Child Labour in China's Informalized Urban Industrial Sector

Issue No. 66-67 January- June 2008

Child workers are a clear example of the precarious labour that exists in the informal economy. Laws about minimum working age make it illegal for them to work, but economic and social realities leave them little other choice. The result is that children under the legal working age continue to work, but in precarious conditions beyond the scope of government regulation.¹

While the rotten working conditions endured by the Chinese industrial workforce are known across the Western world, industrial child labour has not been seen as a big problem compared to China’s neighbours like India, Pakistan and parts of Southeast Asia. But is this changing? How has informalization affected the prevalence of child labour in China? Are labour shortages in South China exacerbating the problem in that region?

In order to investigate the situation of child workers in the southern Chinese city of Shenzhen, a labour rights NGO called the Shenzhen Workers’ Self-help Association carried out a survey of 37 privately-owned factories. It discovered child workers in 54 per cent of the random sample of 37 factories. A massive 200 child workers were found in one factory alone! Indeed this snapshot research clearly suggests that child workers are common in Shenzhen, working most often in small factories, and/or in factories with relatively poor working conditions. Legislative restrictions of child labour have not removed the problem from Shenzhen, but merely pushed it into less formal and poorly regulated workplaces.

China’s legal framework prohibiting child workers

China, in theory, has rigorous legal restrictions on the employment of children, but these laws are poorly enforced. China’s minimum age for employment is set at 16 – relatively high compared to other countries. Workers aged 16 to 18 years also qualify as ‘underage workers’ (weichengnian gong) but can be legally employed. They are, however, entitled to special protection according to the law, including exemption from night shifts and particularly dangerous work as classified by government standards.² In 1999, China signed on to ILO Minimum Age Convention No.183, and then to No.182 on the Worst Forms of Child Labor in 2002.

There is one main loop-hole, through which some employers recruit child workers on so-called ‘work-study’ or internship programmes. These programmes are supposed to provide students with work experience, but instead are often used by employers to justify illegally low wages, or used as a money-making strategy by schools that take introduction fees, a cut of students’ wages, or levy school fees without actually teaching students anything. According to outdated legislation from the era of government job allocation, students involved in ‘work-study’ are not considered to be in an ‘employment relationship’, and therefore some argue that the Labour Law and other work-related legislation do not apply to them.³ This is a legal grey area; nonetheless, local governments in many areas of China have removed large number of under-16s from factories where they had been working through arrangements with their schools.⁴

The prohibition against under-16s entering the workforce are poorly enforced. Often low-level government officials themselves are complicit in violations of the law, turning a blind eye to child workers or blatantly colluding with them (see brick kiln case below). AMRC has long argued that bans on child labour alone do not keep children out of paid work. A succinct summary of this argument can be found in AMRC’s Asia Pacific Labour Law Review 1999, which argues that through legal prohibitions on child labour in Asia’s developing countries:

‘child employment was not eliminated, but simply moved from the formal to the non-formal sector… By forcing children into the informal sector, child labour legislation paradoxically makes it harder to protect working children. If it is illegal, little can be done to improve it.’⁵

Child workers in China: a general overview

Child workers undoubtedly exist in China, but observers disagree as to the severity of the problem. The ILO judges that China’s child workers are not an endemic problem, but rather form ‘isolated pockets’ of the country’s workforce.⁶ But, in fact, is it becoming increasingly clear that, in the words of Professor Hu Jindou at the Beijing University of Technology, ‘child labour is far from an isolated phenomenon. It is rooted deeply in today’s reality’.⁷ Precise assessment of the problem is hindered by a lack of reliable statistics.

The issue of child labour is linked inseparably to poverty and education. Most child workers come from poor, rural areas in China’s central and Western provinces, where the standard of education is low.

