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The Toy Makers of Chenghai

It was an April mid-morning and the streets of Chenghai were humming with activity. Auto rickshaws zigzagged against the flow of traffic, motorbikes carried gravity-defying pyramids of parcels, open-topped vans overflowed with toy parts, and huge lorries were piled high with boxes for the neighbouring port or delivery across China. This administrative district of Shantou town at the eastern extremity of Guangdong province had been bustling since daybreak. The frenzied activity continued until dusk (which falls at around six), but it let up during the lunch break, from 11.30 to 1.30, often the time for a siesta. Thousands of workers then appeared and wandered off in small groups to hang out in shopping centres, sit and eat on boxes or benches, doze under the shade of a tree or play cards and dice.

During working hours they disappeared again, and it was hard to find a factory worker on the streets, or even that common sight in China: job seekers with cardboard panels showing their trades around their necks or tied to bicycle handlebars or just placed in front of them on street corners. Chenghai specialises in manufacturing children’s toys, which government officials say is the industry most affected by the global economic crisis. Officially, there are 3,000 toy factories in Chenghai; unofficially, the figure is three to four times higher.

A young woman appeared around a corner with a baby in her arms. She was wearing typical factory workers’ clothes – a pair of faded jeans, a cheap jacket, a cotton t-shirt, trainers of some unknown Chinese brand. “I’m not working at the moment because I’m minding my six-month old daughter,” she explained. Her name was Mei Lan, and she was a migrant worker from a village in Guangxi province. “My husband’s working, of course,” she continued. “I’ll have no problem finding a job again. The factories in the region need workers so badly that they don’t mind if mothers bring their children to work. Right now I prefer to look after her myself, but I’ll see when she’s old enough to go to the crèche.”

The cardboard notices and large red cloth banners hanging across the facades of most Chenghai factories appeared to confirm that. One fixed to a large newly built plant said: “We seek male and female workers in all sectors”. Another, on a smaller factory, said: “We want people who can start today”.

The officials in the vast and gloomy Chenghai municipal government building weren’t surprised. “Those ads aren’t new, some of them have been there for years,” said one, refusing to let me write down his name. “With the exception of Dongguan [see ‘Mend the roof before it rains’], the Guangdong province toy factories haven’t been as badly hit by the crisis as the foreign press has claimed. Here, some factories have been working full throttle for several months – to the point that workers couldn’t go home for Chinese New Year. The city customs people told us that exports in January and February were 18% higher than the same period in 2008. No toy factory has closed in Chenghai since the start of the crisis.”

All the factory managers and migrant workers I met confirmed this. But factory owners played it down. “Chenghai was badly hit by the international crisis and anyone who says otherwise is lying,” said Wang, who owns a small factory working out of a former warehouse. Like everyone else, he refused to tell me his full name. “Until this year, 80% of all the toys produced in this town were for export,” he said. “Most of the factories have lost international orders and suffered a slowdown. To offset that, they’re trying to focus on the Chinese market. However, the toy industry is still doing quite well. Look, I opened my factory a month ago. I wouldn’t have done that if there hadn’t been new orders.”

Another entrepreneur, the founder and boss of an import-export company called You Yi Toys, said: “In 2008 I sold 20 million items in some of my toy lines. I had to hire a great many workers to handle that, though I won’t tell you how many. Since the end of last year, the situation has got very, very hard. Right now I’ve only got 300 workers.” Behind him, people were painting the walls of his first factory. He was making the most of the fall in production to renovate it and had sent his workers to a new plant he had built two kilometres away with the profits he had made over the past few years.

Free housing and a canteen

Despite the drop in turnover, the hourly wage of the toy factory workers hasn’t fallen. “It ranges between 14 and 15 yuan an hour (.50 cents) for a four-hour work shift, with an occasional bonus for the most productive workers,” explained the director of Meihua, a worker placement agency. “The factories often provide free housing and a canteen for which the workers pay 100-120 yuan per month ($15-18), and that hasn’t really gone up in the past year, or only by a yuan or two at most. But that doesn’t mean the crisis hasn’t affected workers’ incomes. The factories that have had a drop in orders only work two shifts a day now instead of three, so wages have dropped by as much.” All the factories work seven days a week, and the fixed portion of the workers’ wage is now in the region of 900 yuan ($135) a month, compared with 1,350 yuan ($198) just a few months ago. The bonuses for the most productive workers are low.

