Big Tech in China faces a cultural revolution.
Moves to revamp the industry were mapped out this week by the powerful Central Committee and the State Council in the ruling Communist Party’s five-year plan.
Already curbs to “rein in” the US$4 trillion technology sector have been put in place. Tighter anti-competition regulations will be beefed up along with “reforms” to combat “big data” privacy issues undermining consumer confidence.
Social justice for millions of low-paid gig economy workers will also be addressed.
“Policymakers would like to resolve social issues effectively and efficiently to ensure social fairness, justice, equality and national safety, as well as preventing risks,” Bruce Pang, the head of research at investment bank China Renaissance, told the Financial Times.
Shades of the Victorian sweatshop:
- Millions of low-paid delivery drivers in the gig economy face 19th-century working conditions.
- Posts on Chinese social media compared the plight of these migrants to “Victorian sweatshops.”
- All of them work at the sharp end of the e-commerce revolution in China’s cities.
- They are also employed by companies owned or linked to Big Tech giants such as Alibaba and Tencent.
- Many can earn less than 2,000 yuan a week or US$308.
Wage war: “‘Crowdsourced drivers’ for Meituan made around 2,800 yuan [$432] per week, but that has dropped to around 2,000 yuan. A ‘special delivery driver,’ who worked 12 hours a day with one or two days off per month, said that they earned just over 7,000 yuan per month [or $1,080],” China Labour Bulletin reported in June.
Delve deeper: Grocery delivery app Meituan has close links with online group Tencent, which is part of the BAT gang of Baidu and Alibaba. Meituan’s mission statement is: “We help people eat better, live better.” A sentiment that the company’s delivery drivers can only dream about.
Strike threat: Alibaba-owned Ele.me was hit with strike action earlier this year. “Screenshots shared online showed that drivers only made around 3.5 yuan [roughly 50 US cents] for a three-kilometer [or nearly two-mile] journey,” a report by China Labour Bulletin, a non-governmental organization in Hong Kong, said.
Social media voice: Large-scale industrial strikes are rare in China as independent labor unions are banned. Still, that has not stopped gig economy workers from organizing and protesting on social media.
Party fears: In a move by the Communist Party to head off growing discontent, the State Administration for Market Regulation has laid down the law on e-commerce’s Big Tech. Delivery drivers must be paid above the minimum wage, and have access to insurance cover, as well as other social security benefits.
China Factor comment: Low pay, long hours and Dickensian attitudes has fuelled Big Tech’s bottom line under the charade of Chinese innovation. Now, the Party has been forced to act to avoid social instability.