Economic situation in China

Mostly activists groups made the world aware of the working conditions in the third world countries and those groups accused many multinational corporations with child labor usage and terrible working conditions in their factories operated abroad. This of course created some groups of customers who boycotted products of the companies who exploited children. Those accusations made impact on companies' sales and revenues. Many of multinational companies realized that good name in today's market is vital. One of the companies which were accused with child labor usage was worldwide known "McDonalds". In Hong Kong labor activists claimed that toys distributed at McDonalds restaurants in Hong Kong are made with child labor in China (CNN.com, September 5, 2000). The activist said that they had surreptitiously photographed scenes at the factories just across the border in China showing girls in their early teens working 16-to 20-hour workdays making Snoopy, Winnie-the-Pooh and Hello Kitty toys. The activists also added that live in cramped and Spartan dormitories and are paid $3 a day. After McDonalds received many calls threatening of boycott of the restaurants it issued a statement that McDonalds takes these issues very seriously. They said that their Code of Conduct for suppliers makes clear that they will not tolerate any substandard practices.

Surely it is nice to hear that multinational companies do not tolerate any "substandard" labor practices but what concerns me how they control that their practices and rules are implemented. Another question is to what extend foreign company can control the environment in their subcontractors facilities? How do they know that their subcontractors do not have other subcontractors? Manufacturing companies usually have to deal with that kind of situations in everyday business. Other big players in the world are sports industry participants such as Nike and Reebok. Which were also accused with usage of child labor and worker exploitation. However the multinational corporations' executives deny such problems are happening with business partners in China. For example, Reebok claims that they have set up the "Reebok Human Rights Production Standard" to monitor their business partners and told that they will send delegation to investigate their supplier's factories regularly. So there should be no safety problems and exploitations with their business partners (Child Labor in China, Change HKCIC - June 1996). Yes, this is what company states it would do, but I really doubt the effectiveness and the ability of the company to investigate their partners' facilities and ensure safe and fair labor practices. It would not be very difficult to set up a nice looking factory with happy workers to show for such commissions. Especially if the visits are announced this make this much easier to do for factories who get inspected to hide the real working conditions. Again, I believe that what investigators and commissions see is just the surface of the business and to dig deeper and look for all the network of suppliers is essential to start being efficient. This also arise a question, does the companies want to do that? It the networks of subcontractors are well organized and hidden and if the company cannot find violators at the same time getting quality products from their main suppliers for a low price, what is the point of looking deeper? I believe that the primary goal of such investigations is to have a good name in the market and to show public that company makes attempt to solve the problem. Anyway, after Reebok stated that it will not work with business partners that use child labor, after one of its suppliers, Nority Group, admitted that some Nority workers in Donggung factory were child workers under 16 Reebok continued to do business with them because Nority group promised to fix the problem. Those are just a couple examples from the situation of child labor in China. The belief that multinational corporations never seriously monitor their business partners seems valid. Usually when they sub-contract business to their business partners in Hong Kong, Taiwan, South Korea, they just want to avoid any criticism about their direct involvement in the exploitation of Chinese workers and Chinese children (Change HKCIC - June 1996).

Even some facts about the state of China's economy were taken from previous years, I think, it quite accurately describe the situation in the country. In current years the situation improved but it is still a long way to go until child labor will be totally eliminated.

