Quality Products International

Labour Relations in China & their impact on your product!

by on Jun.05, 2010, under Asia Business

Recently there have been a few articles concerning the plight of workers in China.  The most widely known case is, of course, the deaths and suicides on the Foxconn campus.  What is increasingly becoming clear is that China is going through some of the upheavals in labour relations that the West went through during parts of the Industrial Revolution.

The average Chinese worker has now grown up with a better lifestyle and more freedoms than his or her parents had, and the person’s attitude toward work is displayed in that new outlook.  No longer is a worker prepared to work at a backbreaking pace just to have a roof over his or her head and a better life for his or her offspring.  These people want to enjoy some of fruits of their labour.  Evidence of this desire can be seen in the large number of strikes and protests that are being allowed by the ruling Communist party.  The party  recognizes the changing face of the population and is allowing workers greater freedoms to express their discontent within certain limits.

A strike at Honda Motor Co. and the official response to a spate of suicides at Foxconn Technology, a maker of electronics for industry giants such as Apple, Dell and Hewlett-Packard, suggests China’s leaders are at least tacitly allowing workers to talk back.

Over the weekend, the top Communist Party leader in Guangdong province visited Foxconn’s sprawling factory — where 10 workers have committed suicide — and urged the company to adopt a “better, more humane working environment” for its mostly young workers, state media reported.

“The ’80s- and ’90s-generation workers need more care and respect and need to be motivated to work with enthusiasm,” said Guangdong party chief Wang Yang, who has backed efforts to shift Guangdong up the industrial ladder, away from reliance on exports of cheap, low-tech products.

From: Delaware Online

What does that mean for companies doing business in China?  Well, as conditions improve, so do costs.  If costs go up, then manufacturers will either increase prices or look to other areas to cut costs.  With the current global economic environment, and competition growing in lower cost centers such as Vietnam, Laos, and Cambodia, Chinese manufacturers will be under pressure to keep costs low.

Manufacturers will find it increasingly difficult to keep prices and profits at the same level they have been.  One area where costs have been cut traditionally is in the raw materials used.  Substitutions or the adulteration of supplies with cheaper alternatives has always been an option.  Problems arise when this is done without prior consultation or approval of the customer.  With labour costs increasing and most other inputs relatively static, the focus on cutting raw material costs will increase.  It behooves all companies that manufacture in China not only to have stringent quality standards in place, but to also have a mechanism for verifying those standards preferably before product reaches its final destination.

Quality Products International Limited (QPI Ltd – QPI) is well placed to help you insure your standards are being met not only with physical inspections of product but also audits of the conditions inside factories and the supplies used.

Inward Quality Control (IQC), and formal testing of either raw materials or finished goods becomes more important.

QPI has western owned and managed partner labs conveniently located in China to provide prompt cost effective testing such as REACH, RoHS, WEEE, AZO, EN71, Phthalate, DMFu, CPSIA and many others.

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