Foxconn: troubled waters on the Chinese shores

Latest news reported that the Chinese giant Foxconn, producing iPhone, iPad and other major Apple products, has disposed a shut down of its huge factory in the city of Taiyuan in northern China. According to Chinese press and government agencies, over 2.000 workers have been involved in brawls and riots, while over 5.000 police agents have been deployed to face the troubles. The situation has been normalized only after several hours of riots.

There’s a deep international press coverage of this news, due to the iPhone 5 launch and the “Tablet battle” [further info: Washington Post] among major competitors like Apple, Amazon, Google and Microsoft using the latest tech innovations or upgrades, as well as aggressive marketing strategies focused on price and contents.

Foxconn has a network of nine factories in China. It’s famous for the huge Longhua Science & Technology Park, an unprecedented factory-village named “iPad city” with over 450.000 people working and living inside its walls on 12 hours/6 days per week work shift. Foxconn has been involved in big troubles and international inquiries when several suicide cases were reported in 2010. Worrying reports have been published by neutral observers and Chinese university researchers [on South China Morning, Shangaiist or Daily Mail]. Foxconn even installed anti-suicide devices like nets and surveillance systems.

Apple provided an audit on 220+ factories in the world producing its products or involved in its supply chain. The report revealed violations of labor and work shift policies, as well as working conditions, in over 62% of the cases. Even trying to meet the transparency demand coming from public opinion all over the world, publishing lists of supplier and contractor, Apple didn’t take the right accountability measures according to some of the critics. Many of them are asking a real accountability operation involving all Apple factories.

This situation is recalling disturbing memories like The Jungle by Upton Sinclair that back in 1906 shocked the whole world and public opinion revealing the terrible working conditions in the US food processing industry, and also determined deep legislative measures by the Congress. But beyond the worst memories of industrial history, this situation is deeply connected with crucial questions regarding the future of production delocalization in China.

There’s a major trend driven by the increase of both labour cost than social cost in China (explained by many authors like prof. Franco Mazzei) that determines a re-shoring process, with several companies re-thinking their supply chain. But we should also pay attention to the evolution of the China Western Development Strategy: an integrate development plan focused on western regions with incentives packages for companies “going west”.

The future will be deeply influenced by the present combined effect of the above new trends, the riots and the central government reactions and, last but not least, the results of the internal debate between the supporters of Guangdong model (moderately liberal and democratic) and the supporters of Chongqing model (authoritarian, centralized and focused on social issues).

Troubled waters on the shores: the storm will soon draw a completely different scenario.

One response to “Foxconn: troubled waters on the Chinese shores

  1. Pingback: China: leadership in transition | Valerio Sold Out·

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