China labor straining neighborly ties
By Peter J Brown
Vietnam's government recently estimated that fewer than half of the 50,000 or
more foreign workers in the country held valid work permits. As the number of
foreign workers arriving from China multiplies, Vietnam, in particular, and
other Southeast Asian countries are walking a tightrope in balancing local
criticism of the influx while maintaining lucrative investment ties with
Beijing.
More than 2,000 Chinese workers are expected to be imported to work at a big
new bauxite mining project in Vietnam's Central Highlands region. The estimated
US$15 billion project involves Chinalco, a Chinese government-controlled mining
giant, working under contract to a Vietnamese mining consortium known as
Vinacomin.
The project, and the fact that as many as 500 Chinese workers
are already employed at a bauxite mine in a neighboring province, has led to an
outcry from many unemployed Vietnamese suffering from the global economic
downturn. The campaign against the project is using the Internet to express
dissent while bloggers and other nationalistic commentators challenge the
government's decision to allow the project to go forward.
Similar complaints have been heard in countries such as Myanmar, Cambodia and
Laos, where Chinese workers have been exported to work on China-invested
projects. Some experts say the migration of Chinese workers to Southeast Asian
countries is a growing and potentially volatile trend.
However, there is a modern twist to the old outward Chinese migration story,
according to Patrick Keefe, a fellow at Washington's The Century Foundation and
author of The Snakehead: An Epic Tale of the Chinatown Underworld and the
American Dream, a new book on Chinese human smuggling and labor
migration.
"Labor migrants have left China and settled throughout Southeast Asia, seeking
better opportunities in difficult times and creating burgeoning and
long-standing communities. But historically the migration was a fairly ad hoc
process," said Keefe in an interview. "If a new generation of migrants is being
ushered into countries like Vietnam in the context of specific Chinese
investment projects, that certainly poses a series of novel challenges for the
governments in question."
Keefe describes China's labor market as "exquisitely responsive to economic
conditions, both inside and outside China ... Since the advent of the current
global recession, we have seen a huge internal migration in China, with migrant
workers leaving the coastal boomtowns and heading back to their ancestral
villages. It seems likely that many others will leave China altogether, trying
their luck in countries like Vietnam."
When the Vietnamese government announced in June that 200 Chinese workers
employed at the construction site of a new cement plant in Bien Hoa province
had been fined and deported, some anticipated a diplomatic response or backlash
from China.
According to John Walsh, an expert on Asian labor trends and migration at
Shinawatra University in Bangkok, the issue of growing outward Chinese
migration is a predicament for the region's foreign investment-starved
governments and slowing economies.
"It will certainly intensify as and when overseas Chinese settle in Southeast
Asia - as many seem to want to do - and then create cross-border relationships
of their own," said Walsh. "Reluctant as I am to generalize, I would say that
anti-Chinese sentiment remains quite close beneath the surface."
"The Vietnamese remember the 1979 war [with China] and the history of
imperialism. As the economy worsens, these prejudices are likely to become more
important. Populists might fan the flames, too. The long history of enmity
between the two countries is relevant," said Walsh. Resentment generated by
Chinese migrants is springing up in the most unlikely places, even in Singapore
"since they are considered not to speak English properly, or at all, and [to
be] a bit boorish," he added.
The exodus is not being driven only by the global economic downturn; the
closure of foreign-owned Chinese factories due to rising labor costs set the
wave in motion before the first signs of crisis in 2007. Earnings of Vietnamese
workers, in comparison, are on average half those of their Chinese industrial
counterparts, and high inflation and an unfavorable exchange rate have closed
many factory doors and driven a growing number of Chinese workers in search of
overseas opportunities.
One German entrepreneur who began shifting his production base from China to
Vietnam told Spiegel Online that "the worst thing in China is uncertainty",
pointing to the unpredictability of Chinese officials and fluctuations in tax
rates on an almost yearly basis as undermining his ability to make long-term
business plans. Thus the erosion of China's industrial base was arguably well
underway before the bottom dropped out of global export markets.