Child workers use three main ways to find jobs as migrant workers in Shenzhen’s factories. Most commonly they are introduced to a company by relatives or friends already working in Shenzhen. Alternatively, they are illegally introduced to employers through commercial job agencies that often charge high fees, ranging from several hundred up to even 2,000 RMB. In both cases, they often conceal their real age with false documents. Thirdly, some children under 16 are employed while they are still students, through ‘work-study’ programmes (mentioned on page 12).

There are also reports of organized child labour rings through which children are sometimes brought to work through fraud, coercion or abduction. Two particularly alarming cases have brought the issue to light recently. One was the discovery of slave workers in ghastly conditions in brickyards of Shanxi and Henan provinces in June 2007. In these kilns were cases of particular brutality. Many workers were under 16 and/or mentally handicapped. Some were disciplined in unusually cruel fashion, being beaten or burned with hot bricks by their supervisors. In the worst case, one worker was buried alive after being beaten by a supervisor. In Shanxi alone, up to 109 minors were removed from such worksites by local government.⁸ The brick manufacturing industry is very poorly regulated in China’s inland. In Shanxi’s Hongdong county alone (where the first June 2007 case of brick kiln slavery was uncovered), 95 per cent of the 93 brick kilns in operation in mid-2007 had no government license, yet is clear that many operated with the knowledge or even direct involvement of local government officials.⁹ Many officials were dismissed and even prosecuted for their involvement.

The other major recent case was the discovery of a well-organized child labour trading network which recruited children as young as ten from poor rural areas of Sichuan, populated largely by ethnic minorities, to work in Guangdong province. Once discovered by journalists, local government removed more than 100 children from factories in the city of Dongguan, but organizers of this child labour trade told journalists that they had channeled hundreds more.¹⁰

Informalization in China and its impact on child labour

China’s experience of informalization – at least in the urban, industrial sector – has been a decline in permanent employment, social security, government enforcement of labour standards and trade union representation (although the All-China Federation of Trade Unions can hardly be described as a representative of workers). Most importantly, the dismantling of the command economy has meant the mass privatization of production and labour relations.

The former command economy (1949 to 1978) was certainly not without informal labour. Temporary and seasonal workers were employed alongside permanent employees in state-owned enterprises, but with significantly inferior conditions. Like today’s migrant workforce, most were people with rural registration (hukou), for whom it was virtually impossible to get permanent, formal jobs reserved for their urban counterparts. But beginning in the 1980s, the system of state allocation of jobs was replaced with a labour market, and permanent employment with cradle-to-grave social security gave way to fixed-term employment contracts (introduced in 1987). At the same time, the resurgence of private enterprises, including foreign investment, created new job opportunities under significantly less formal conditions than the state sector.¹¹ Economic reform set the stage for an increase in the employment of children (at least in urban manufacturing sectors). The poorly regulated growth of private enterprises, in particular, has provided illegal employment for many under-16s. This question of whether and how much child labour has increased is not well researched, but both Chinese and foreign sources have observed an increase in recent years.¹² The use of child labour may be intensified now in coastal cities such as Shenzhen which have been facing labour shortages for several years.

Child workers are thought to be concentrated in small factories, rural and home-based industries, engaged predominantly in toy manufacturing, textiles and apparel, construction, food production, light mechanics, fireworks and street vending.¹³ Child workers are more likely to end up in smaller enterprises, which are less likely to be subject to inspections. They most commonly work for employers who do not care about or rigorously check employees’ ages.

Nonetheless child workers are frequently discovered in state factories, large private factories, and even in supply factories for Western brand companies who claim to have zero tolerance for child labour. For example, in August 2006 a group of 86 child workers as young as 12 were organized by their high school teacher to work 10-15 hours a day at a fruit-processing factory in Ningbo city.¹⁴ This was no small, dingy domestic factory but a model state-owned factory (longtou qiye). Once discovered, the factory was fined 110,000 RMB. The children were not compensated, but were simply sent home with their 650 RMB wages for their month of work. Their teacher disappeared before she could be charged. In 2007 Hong Kong labour activists found over 200 student workers under 16 years of age working at Yonghong Electronics, a supplier factory for US computer giant Dell Inc. in Shenzhen – making up 13 per cent of the factory’s workforce!¹⁵

These are relatively formal worksites, yet the position of under-aged employees is precarious. Because of their illegal status, they are unable to speak up against abuse.

