An Uncertain Future for Labor in Hong Kong

HONG KONG - Hong Kong's labor movement entered a new phase with the official inauguration of the independent, non-aligned Hong Kong Confederation of Trade Unions (HKCTU) in August 1990. The creation of the HKCTU reflects the growing influence of independent unions in the British colony and may signal the emergence of a democratic union movement able to play a significant role in Hong Kong's economy.

The unionization rate in Hong Kong is rising rapidly. It currently stands at just over 15 percent, up from 6 percent in 1982. Although there are no closed shops and legal protections for unions are limited, Hong Kong does allow trade unions to register with the government without excessive obstacles. In 1990, 19 new unions registered, bringing the colony's total to 481 unions with a combined membership of 416,000.

Unionization rates are much lower in multinational companies operating in Hong Kong than in locally owned and operated businesses, according to local union leaders. Exceptions include Coca-Cola and Britain's Cable and Wireless. Japanese and U.S. electronics and light manufacturing companies tend not to be unionized, though one Japanese multinational, Seiko Electronics, does have a union.

Significant obstacles have inhibited unionization in Hong Kong. Many Hong Kong families have clear, negative memories and first- hand experience of the Chinese Revolution, and, partially in reaction, have internalized the individualistic work ethic of the colony. Additionally, Hong Kong's poor welfare provisions mean that risking one's job in union activities threatens the survival of the worker and his or her family.

Although Hong Kong's recent prosperity has resulted in improvements in workers' living conditions, making the need for unions seem less compelling, an increasingly liberal political climate and growing income disparities have contributed to Hong Kong unions' growth. Political upheavals--such as anti- government riots initiated by pro-Beijing forces that included unions, during China's Cultural Revolution in the 1960s-- resulted in strict controls over political activity, including trade union activism and demonstrations. But political restrictions gradually loosened, fostered in part by stable economic growth. Given the political space to organize and spurred by a growing polarization of wealth, workers are beginning to look to unions to defend their economic interests.

The hand-over

Dominating the agenda of unions and all other political actors in the colony is the impending hand-over of Hong Kong from the United Kingdom to the People's Republic of China (PRC). On June 30, 1997, Hong Kong will become a semi-autonomous region (SAR) of the PRC.

While many of Hong Kong's wealthier citizens, business owners and professionals in particular, are emigrating or arranging to do so later, most working people have no such option. They have little choice but to wait and see how Hong Kong will be administered as a semi-autonomous region.

Under a 1984 agreement reached between the British and Chinese governments, Hong Kong is "guaranteed" its present capitalist economy and "way of life" for at least 50 years after the transition, and will be administered by its own SAR government with only matters of foreign affairs and national security being decided in Beijing. But many Hong Kong citizens, including trade unionists, are not comforted by these assurances.

Legislative Councillor Szeto Wah, former president and now vice president of the Professional Teachers' Union, says China will be able to interfere with and manipulate Hong Kong legislation since it will hold the power to interpret Hong Kong's post-1997 "Basic Law." Szeto Wah believes that "It will not be a political system which safeguards human rights or trade union rights."

As June 1997 draws closer, the Chinese government has done little to make Hong Kong workers feel secure about their future. The June 1989 massacre that crushed China's democracy movement as well as hundreds of smaller events and statements from Beijing have only served to heighten feelings of anxiety and mistrust. As recently as February 1991, aging leader Deng Xiaoping announced that certain organizations in Hong Kong that advocate democracy would become illegal.

One civil service unionist, requesting anonymity, says, "[On paper], China's constitution and laws allow for the formation of trade unions, which simply have to register [with the government]. But look what happened to the leaders of the [Chinese workers'] independent federations. How can we trust a government which shoots or imprisons workers even when they are acting within the laws and constitution? It's not a good sign. We don't know what they might do, which is why Hong Kong people feel insecure. We just don't know." Union leaders fear that the severity of China's crackdown on Workers' Autonomous Federations may signal that independent unions will not be allowed to survive in a post-1997 Hong Kong.

