Chinese Labour Laws breached? Money talks louder in the PRC

It was National Semiconductor that led the way in outsourcing manufacturing abroad, and where NatSemi led, others were swift to follow. That became a flood in the first decade of this century – earlier this week Microsoft decided to outsource a chunk of support to Indian company Infosys. The news later this week that Chinese workers at a KYE factory were treated almost like prisoners making mice for Microsoft doesn’t really come as much of a surprise.

According to the National Labor Committee, it’s not just Microsoft that is a customer of KYE – HP, Best Buy, Samsung, Foxconn, Acer, Logitech and Asus all use its services. In fact, most Taiwanese companies that formerly built products on the island now do so in mainland China.

It’s not fraternity that drives the impulse to build in mainland China, it’s a combination of cost and shabby labour laws that do little or nothing to protect workers.

While China passed laws a few years ago that on the face of it were intended to protect its workers, this legislation is toothless, hypocritical and intended just to present the Chinese government abroad as a caring creature that really cares about its citizens.  What’s shabbier, of course, is that vendors using mainland China factories are well aware of the conditions that people are made to work under, but gloss them with codes of conduct that are essentially meaningless. Meaningless in China, that is, but not in the USA or other western countries.

The vendors themselves are driven by an insatiable need to cut costs at any price, to stay competitive and to keep their shareholders happy. Considerations about employee conditions in a far away country are of little importance to multinational corporations. Corporations, by and large,  are not individuals and they don’t have feelings. They’re the equivalent of sociopaths and, like them, offer a pretence of being caring and sharing, bolstered by glossy brochures, big public relations outfits and connections with governments at the highest levels.

And of course the PRC, a totalitarian centrally controlled communist state, is not exactly known for its focus on human rights either.  It’s currently investing very heavily in African countries, mostly because that way it gets to control a large chunk of world commodities. And more interestingly, it’s actively “encouraging” its own citizens to emigrate to those countries too. Chinese immigration into African countries is a hot topic in some of those countries, whose citizens, of course, are in many cases far worse off than the teenagers in the KYE factory.

Check out this article, The Next Empire, in the May issue of The Atlantic. Unlike US corporations, constrained by quarterly results, the Chinese government thinks long term. Very long term.

The only way that the multinationals can be called to account is in their own countries, and through a political process. That relies on a healthy democratic process but even that’s compromised in the 21st century. Many large US multinationals have lobbying offices close to Washington DC. Big business can get the ear of a politician far more readily than John or Jane Doe. As we’ve seen in the UK over the last year or so, many politicians are more than happy to have their snout in the corporate trough.

It takes an honest politician – is that an oxymoron – to take the multinationals to task about their practices abroad. Is that seriously ever going to happen?