Factory Survey Results

Using limited resources, staff members of the Shenzhen Workers’ Self-Help Association carried out a survey of 38 workers working in 37 factories between January and April 2007. This survey was carried out with several questions in mind: Are child workers being concentrated in factories with the worst conditions? How are child workers being recruited? The surveyors asked workers for basic information about their factories, including working conditions, factory size, and basic details of production. Interviewees were then asked whether they knew of any child workers in their factory, and if so, about their basic working conditions as well. Only one of the interviewees was a child worker themselves. Other respondents were asked to provide what information they knew about their co-workers under 16. It would have been impossible for them to know precisely how many child workers were employed and the conditions under which they work – especially in large factories – and so their responses could not always be exact.

The 37 factories surveyed included 13 electronics, eight toy, seven hardware, three plastics, two light mechanics, two clothing and two printing factories. 27 per cent were very small factories with less than 200 workers. 59 per cent had less than 1,000 workers.

The survey was unable to address the question of whether or not there has been an increase in child labour since economic reform, or the onset of labour shortages in Shenzhen. Nonetheless certain trends could be gleaned.

54 per cent of factories employed child workers

Of the 37 factories, 20 of them (54 per cent) had at least one child worker. In most cases, interviewees were not able to give full estimates of the number of children at their workplaces. They simply did not know every one of their colleagues. For this reason, the precise number of child workers is not recorded.

At most factories with child workers, interviewees only knew of one to three children employed. Yet some interviewees spoke of more serious problems. In the worst case, a Taiwanese toy factory apparently employed 200 under-16s, who make up 20 per cent of the company’s 1,000 employees. While some were introduced through friends or relatives, a large group of them was recruited through a local government agency in their home town! Working conditions in this factory were very poor, and there was a very high staff turnover rate, so the factory had a lot of trouble recruiting staff. They were said to ‘recruit anyone, so long as they can work’. They have even been known to recruit illiterate and semi-illiterate adults, or workers much older than most factories will accept. This company is a so-called ‘second tier’ factory, meaning that it is sub-contracted to help larger factories fill their orders for Western brands. This factory was a second-tier supplier for Wal-Mart.

The survey uncovered three other significant cases. One was a small hardware factory where six child workers were identified from a total of only 30 employees (20 per cent). Another two factories were found to employ 10 child workers. Both were mainland Chinese-owned electronics factories, one with about 2,000 workers and the other with only 200.

Demographics of child workers

All these child workers were from poorer provinces in central and Western China, mainly Yunnan, Sichuan, Guizhou, Guangxi, Henan, and Hubei. There was no apparent difference in the number of male and female child workers. Only 20 per cent had completely the required nine years of compulsory education. China’s relatively high minimum working age creates problems for 15-year-old youngsters who complete junior high school but have neither the desire nor opportunity to continue on to senior high. 59 per cent had entered the workforce having only completed primary school or part of junior high.

Factories with child workers had poorer working conditions

It is possible to identify from the survey a few trends regarding factories that employ child labour. Firstly, factories with child workers were more likely to be small. 45 per cent of the factories with child workers had 200 employees or less. Of the factories without child workers, only 11.7 per cent were so small. Likewise, fewer large factories employed child labour. 41 per cent of the factories without child workers had over 2,000 employees, but only 10 per cent of those with child workers were that big. It is fair to assume that the revenue of small factories is lower, and so working conditions are worse as they squeeze workers to increase the company’s profit margin.

In factories with child workers, conditions were on average poorer than other surveyed factories. Production-line wages were on average 327 RMB lower per month at factories with child workers. This is not because working hours were shorter. Factories with child workers worked on average more days in a month, although the number of hours per day was marginally lower than factories with no child workers detected.

