Will the Foxconn Riot Signal a “Silicon Spring” in China?
A confrontation between a worker and a security guard quickly turned into a riot on 9/24, eventually involving 2000 workers and injuring 40. The plant, owned by manufacturer Foxconn, employs around 79,000 and has been under scrutiny for some time due to worker treatment. The plant closed shortly after the 9/24 incident and reopened the next day. There had been another incident, though smaller, at another Foxconn plant in June, and news of worker suicides trickling out since 2009.
Foxconn is a major supplier to Apple, and the fact that this most recent incident is tied to the launch of the iPhone 5 – and Apple’s short supply of the devices – have made market watchers wonder if the relationship between Apple and Foxconn is a healthy one.
There’s a lot to be said about Apple’s pushy practices with its suppliers. Read Jobs’ bio and you’ll soon get a picture of how his “reality distortion field” could bring about amazing results as well as crush souls.
The size and scope of the Foxconn riot says a lot about the state of China’s workers. The fact that Foxconn, which is headquartered in Taiwan, is China’s largest private sector employer. Descriptions of its largest plant in Longhua, Shenzhen (which employs between 250,000 and 400,000 workers), mirror those of company towns of the American industrial heyday.
China’s government and news agencies are particularly shadowy about this most recent incidents, as well as prior ones. The fact that there isn’t even a clear picture of how many people work at these plants makes one wonder what goes on behind the scenes. Furthermore, China’s workers are not permitted to unionize.
The size and scope of this riot have made some wonder if China might be perched for its own civilian economic revolution. Chinese wages have grown steadily, even as companies such as Foxconn make only a narrow 2.4% profit. This has caused Asian manufacturers to look elsewhere to find low-pay workers, such as in Vietnam and Cambodia.
The fact that wages are improving in China, coupled with the facts of poor working conditions in some areas and the generally souring economic picture in China, may give workers the impetus to force government to make unprecedented changes. If workers in China’s massive manufacturing sector demand change in policies in order to preserve their jobs, it’s hard to say what the Chinese government would do in response.
Personally, I’m wondering if this might be the first signs of an “Arab spring” event in China; maybe a Silicon Spring?