This is what happened to Xu Hong’s pay packet. He arrived in Chenghai from a village in Henan province five months ago. He found a job and was earning between 1,300 and 1,400 yuan ($190-$206) a month. “Now my boss has just told us that because of the sharp fall in orders we have to take four or five days rest – unpaid of course. So I’ll do just that, I’ll have a rest and stroll around town for the next few days. I don’t intend to look for work elsewhere because I’m sure it will pick up again very fast. And the working conditions are pretty good there. I’m able to send 700-800 yuan ($100-$115) a month to my family back home.”

His employer provides food and board – eight workers to a nine square metre room. Not all the factory dorms are that small. “To attract and keep workers, we have to provide better living conditions than elsewhere,” John X told me in excellent English. He is a manager at Haipengda Plastic Toys and, like the others, only agreed to talk to me anonymously. “So we’ve built a new dormitory where workers are housed for free, just two or three to a room.” Behind him, 50 workers were busy over 15 rows of machines. Some were pouring the contents of huge jute sacks into funnels. The content was melted and a few seconds later, after a series of mechanical screeches, green, yellow and red plastic guns popped out of a tube. None of the workers was wearing helmets or protective clothing against the chemicals. Nor were their colleagues, seated on tiny stools controlling the quality of the goods. “To find new workers,” said John X, “we tell people working here to ask around their migrant friends or we post an ad on the door. If that doesn’t work, we go to the job shop in the city centre.”

In the last few years, the municipal authorities have set up a job centre. As one the center’s seven employees explained, jobseekers go there to fill in forms and get themselves on a list that is circulated to all the factories. They provide their names, telephone numbers and professional experience as well as the type of job they are looking for and the salary. “Very few people are laid off, factories want to keep their employees on hand in case of a surge in orders. Although salaries have remained flat and have even fallen a bit these past few months for office workers, that hasn’t been the case in the toy factories. Nobody wants to work there because it’s too hard, and the wages are low because the jobs don’t require special skills or physical strength. Look, in the first three months of this year there were 253 job offers and no applicants!” Our factory visits confirmed this: assembly lines and inspection tables were filled with very young men and women as well as women in their forties. Men of that age prefer construction work or textile industry jobs that pay closer to 3,000 yuan ($490), two or three times more than the toy factories.

Networks of migrant friends

On Saturdays the job centre is transformed into a market place. Companies pay 100 yuan for one of the 22 stands where they meet the jobseekers, who pay no fees for the privilege. All the companies present on Saturday 4 April were from the toy industry. The notice on stand No 12, held by Yuike Electronics Limited, read: “We are looking for a large number of healthy male and female workers, responsible people aged between 18 and 40. Wages range between 700 and 2,500 yuan ($100-$370). Board and lodging is provided, rooms for couples available. Our company has an internet café, a bookshop and a gym. We want our workers to have time to enjoy their leisure. Telephone 855 18 888.” One of the job centre managers, who would not give his name, admitted that few migrants used the services of the job centre, with the exception of the Saturday job market. “Here we mostly get people from Chenghai or other areas of Shantou. Migrants go directly to the factories which post up their jobs offers, or they go through their networks of migrant friends.”

That was how Feng Xu, 22, arrived in Chenghai. Two fellow villagers in Guangxi province returned home during the New Year holiday and suggested he work with them in their toy factory where they believed the conditions to be decent. “I arrived in Chenghai yesterday. Up to now I’ve been a farmer but my family needs money. I want to earn 1,300 yuan ($190) a month. I’ve got enough money to hold out for three to five days here without working, so I intend to make the most of it to rest and visit the town.” Meanwhile, he is staying with his friends in a tiny room.

Feng Xu said that most of the young men and women in his village have left their land and families to work in urban factories and construction companies. Did anyone ever return to the villages? “I heard that some migrant workers returned home for the New Year and stayed on because there was no work in the factories. But that’s not the case in our village or any of the villages in my region. Nobody would be stupid enough to go home and wait for work.”