"It certainly seems to be true that outwards migration of Chinese workers seems
to be increasing. In Burma [Myanmar] and Laos - also Cambodia to a lesser
extent - there are hundreds of thousands of Chinese workers building
infrastructure, ports, roads, factories and so forth," said Walsh. "Vietnam is
slightly different in that it features, at least to some extent, official
Chinese overseas ventures in a country which has more power vis-a-vis overseas
investment - hence the repatriations."
Enormous implications
The implications both for China and neighboring countries of this
outward-looking mobile work force could be enormous. "The arrival of thousands
of single and effectively single Chinese workers has obvious social impacts,"
said Walsh. "As for China, it is an extension of both hard and soft power.
Within a decade, it will have an impact on the prevalence of mainland Chinese
pop culture. It might even supplant Korean pop culture which, here in Thailand,
is extremely hot these days."
Jennifer Richmond, the China director at the Texas-based global intelligence
company Stratfor, takes a different view on the "soft power" dimension of
Chinese migration. "Unemployment is the Chinese central government's biggest
fear. It leads to social instability, and that threatens the state," said
Richmond.
"As a result, China is pushing its energy-related industries overseas in search
of new resources. This has spurred not only energy companies, but also other
sectors to search for profitable ventures overseas to boost sagging demand at
home," Richmond said. "As part of this push, the government and companies would
prefer to employ Chinese workers to help address the growing unemployment
problem at home."
Chinese business management practices play a role too. "Companies want to
ensure that their investments are being managed according to their particular
designs. Chinese companies are also known for employing their own personnel to
mitigate the risk of misunderstanding - both linguistic and cultural - in
addition to deflecting any social tensions that may arise from varying
cross-cultural business practices," said Richmond.
While some might question whether China has really promoted its overseas
expansion with no strings attached, Richmond contends that China invests
without imposing political qualifications - unlike many Western countries.
"China thought that this would make them immune to internal political battles
within the countries [they invest]. They are finding that their employees face
many difficulties and discriminations nevertheless," said Richmond.
She cites in particular that Chinese workers have recently faced tensions at a
mine in Papua New Guinea operated by a Chinese company, where local employees
clashed violently with Chinese employees after complaints about discrimination
went unheeded. Richmond also notes that in Africa Chinese employees have been
kidnapped by groups embroiled in domestic political battles, which often came
as a surprise to the Chinese, who remained neutral on internal political
matters.
Whether that volatility intensifies in neighboring Southeast Asia, where China
has invested heavily in commercial diplomacy, is a wildcard, particularly in
countries that have witnessed outbreaks of anti-Chinese violence in the past.
One recent violent confrontation earlier this year involved Cambodian security
guards, who apparently opened fire on more than 100 Chinese construction
workers protesting in front of the Chinese embassy in Phnom Penh. The workers
were upset because their bosses abruptly left the country without paying them
for six months. The incident has to some degree complicated the two countries'
burgeoning bilateral ties.
Richmond believes the growing influx of Chinese workers is "leaving
policy-makers in a bind".
"It can be expected that negotiations that strike a balance between investment
and the number of Chinese employees involved will intensify, as will
protectionist sentiment, which is already notably on the rise throughout the
world," she said. "The problem is that China is currently one of the few
countries that have the money to invest at the moment, biasing any negotiations
in their favor."
So far there has been no official Chinese response to the outward migration
fanning across the region. "There has not been an acknowledged 'official'
response. The response will depend on the nature of the investment, and the
companies investing, as well as their relationship with the central
government," said Richmond.
"Officially, the Chinese are pushing domestic companies overseas. This is a
priority, and to this end they have made several policies that ease domestic
Chinese companies access to resources and foreign exchange that promotes
overseas investments."
In Vietnam, the communist party-led government realizes that it can no longer
ignore legal and illegal Chinese labor migration without suffering domestic
political consequences.
There is also rising criticism across the region as Chinese industrial
investments are viewed as environmentally destructive in both remote areas and
major population centers. For these reasons, Southeast Asian governments are no
doubt monitoring how exactly Hanoi strikes a balance between fostering stronger
economic ties with China while responding to mounting popular pressure to stem
the tide of Chinese migration.
Peter J Brown, a freelance writer from Maine USA, is a frequent
contributor to Asia Times Online.
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