Split allegiances

Unions are trying to use the period preceding the hand-over to enlarge their bases and establish fundamental ground rules and union rights.

Three factions of the labor movement are competing to attract workers. The Hong Kong Federation of Trade Unions (FTU), the colony's largest, is a pro-Beijing alliance, claiming an official membership of about 174,000 workers from 81 affiliated unions. Most of its members are blue-collar workers, concentrated in shipyards, textile mills, transport, public utilities, printing and construction. The FTU appeals to Chinese nationalists and anti-colonialists. The second major grouping is the more than 100,000-strong, independent HKCTU, whose 26 member unions predominantly represent workers in the public service sector, such as teachers and social workers, and in service industries such as hotels, catering and transport. A third and much smaller group is the pro-Taiwan Council of Labour Unions (CLU), whose roughly 18,000 members are predominantly blue- collar workers in catering and building. CLU members tend to be from families which supported the Kuomingtang during the Chinese revolutionary and post-revolutionary periods. While the HKCTU is growing in size and strength, both the FTU and the CLU are experiencing a drop in numbers as more workers appear to want to avoid groups aligned with either the Chinese or Taiwanese governments.

With the gradual withering of the pro-Taiwan CLU, effectively there remain two rival federations in Hong Kong. Their rivalry resembles that which existed between the Chinese government and the Communist Party-dominated All China Federation of Trade Unions on the one hand and the Workers' Autonomous Federation on the other in China's 1989 democracy movement. The two federations are competing to win the allegiance of non- affiliated unions, which had a total membership of nearly 150,000 at the end of 1989, as well as international recognition from overseas federations and international labor organizations. The HKCTU seems to be having more success in courting non-affiliated unions.

The federations offer substantially different options to workers. The FTU's policies echo those of the PRC government,and the federation is widely held to receive financial and logistical support from Beijing. And, while no part of the Hong Kong labor movement is militant by international standards, the FTU is particularly docile. In 1989, during a period of concern over the high rate of fatal accidents in the construction industry, for example, Poon To-chuen, chairman of the Construction Industry Employees General Union, an FTU affiliate, said he would not name companies with bad health and safety records because "it would embarrass the companies." He continued, "I really don't want to tell you which are the worst companies; they wouldn't like that." When asked what his union was doing, he replied, "We have an annual picnic to encourage safety and we give an annual award of Maple Leaf gold coins to the best three workers in the safety field."

By comparison, the HKCTU is aggressive. It places great importance on establishing fundamental union rights and conditions in Hong Kong and is willing to mount protests on labor issues as well as broader social questions. HKCTU chair Lau Chin-shek, speaking at the federation's inauguration ceremony, said, "As an alliance formed by independent unions, the HKCTU's primary task is to assist workers in organizing unions. We firmly believe that in a capitalist society, workers must exercise their collective strength and bargaining in order to achieve better rewards, fairer distribution of wealth and more democratic labor relations."

Union action

The government follows a principle it describes as "positive non-intervention" which, loosely defined, means actively avoiding interference in private corporate matters and adopting a low profile in labor disputes. Thus, there is little direct government interference in union activities, but little government enforcement of laws to protect unionists either. Unions also complain that there are numerous shortcomings in legal protections for workers. Among the most serious grievances are those relating to the lack of any central retirement fund; poor legal protection for unfair dismissals, part-time workers and subcontracted workers; and inadequate, outdated health and safety legislation.

Strikes and other forms of union action are not common in Hong Kong, as the government is keen to boast when luring investors. In 1989, there were only seven "work stoppages," according to government reports, with Labor Department conciliation resolving 130 trade union disputes.

Strikes are as frequently aimed at the government as they are at corporations, especially since the HKCTU-affiliated civil- service unions have taken more actions than private-sector unions.

Until recently, most grievances expressed by large civil-service unions related to wages and conditions of service. In 1990, for example, firefighters belonging to the Fire Service Employees General Union threatened industrial action after negotiations, which began in 1983, failed to reduce working hours from a 60- to a 48-hour week. The government refused to make concessions, however, until a three-day hunger strike won an agreement to progressively reduce working hours, with an initial reduction to 54.

