. They have no roots. They 
are not allowed to put down roots there to build their 
community.
    So that is the most important thing, which is that you have 
tens of millions of people working in this place, but none of 
them think they belong to this place. None of them will have 
the chance, the thought to plant their family in this local 
place. Even if they work for 15 years, they cannot plan for 
their children to grow up here. There is no kind of generation-
after-generation plan. Let us think about this compared to 
something similar in this country, like the Irish, who moved 
from their country to this continent. They could settle down. 
But those people from Sichuan Province, from Shaanxi Province, 
they moved to Xinjiang so they could make quick money. Even 
after 15 years of making money, they call it ``quick money.'' 
They can never settle down to create their society. That gives 
them no chance to build up their self-confidence as a proper 
person, as a worker, as Robin has said, to plan the family 
future. That is the most evil thing, to make people rootless 
wherever they are working.
    Mr. Munro. Just one very quick thought also. This 
rootlessness also means that Chinese migrant workers have no 
sense of loyalty to the place where they are working, and that 
is becoming a major problem for factory owners inside China. 
Migrant workers are networking like crazy all over the country. 
If a migrant worker they know from their village who is in 
another province calls and says, ``get up here, there is a new 
factory offering better conditions,'' they will be off 
tomorrow. So there is massive turnover in the workforces in 
factories in places like Guangdong, and there is even a labor 
shortage now. This is not functional for the system. This is 
another reason why I think, for economic reasons, if nothing 
else, the government needs to seriously address these hukou 
restrictions.
    Mr. Foarde. Thank you.
    I would like to recognize, again, Celeste Helm from the 
Department of Labor. Please?
    Ms. Helm. I would like to follow with a question about 
whether there is any new information on prison labor in terms 
of how many prisoners might be engaged in making products for 
export.
    Mr. Han. Well, I am afraid at the China Labour Bulletin we 
focus on non-prison labor. We are short on energy and short on 
resources, and we are not very focused in that area. Right, 
Robin?
    Mr. Munro. Yes. I mean, I have studied this in my previous 
jobs with Human Rights Watch and Amnesty International. This 
issue got a lot of attention internationally in the early 1990s 
when there were a lot of exposes, when a lot of companies 
importing prison-labor and prison-made goods from China into 
the United States, Britain, and other countries were caught out 
by journalists, and human rights reports, and so forth. A lot 
of publicity was given to this issue at the time.
    This led the authorities in China to clamp down tightly on 
any information about these kinds of practices. I believe they 
are still going on very widely. It is getting a lot harder to 
get the information because the Chinese Government is now 
heavily sensitized to this issue and is restricting 
information.
    Mr. Foarde. Chris Mitchell, do you want to take another 
question?
    Mr. Mitchell. Do you see significant differences in working 
conditions between Chinese-owned factories and American and 
other foreign factories?
    Mr. Han. Yes, there are differences. Now it is changing. 
First of all, there are no longer state-owned enterprises. I am 
not saying there are zero, but basically, the biggest 
enterprises, like the oil fields, are on the stock market. They 
are not state-owned any more. Basically they are running, if we 
can put it that way, closer and closer to the market management 
way. But, of course, you have no organized labor to balance 
this.
    The condition, for example, about one or two months ago, we 
reported one case from Shandong Province, from the Heze Cotton 
Textile Factory. It was a very big state-owned textile factory. 
There were about 50,000 workers before. Now they have only 
5,000 or 6,000 people working there occasionally, not really 
long term. They subcontract these different work sectors to 
individuals, and these individuals become the boss of this 
sector. They produce different things using the existing 
machines. It is very funny. They call themselves boss, the 
workers call them ``boss,'' but they do not own these machines. 
The machines belong to the factories, but they subcontract 
everything and they pay a management fee to the local 
government, and then they just take all the profits.
    It is a very strange system. But they force the workers to 
work 12 hours a day, where before it was 8 hours a day, three 
shifts. Now it is two shifts every day. These workers worked 12 
hours a day, but they earned only 300 yuan to 350 yuan maximum. 
So after about a half of year of this new system being 
introduced, the workers were exhausted and they went on strike. 
We reported on this but we were not able to follow this case. 
So that is one case that reflects how the former state-owned 
enterprises are being privatized. They are treating the workers 
in a similar way as the factories in Xinjiang, where the bosses 
are from Taiwan and Hong Kong. But one difference is that these 
Hong Kong and Taiwan factories do have pressure from outside, 
which is the corporate social responsibility pressure, and you 
also have, although it is not effective, some people flying in, 
checking it out. But from these privatized, state-owned 
enterprises, nobody cares and there is no pressure at all. They 
are completely Chinese owned and managed factories.
    Mr. Munro. Yes. I think that is right. In general, I think 
the effect of the market in China and the pressures of 
globalization where Western consumers are expecting their 
China-made shoes, clothes, and toys to be cheaper every year 
nowadays, this is really exerting a downward leveling effect on 
working conditions in China across the board.
    So, as Dongfang said, the trend in both the former state-
owned enterprises and the private sector factories has been 
toward worse working conditions, lower wages, less job 
security. Across the board this is happening, and it is very 
hard to see how it can be resisted, other than by allowing 
workers freedom of association, so they can begin to negotiate 
their terms of employment and not just have them imposed by the 
market.
    To answer your question more specifically, I think, in 
general, we find the Western-invested factories in China, 
because of their codes of conduct, because of the pressure from 
the consumer movements in the West, they do tend to have better 
working conditions. That is not always the case, but conditions 
are better than in domestic or Asian-invested factories, let us 
say, in general. But that is not always the case. There is an 
example we studied a year or so ago, a factory called AXT, 
which was actually based in California, that made very advanced 
printed circuit boards using, not silicone, but gallium 
arsenide--I think I got the name right--which produces as a by-
product polychlorinated biphenyls [PCBs].
    And, what do you know? This factory from California was 
mostly hiring immigrant Chinese workers, and many of these 
workers came down with various cancers and there was a big 
investigation by the California Department of Health Services. 
Massive fines were slapped on this company because they were 
found to have very unsafe working conditions, and workers were 
absorbing this arsenic, basically, and other toxic compounds.
    How did the factory owner react? Well, it paid the fines, 
then closed down the factory and relocated to Beijing. They did 
not improve their working conditions. They did not make a 
constructive response. We have tried to find out what is 
happening in this American-owned factory in Beijing, but we 
have been unable to get that information. But we are very 
worried that they have just exported the health and safety 
problem to China, where they can get away with it.
    Mr. Foarde. Well, thank you for those answers.
    Our 90 minutes this morning have gone very quickly, as we 
expected they might. We could continue for a much longer time, 
if the time were available. But I think, in fairness to our 
panelists and our audience, we should probably bring things to 
a close.
    The reason that we have gone so quickly is due to the 
erudition and the deep knowledge and understanding of these 
issues by our two panelists. So on behalf of Chairman Chuck 
Hagel and Co-Chairman Jim Leach, and the Members of the 
Congressional-Executive Commission on China, our thanks to Han 
Dongfang and Robin Munro for coming all this way to share their 
expertise with us.
    Thanks as well to all of you in the audience who came to 
hear Han and Robin this morning, and to Celeste Helm and Chris 
Mitchell from the personal staffs of our Commissioners, and to 
my colleagues on the Commission staff.
    Please check our Web site for upcoming hearings and 
roundtables. For this morning, we will bring this roundtable to 
a close. Thank you all very much.
    [Whereupon, at 11:30 a.m. the roundtable was concluded.]