Strikes surge in China amid Trump’s tariff threat 

China faces a backlash from angry factory workers as the trade war with the United States drags on. Plunging export orders have triggered a spate of “bankruptcies” in the manufacturing sector as companies close, fueling large-scale layoffs.

“Mass strikes” have even broken out at electric vehicle giant BYD amid claims of “wage cuts” and “broken promises.” Plants in Wuxi, a city near Shanghai, and Chengdu, the capital of Sichuan province, have seen workers walk out in protest, the China Labour Bulletin reported.

“The reality for many Chinese workers, particularly those in manufacturing, remains deeply troubling … with basic wages often [falling] below subsistence levels, compelling workers to endure excessive overtime,” CLB, the leading authority on labor relations in China,” stated.

“This situation is further exacerbated as plummeting export orders push factories towards bankruptcy, leaving workers unpaid and stripped of social security protections,” it said in a newsletter this week.

Up to ’20 million workers’ risk being swept away.

Behind the news:

• Up to “20 million workers,” or roughly 3% of China’s labor force, risk being swept away by tariffs after President Donald Trump imposed 145% duties on Chinese imports.  
• Declining exports and a slowing global economy [are] expected to generate pressures on the Chinese economy and labor market,” Goldman Sachs reported. 

Delve deeper: Exports have been used as a blunt instrument to keep China’s GDP growth at 5%. But the costs have been high as trading partners balk at the flood of cheap imports.  

Between the lines: “To offset the shock of sweeping US tariffs, Beijing needs to ramp up domestic demand and help offset the loss of a market that absorbed US$525 billion of Chinese goods last year,” Bloomberg News pointed out.

Big picture: There are other deep-seated problems, such as jumpstarting consumption amid stagnating wages across the private and public sectors. Chaos in the real estate market has already “destroyed US$18 trillion” or 70% of household wealth.

China Factor comment: Beijing has stepped-up policies “to stabilize the economy,” but fears are growing it is too little, too late.