Nonetheless, the survey suggested that child workers themselves did not receive less pay than their adult colleagues doing the same job – unless they were completing an apprenticeship. This suggests that factories were not using child workers as a way to reduce their labour costs. Perhaps under-age workers are being recruited to address a labour shortage, or because of simple lax inspection of identification documents.

The provision of social insurance is a measure of the degree of ‘formality’ of employment. Informal workers – particularly illegal workers like under-16s in China – are rarely provided with any kind of social insurance. Indeed social insurance was much less common in factories with child workers, presumably partly because they are smaller in size with lower revenues. 50 per cent of factories with child workers provided some kind of social insurance (although two factories only provided it to some employees) compared to 88 per cent of factories without child workers.

Recruitment channels for child workers

In the survey, the overwhelming majority of child workers were personally introduced to the factories by friends and relatives already working there. In the case of personal introductions, the employer may not have been aware of the children’s age because they likely came with fake identification, and many factories lack rigorous checks.

At six surveyed factories, child workers had been recruited through job introduction agencies, which may or may not have helped them conceal their age. These introduction agencies charged children between 700 and 2,000 RMB for their services. In another case, a printing factory with 1,000 employees recruited five child workers through a new method called ‘dispatching labour resources’ (laoli ziyuan waipai). In this case, the organization arranging employment of migrant workers from rural areas takes 200 RMB per month from the workers’ wages as a fee!

In other cases, the recruitment of children was more formal. In the case of the Taiwanese toy factory with 200 workers, part of this huge group of children was actually recruited through the local government labour bureau in their place or origin. Government departments and officials in poor rural areas commonly encourage or organize out-migration as an economic development scheme.

Another common institutional source of child labour is schools (but not necessarily ‘work-study’ programmes). From the 37 surveyed factories, two were known to recruit child workers directly through schools – one through schools in Hunan, Henan and/or Jiangxi, and the other through schools in Yunnan and/or Sichuan. One was a large Korean-owned electronics factory with 8,000 employees, producing for clients such as Bosch and Foxconn. The other was a small Taiwanese toy factory with only 500 employees – owned by the same parent company as the one with 200 children – which supplies buyers including Disney and Wal-Mart. Interviewees were not able to say precisely how many children were hired in either case.

Labour Shortage

We could not find a satisfactory way to deduce from the interviews whether there was any relationship between the incidence of child labour and the supposed labour shortage in Shenzhen. Nonetheless, we did ask whether or not interviewees were aware of a labour shortage in their factories. 23 of the 37 factories (62 per cent) were indeed short of workers when the survey was carried out.

Conclusion

While this was only a very basic study, its findings supported the general consensus that legal bans of child labour alone do not keep children out of paid work. This survey uncovered significant numbers of under-16s in the manufacturing sector in Shenzhen. Indeed, they were concentrated in relatively small factories with comparatively poor conditions, including lower wages and less social insurance. The vast majority of child workers uncovered by the survey were introduced to their employers by relatives or friends. One should keep in mind, however, that there are likely to be more child workers in Shenzhen’s service sector, or indeed the manufacturing sector outside the highly industrialized coastal provinces. The manufacturing sector is expanding to China’s inland provinces where government enforcement of child labour labour laws is more lax, at breakneck speed, with generous incentives from government. When there is a more rigorous crackdown on child labour in cities like Shenzhen (which seems inevitable), then inland provinces and the service sector will continue to provide employment opportunities for under-16s.

As long as fundamental problems of poverty exist in China, and government law enforcement remains weak, private capital will continue to recruit and profit from child workers, who are easily abused because of their precarious status as illegal labour. Despite occasional government crackdowns, child labour will continue to find work in the least formal of China’s workplaces, where labour laws mean very little at all.