In 1990, some labor protests took on greater political overtones after the government threatened to invoke the Letters Patent, an old colonial statute which confers enormous power on the governor, and dismiss employees in response to proposed strikes by four postal unions.

The threatened use of the Letters Patent sparked international as well as local outrage. The 750,000-member British National and Local Government Officers' Association (NALGO) described the antiquated law as "violating civil liberties." The chairman of the Union of Hong Kong Postal Employees said in October 1990 that the union was "offended and angry that the Government would resort to such authoritarian and uncivilized action against the union."

Importing labor, exporting capital

Along with the sometimes overbearing weight of issues related to the 1997 transfer of sovereignty, Hong Kong unions have plenty of immediate problems to deal with. Efforts by businesses to bring workers into the colony and to ship capital out pose a dual threat to the Hong Kong labor force.

Over the past two years, employers have complained of a lack of labor in some sectors and the government has subsequently permitted the importation of 3,000 technical workers in 1989 and 2,700 skilled and 12,000 semi-skilled workers in 1990. Unionists, who contest both the labor-shortage claims of employers and the rationale for importing labor adopted by the government, began holding protests outside the legislative chamber and petitioning the government in July 1990.

Trade unions argue that the labor importation moves are motivated by companies' desire to push wages down. The colony has no minimum-wage law, and workers object to business efforts to undercut the wage levels they have attained as a by-product of Hong Kong's prosperity. Unionists say that the importation of workers has contributed to increases in Hong Kong's unemployment rate, under-employment rate and inflation rate and a fall in the rate of real wage increases. To protect the viability of Hong Kong's economy, a HKCTU statement argues, "It is necessary to extend the shift from low-skilled to technologically advanced production in order to compete effectively with neighboring Asian countries which manufacture light consumer products requiring unskilled labor-intensive processes."

The effect of the imported labor is felt at a time when Hong Kong's economy is growing weaker. Hong Kong unionists are particularly concerned by a continuing fall in business associated with the June 1989 massacre in Beijing (tourism, a multi-billion dollar business, is Hong Kong's third largest sector after textiles and electronics), and the general global recession, which is significantly affecting the colony's economy because of its high dependence on international trade and finance. Economists predict that Hong Kong's unemployment rate, which has historically hovered between 1 and 3 percent, will rise 1 or 2 percentage points in 1991.

The vulnerability of Hong Kong's economy is further aggravated by a drift of capital out of the colony. The primary cause of this capital flight is the uncertain political climate of post-1997 Hong Kong. By abandoning Hong Kong in spirit, two corporate giants, Jardine Matheson Holdins, Ltd. and the Hongkong Bank (along with scores of smaller companies), reveal grave doubts about Hong Kong's economic survival under mainland rule. The former, in Hong Kong since 1841, has applied for a primary listing on the London stock exchange, after changing its place of incorporation to Bermuda in 1984. The Hongkong bank has become a subsidiary of a British-based holding company.

Additionally, many manufacturers say that improving economic conditions in Hong Kong have caught up with them and that they must find cheaper labor, often just across the border in China. Some factories have also moved to China to avoid new health and safety and environmental laws in Hong Kong.

Plant closings have been particularly prevalent in the textile industry. In 1989, for example, a major weaving and dyeing factory moved its operations over the border to Guangszhou in southern China after Hong Kong pollution laws were strengthened and government fines imposed. A survey carried out by the Clothing Workers' General Union in March and April 1990 showed that "over 50 percent of respondents were underemployed because production had been relocated to China." Fearing complete job loss, the workers expressed demands for amendments to laws governing severance pay.

Complex challenges

The next several years will be an important testing ground for the development of democratic unionism in a society that is less than democratic. It will also be a challenge to non-aligned unions to show vision and political maturity in confronting a myriad of complex challenges.

DerekHall researches and writes on labor issues in Asia for the Hong Kong-based Asia Monitor Resource Center, a non-profit research and labor education organization.