RUDOLF TRAUB-MERZ| WAGE STRIKES AND TRADE UNIONS IN CHINA The twelfth Five-Year Plan(2011-2015) in principle rec­ognises the need for a change of course and speaks of inclusive growth, accelerate expansion of the welfare state and a significant increase in minimum wages. 33 As with earlier Five-Year Plans these promises must be ta­ken with a pinch of salt(Schucher 2011). However, resis­tance is growing to abuses in society and social pressure for change is building up. The government is particularly concerned by the rapid increase in the number of mass protests, 34 which raises the spectre of political instability. Beijing has reacted with two different strategies. Little remains of the willingness to engage in cautious politi­cal liberalisation – for example, the extension of direct elections – since the»Orange revolutions« in Ukraine and Kyrgyzstan or the political unrest in Lhasa in 2008. Recently, the state has cracked down hard on dissidents and their demands for political freedom and pluralism. 35 The Party is taking a different approach to social dissent. While previously their reaction was repressive, pettymin­ded and legalistic, the political and administrative cadres now have to tread more carefully in response to socially motivated unrest. If protests lead to serious clashes with the state authorities the responsible cadres can count on demotion or even expulsion from the Party. 36 The state reacts harshly against political dissidents, but in the case of social unrest it is ready to talk and to compromise, and seeks peaceful solutions. 6. Trade Unions and Wages – Trends and Development What does this social and political upheaval mean for trade unions and wages? The way in which municipal authorities dealt with wage strikes in 2010 differs sharply from the political response to workers’ protests in earlier 33. All rural dwellers, as well as 357 million urban dwellers are to receive retirement benefit; minimum wages are to increase by at least 13 per cent a year(information from Chinese Embassy in Germany 2011). 34. Until 2006 the government published annually figure on so-called ›mass incidents‹(violent clashes involving three persons at least). In 1993, the figure was 8,700, it increased to 87,000 in 2005. No differentiation according to causes is considered. A majority of cases appear to be linked to environmental offenses, corruption and infringements of labour rights. 35. The Economist’s judgement was unambiguous:»the latest crack­down on political dissent certainly constitutes the worst since Tiananmen Square in 1989 and its aftermath«( The Economist, 16-22 April 2011: 9). 36. When for days the media reported on unrest in Weng’an district in Guizhou province, where in June 2008 20,000 residents clashed vi­olently with the police over the death of a youth, the Party leadership felt compelled to dismiss the local Party secretary, administration head and police chief. years. 37 They mainly passed without incident and ended with(wage) negotiations rather than police action. Even the trade unions insisted on a peaceful(negotiated) so­lution in several instances in which the municipal author­ities were pushing for a rapid end to the strike. 38 A number of key factors are responsible for a turning of the tide with regard to wage development: the state is no longer – or no longer to the same extent – taking a re­pressive approach to striking workers, demographic fac­tors are shifting the balance in favour of the workforce and second-generation migrant workers are seeking an urban lifestyle. The question of specific implemen­tation mechanisms remains open. Four different possi­bilities suggest themselves.(i) Companies will react to labour shortages and fluctuations with wage increases. (ii) The state will conduct an aggressive minimum wage policy to put pressure on the wage structure from below and support this with its annual wage directives. (iii) Trade unions will become collective bargaining part­ners and manage to push through wage increases in line with inflation and productivity development, and with elements of redistribution enabling workers’ wages to catch up.(iv) There will be a repeat of 2010, with seri­ous wage negotiations coming only after walkouts and wildcat strikes determining wage development. In order to avoid conflict companies which have not yet experi­enced strikes will accept negotiated wage adjustments. ACFTU hopes to acquire a legal monopoly with regard to wage negotiations that workers will respect. This is unlikely. Operating under the supervision of the Party it cannot become an actor in the conflict; and if the enter­prise trade unions do not obtain operational autonomy they cannot commit themselves to workers’ interests and negotiate in their name. Spontaneous walkouts could increase in the future. With regard to the organisation of new labour relations the key question should be whether elected strike commit­tees allow themselves to be integrated into discussions via existing trade unions or demand free elections and independent enterprise trade unions committed to the workforce. There has been nothing to indicate so far that the Party would be willing to tolerate such a devel­37. On the nature of previous conflicts see, for example, Anita Chan(2011), which describes the differences between China and Vietnam. 38. Lectures on strike action at a conference in Guangzhou in April 2011 (see footnote 1). 10