Social unrest

Wal-Mart learns limits of divide and rule in China

Wal-Mart is learning the limits of taking a "divide and rule" approach to its Chinese workforce. The US retail giant's employees in the People's Republic have staged a series of wildcat strikes, using social media to co-ordinate nationwide action. It's a reminder of the new realities facing employers in China.

The Wal-Mart strikes, which have now ended, were limited. Only 200 workers in southern Nanchang, central Chengdu and the northeast city of Harbin downed tools, and the stores stayed open. Nevertheless, thousands of employees joined a loose collection of online groups called the "Wal-Mart Chinese Workers' Association". They used WeChat, the popular messaging app, to discuss new work schedules which they fear will cut overtime pay.

Before the advent of smartphones, it was easier for large companies to impose pay deals or new working conditions on employees. Local governments anxious to boost their tax revenues often help companies find loopholes in national rules designed to protect workers. The government-backed All China Federation of Trade Unions usually sides with management.

That picture is changing as the economy stutters and China grapples with its shrinking workforce. China Labour Bulletin, a Hong Kong-based group, says the number of strikes across the country doubled to 2,774 in 2015. Workers are increasingly co-ordinating their actions across provincial borders.

It's not just foreign companies that are feeling the squeeze. In recent months, state-run telecom giant China Unicom has had to deal with nationwide labour action. So far, bureaucrats in Beijing have not cracked down. That suggests they are willing to allow limited outbursts of strike action as they focus on restructuring troubled sectors like coal and steel.

Foreign firms tend to enjoy less official protection than their Chinese peers. Multinationals have served as scapegoats for problems that beset entire industries on issues ranging from food safety to anti-monopoly rules. Labour regulations could be next. That means the likes of Wal-Mart will have to take strikers seriously.