Notes

1. The Shenzhen Workers’ Self-help Association (a pseudonym for the organization) greatly appreciated Union Aid Abroad – APHEDA’s support for this survey.
2. In this report, the term ‘child worker’ will refer only to under-16s.
3. China Labour News Translations (2007) ‘Part time student employees are workers too!’http://www.clntranslations.org/article/17/western-fast-food-chains-viola... 2 June 2008]
4. Wu, H.M. (2005) ‘Investigation of child labour in Dongguan, Guangdong, China: primary school students working ten hours a day.’ CRI online (guoji zai wang).http://big5.chinabroadcast.cn/gate/big5/gb.chinabroadcast.cn/3821/2005/0.... [Accessed 14 August 2006]. China Central Television (CCTV) (zhongyang dianshitai) (2006) Unscrupulous teacher sells out her students: well-known enterprises illegal uses child labour (wuliang laoshi chumai xuesheng: zhiming qiye feifa shiyong tonggong). 4 December 2006.
5. Asia Monitor Resource Centre (2000) Asia Pacific Labour Law Review 1999, Hong Kong, Asia Monitor Resource Centre, p.106.
6. The International Labour Organization (ILO) (2006) The End of Child Labour: within reach.http://www.ilo.org/public/english/standards/ipec/about/globalreport/2006... 2 May 2007].
7. Quoted in The New York Times (2007) Abuse at Chinese brick kiln is only one of many incidents of child labor, 18 June 2007. See also China Labour Bulletin (2007) ‘Small Hands: a survey report on child labour in China’. http://www.china-labour.org.hk/en/fs/view/research-reports/Child_labour_... 16 December 2007]. The ITUC/GUF/HKCTU/HKTUC Liaison Office (IHLO) (2006) ICFTU Observations to the ILO Committee of Experts on the Application of Conventions and Recommendations on Convention No.138 on Minimum Age. http://www.ihlo.org/IS/000806b.html [Accessed 2 March 2008]
8. China Labour Bulletin, 2007.
9. Southern Weekend (2007) Investigation into the history of Hongdong’s illegal brick kilns (hongdong hei zhuanyao shenshi diaocha) 21 June 2007.http://www.nanfangdaily.com.cn/zm/20070621/xw/tb/200706210001.asp
10. Southern Metropolitan Daily (2008) Dongguan’s Child Labour ‘Business’ (Dongguan tonggong ‘maimai’), 28 April 2008, http://epaper.nddaily.com/A/html/2008-04/28/content_452688.htm [Accessed 16 May 2008]
11. Pringle, T. (2006) ‘The Informalization of Work in China’, Asian Labour Update, Issue 58, January-March 2006, pp. 10-15.
12. News Watch Weekly (liaowang xinwen zhoukan) (2006) Survey of the illegal use of child labour in toy and other labour-intensive industries (wanju deng laodong miji jixing changye feifa guyong tonggong diaocha). 5 January 2006. http://info.toys.hc360.com/2006/01/05092332476.shtml [Accessed 16 June 2007]. ILO, 2006. New York Times, 2007. CSR Asia (2005) ‘Is child labour on the increase in China?’ CSR Asia Weekly 1(45). http://www.csr-asia.com/upload/csrasiaweeklyvol1week45.pdf [Accessed 4 March 2007].
13. News Watch Weekly (liaowang xinwen zhoukan) (2006) Survey of the illegal use of child labour in toy and other labour-intensive industries (wanju deng laodong miji jixing changye feifa guyong tonggong diaocha). 5 January 2006. http://info.toys.hc360.com/2006/01/05092332476.shtml [Accessed 16 June 2007].
14. CCTV, 2006.
15. Students and Scholars Against Corporate Misbehaviour (SACOM) (2007) A Statement to Michael S. Dell, the founder, chairman & CEO of DELL, INC. 1 May 2007.http://ilrf.org/press/sweatshops/dell_sacom_050107.pdf [Accessed 2 May 2007