US labor laws to blame, not Fuyao management

By Mei Xinyu Source:Global Times Published: 2017/6/15 22:38:39

Illustration: Luo Xuan/GT

Chinese company Fuyao Glass Industry Group is facing industrial action by the United Automobile Workers union at its plant in Ohio, US, according to a recent report by The New York Times. I'm not surprised to hear the news. No matter whether it concerns foreign direct investment or simple exports of goods or engineering contracting, labor disputes have long been one of the biggest challenges facing Chinese companies in overseas markets, regardless of whether they are in developed countries like the US or in developing countries like Peru, Zambia or Cambodia.

Meeting the reasonable demands of employees, as well as other issues, are essential for dealing with labor relations overseas. But the primary task is to justify the Chinese model so as to have the upper hand theoretically and morally or Chinese companies won't be able to reverse the awkward situation.

For years, the mainstream Western media has portrayed China's economic development model as offering "low wages, low welfare and no protection for employees." Correspondingly, labor relations disputes that Chinese companies have encountered overseas are generally regarded as being the fault of the Chinese companies. However, the fact is that Chinese companies and Chinese manufacturing are not synonymous with "low technology" or offering unreasonably poor treatment. Many of the cases of labor friction encountered by Chinese companies in overseas markets have resulted from a clash between the advanced, efficient Chinese model and the outdated, inefficient model of the host country, as well as between hardworking Chinese people and some lazy locals. The correct approach should not be to condemn the advanced, efficient and diligent and force them to be outdated, inefficient and lazy, but rather the opposite.

Under the current system, the US labor unions have a say in the hiring of employees, but do not need to bear the obligation of providing employees with the appropriate knowledge and training, resulting in a drag on the work efficiency of Chinese investors or partners. Moreover, under the current labor remuneration system of US manufacturing companies, wages are calculated based on the working hours and the type of work, and not workload completion, leading to generally low work efficiency. It is also unusual to see employees working overtime to fulfill the production tasks as soon as possible. Moreover, under the current union system in the US, what a labor union does is to protect employees' "right" to lie down on the job.

Why have the American automobile and steel industries declined? The labor union organizations of these industries are to blame, including the United Automobile Workers. Therefore, I have repeatedly emphasized that I would be happy to see "Trump economics" work, for only when the US obtains a solid foundation and macroeconomic stability can we securely develop the market in the long run. However, it is Trump's innovations in the American welfare system and trade unionism that will decide whether his plans will succeed. It is precisely because overseas Chinese enterprises have encountered so many conflicts like this that I feel it is hard to agree that it can be the fault of Fuyao Glass. I hope that "Uncle Sam" can calm down and reform the outdated regulations in its labor laws and trade union system.

Germany would not have seen better economic performance without former chancellor Gerhard Schroeder's reform of the country's labor laws and regulations at the expense of his own political career. New French President Emmanuel Macron has also vigorously promoted labor law reform. So, from the US to India, can those countries wooing Chinese investment learn from these lessons?

The author is a research fellow with the Chinese Academy of International Trade and Economic Cooperation.


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