Education

Approximately 82% of adults in China are literate, which means that most of the Chinese population has received some sort of education. 92% of Chinese children finish their primary studies. 69% percent of them go on to secondary school, and only 5.7% make it to college (http://homeport.tcs.tulane.edu). These are the statistics officially stated by Chinese government. The Chinese formal educations system consist of the following parts: early childcare in China ranges from ages 2-6. Kindergartens teach children basic skills like simple mathematics, language, music, physical education, and science. The most important role of these institutions is to instill good moral values. From kindergartens 99% of children move on to primary school. Those schools teach children moral values which are based on equality and cooperation. In primary schools just 92% reach the fifth grade. Those who complete primary school 69% go on to secondary schools that are based on preparation for college entrance examinations. The stressful atmosphere in those schools allows just 5.7% of students to reach the college. Class schedule in schools is very hard and in colleges it reaches even more challenging level. Students as young as ten years old take home an average of eight hours of work per night (http://homeport.tcs.tulane.edu, Children and Society Projects 1999). Just imagine what workload exists in colleges. Extra-curricular activities are very limited because of the workload at schools. All of the things described above taking into account just the structure of education but forget to tell the real life situation and availability of schooling. In China many rural areas have such poor facilities that schooling isn't available because of non-existence of adequate buildings. Another factor is poor teaching quality in urban areas because teachers cannot afford to teach because there are no available funds for them. Poverty is the main reason why the number of educated people is dropping. Percentages there tell a lot. Sad is the fact that just 92% of the children reach the fifth grade but what even worse is that education system in China produce just 5.7% of students who enter colleges and what number of students graduate from them is unknown. Such low percentage of students graduating will slow down China's development in the future. I assume that if China's economy is growing 11% a year it will need transfer from labor markets to the more advanced industries and in order to do that education will be a vital factor. I believe that China is changing its attitude towards education and try to improve the situation. This of course will take time but reform is necessary. Some factors as One-Child Policy should make it easier to implement efficient reforms. Considering that smaller number of population will be children and economy will have more recourses for education the situation should improve in the near future. Beside recourses people need to see the opportunities and understand the importance of education. If students after the graduation would get well paid jobs this would set an example for other generations. But first desire to seek education should come from families, which is the most influential source for the children. Government has to make parents believe in power of education and later children will be able to comprehend the importance themselves.

Health Issues

Numerous articles were published about terrible working conditions in China. Many multinational companies suffered because of those publications. But what usually was not loudly and clearly stated that in those terrible conditions work children. In a November 1991 "circular" to carious provinces and cities, the Chinese Ministry of Labor admitted that the situation regarding the employment of child laborers was "very serious" throughout the country. The circular apparently stated that exploiting children around the country became a common phenomenon (http://www.dol.gov/ilab, U.S. Department of Labor). The circular said that in some coastal areas and special economic zones, such as Fujian and Guangdong, as well as Zhejiang, Sichuan, and Hubei, there are reported to be four to five million child laborers under the age of 16. Child laborers under 12 years of age are also found in Whenzhou and some areas of Guangdong and Hainan. The real fact is that those children worked on average 10 to 14 hours a day with no days off. What impact does this have on the children? Tremendous! Most of the children who began to work in early age have a professional diseases and injuries. Most of them grew up physically and mentally undeveloped. Just the amount of time children work is damaging for their health. But the long hours of work seems to be less important comparing to the dangerous work conditions children are exposed to. A recent newspaper report detailed an explosion at a fireworks factory in Hebei killing one child and injuring 34 school girls aging from 11 to 13 years of age. Investigators found that the school children had been forced to work for slave wages making firecrackers. This accident was made public just 38 days after it occurred, but no television coverage was permitted. This fact one more time proves that the accidents made public are just the tip of the iceberg. Even those examples which we are aware of create a picture how dangerous children work conditions are. Another example describes labor conditions in garments and textiles industry. A 1993 article in the periodical Dapeng Bay reported that at Chungstan City, a foreign textile enterprise employed about 160 child laborers, and that a 14 year old was killed after her hair became tangled in the machine (http://www.dol.gov). Beside this accidental injuries and death some serious harm to the children health is done by making them work with poisonous chemicals. Some of those chemicals are prohibited and not allowable for use in U.S. but there is no laws on their usage in China. Toxic ingredients used in shoes manufacturing and children have to breath those toxins every day. Constant headaches and weakness of the bodies is a normal condition for most of the workers. In the long period of time working in those conditions damage lungs and nervous system. Those are sad facts about child labor in china. We rarely think about the products we buy and how they were manufactured. Sometimes the reason they are cheap because health of the people is not counted into the final price of the product.