Everyone I met said the same thing. “Some migrants returned earlier to see their families as they hadn’t been able to go home for two or three years because their factories were so busy,” explained Cui Jian, a 24 year-old worker from Henan. “Since orders slowed down this year, others went home for a few days after the official end of the New Year holiday. That’s all it was; no migrant is waiting at home, because he’s got nothing to do there – whereas he can find work almost anywhere else.” Cui Jian was adamant: “I’m not just talking about Chenghai but the rest of Guangdong province as well, and east or north China. I’ve got migrant friends everywhere in the country and we regularly exchange news about our situations and get the feel of the overall atmosphere.”

Migrant workers discuss things on the phone, like the widespread non-application of the labor contract law and the considerable reduction in their monthly incomes. The law came into effect in August 2008 and requires employers to pay contributions for their employee’s social security, unemployment and pension rights. “In Chenghai, not one company has complied with the law,” said Yuanfang, 25, from Hunan. “The central government in Beijing can’t apply its policy here. The bosses don’t care because nobody is going to come and check what they’re doing. So if I’m sick, I have to pay for everything out of my own pocket.”

Xie, the boss of a small placement agency, explained: “It’s true, the companies here aren’t afraid; they are all protected by the local and provincial government, so they don’t obey the law. Only one company does, and that’s Audley, the largest toy factory in the town. And the reason is because it produces toys for well-known foreign brands like Disney or Bandai, so their social policy is closely monitored by their foreign clients.”

The boss of a small factory freely admitted he did not pay social contributions for his employees. He got up from his desk and pointed to the factory floor: “I can’t compete with the wages and advantages of factories like Audley with their 3,000-plus employees. I’m just a dwarf next to them with my dozen workers. I only get 10 per cent margins whereas our western customers are getting at least 25 per cent. And since they know that everyone has got fewer customers at the moment, they’re putting even more pressure on prices.” He paused for breath. “And don’t forget that if costs rise in factories like mine, so will the prices to the western importer. And then you wouldn’t get such cheap toys. I wonder if every parent in your country can afford those major brand toys?” He put some water on to boil for his green tea, then returned to his desk with a small smile.

Chenghai facts and figures

Population: there are officially 800,000 inhabitants plus 500,000 migrant workers, mainly working in toy manufacturing.

Main activity: toy making; turnover 16.2bn yuans ($2.37bn) in 2008; 80% of it through exports.

Factories: 3,000 officially; 10,000 unofficially, accounting for workshops subcontracted by the big factories.

Salaries: 14-15 yuans ($2-$2.2) for a four-hour shift, or 900 yuans ($132) a month for workers who do two shifts a day; 1,350 yuans ($198) for those doing three shifts a day.

Working hours: 07.30-11.30, 13.30-17.30, 19.30-23.30.

In China

Growth: 6.1% in the first quarter of 2009; 9% in 2008; and 10.7% on average over the five-year period 2003-7.

Total exports: $1,428.5bn in 2008; 35% of GDP.

Total toy production: $12.3bn in 2008; in January 2008 8,610 enterprises were registered with Chinese customs; by December there were no more than 4,388.

Total toy exports: $8.6bn in 2008, 1.8% higher than in 2007. But this dropped by 8.6% in November 2008 and by 7.6% in December 2008; 67.1% of production is exported to the US and Europe.

Net monthly income: 397 yuan for rural workers, 1,315 yuan for urban workers.

Official urban unemployment: 4.3% in spring 2009.

Official migrant unemployment: 25 million, of whom 11 million are in the cities and 14 million are in the countryside, making 11% of the country’s 225.4 million estimated migrants.

Exchange rate: 1 US$ = (approx) 6.8 yuan

Sources: Toy Association of Chenghai; National Bureau of Statistics of China; International Monetary Fund (IMF); Organisation for Economic Cooperation and Development (OECD).

Translated by Krystyna Horko

This article appears in the JJune edition of the excellent monthly, Le Monde Diplomatique, whose English language edition can be found at mondediplo.com. This full text appears by agreement with Le Monde Diplomatique. CounterPunch features two or three articles from LMD every month.

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