I must say that companies are improving labor conditions and health of the workers is not in the last place. Political actions as well as increase of global competition make counties as well as multinational corporations to worry about their good name. The good name and positive perception of the public are very important factors in successful business operations in the long run. Companies take that into account and do what they can to assure that it satisfies at least basic safety requirements.

Government

The first it is necessary to mention that People Republic of China is One-Party State. The communist party has a control of the country. In the 1960-1970 China began a reform of economical system. At that time it began to encourage entrepreneurship and created as it called socialistic economy, which encouraged self sufficiency. This step drastically increased production in the agriculture and also gave a start to construction of a lot of small factories. At the beginning a lot of attention was drawn to agriculture which yielded more production each year. But in the 1970 when China decided to open itself to the world markets it changed its course and focused on the manufacturing for exports. Agriculture began to suffer because on unfavorable laws and this lead to the fact that majority of population had to face poverty. But this was a part of the plan to develop China's future. After China decided to create special economic zones to attract foreign investments and technology the economy started to grow at a very rapid rate. This political move made China very attractive zone to developed countries investors. Seems that the plan to open economy worked and the GDP of the China is increasing every year.

But what lies underneath this success story? China is attractive to foreign investors for a cheap labor which can be used in manufacturing. Lack of control allowed to develop exploitation of workers and, the worst, created a huge child labor population. Child labor is one of the biggest issues in China today. Chinese government hear a huge criticism about a huge population of children working. Various organizations actively seeking that government would take actions to prevent that. We have to keep in mind that China is in the transition. We have to understand that move from communist regime to free market economy is not as easy as it might seem. I believe that China in the recent years try to manage the country as well as they can. I must stress that a huge geographical area make it more difficult control the process. The law enforcement in some provinces is still not as efficient as it should be. I believe that the significant fact is that China does not ignore the problem. The laws regulating child labor are in place and they become more strict in every update of them. China has promulgated "the National Program of Action fof Children Development in China in the 1990s," prioritizing child development in the country's economic and social development, and giving stronger and all-out support to the cause of children (http://peopledaily.com). Chinese government has also issued a series of laws and regulations to provide legal protection for children's legimate rights and interestes as "the Law for the Protection of Minors", "the Law on Maternal and Child Healthcare" protection, and "the Law on Education". Beside those laws labor regulating laws for children protection were updated. The previous laws ,which stated that children can work after the compulsory education of nine years, were changed to a minimum allowable age to work which is 16 years. Under that age children are not allowed to be employed or to register any kind of business. Also, there are age restrictions on age in order to work in hazardous areas, which is 18 years of age. The penalties for employment of the children also becoming more and more strict, it ranges from penalties and cancellation of business licenses to imprisonment. We can see that the laws are in place. What concerns me is how these laws are enforced? The current situation tells us that enforcement is not as sufficient as it should be otherwise we would not have so many children working in the country. Government should think about the future of the country and make every attempt to prevent child labor which prevents development of younger generation. The fact that bribery exists and officials get paid to ignore the fact that children are exploited is the factor which has to be eliminated. This is hard to believe that the problem cannot be solved taking into account that government officials are still directly involved in many businesses. To develop as a country China has to make every attempt possible to enforce existing laws and eliminate child labor in their country.

The Role of Global Corporation in China

Many multinational corporations established operations in China. Many new factories were built there and the scope of operations for many multinational companies is still expanding. Unfortunately the increased operations require more and more labor force which is cheap and efficient. This lead to the fact that the child labor was involved into foreign operations in China. Multinational companies have to face the problem and eliminate it. Well known multinational companies such as "McDonalds", "Nike", "Reebok" were accused of usage of child labor in their products' manufacturing. After initial stage of denial companies admitted that the problem does exist. Most of them have ethical standards for their operations.