The Chinese Export That Isn't Doing Well: Laborers

The Chinese Export That Isn't Doing Well: Laborers

The economic downturn in China’s rust belt has provided a steady stream of workers willing to journey overseas in the hope of higher wages.

SourcePaula Bronstein/Getty

Why you should care

China’s workers are increasingly susceptible to fraud and exploitation overseas. 

Desperate for cash because he had not been paid for two months and fearing he could be deported because he lacked official papers, Jiang Wei and two colleagues turned up at the Chinese Consulate in the Zambian capital of Lusaka in search of help. “Our subcontractor held our passports and visas. We had no formal work contract,” says Jiang.

The three men’s passports were returned and they were given their pay and tickets home. Two years later, they are still out of pocket. Now back in China, they are seeking the return of the RMB 15,000 ($2,200) in fees they paid to a third-party labor contractor. Their experience is not unusual: As China has become a global infrastructure builder, more and more Chinese workers have gone to work on projects in Southeast Asia and Africa.

The economic downturn in China’s industrial rust belt has provided a steady stream of workers willing to journey overseas in the hope of higher wages. With the economy increasingly under pressure and fewer jobs available at home, workers will be even keener to go.

“The slowdown in the construction sector in China has not only led to a spillover in terms of building materials and construction machinery but also human resources, both rank-and-file workers and professionals,” says Miriam Driessen, a research fellow at Oxford University.

We have never gone abroad before, so we rely on friends to recommend destinations.

Ren Zhiji, twice defrauded over foreign work trips

But a rapidly growing informal economy of contracted labor has left such workers vulnerable to abuse, warn experts. “Chinese construction companies operating abroad often also export domestic workers and business practices — including long hours, unsafe conditions and deferred or nonpayment of wages,” says Aaron Halegua, a lawyer and research fellow at New York University School of Law. “Even workers that obtain a visa to work abroad legally are often compelled to pay fees or security deposits, forced to sign one-sided contracts restricting their rights, of which they rarely get a copy, and experience abuse,” he adds.

Since China announced its plan to link more than 65 countries along a modern Silk Road — its so-called Belt and Road Initiative — it has hugely expanded its portfolio of state-funded infrastructure projects abroad. In 2017 alone, China committed to more than $23 billion to infrastructure projects in Africa, according to the most recent figures available from the American Enterprise Institute.

While 89 percent of employees at Chinese companies in Africa are locally hired, according to McKinsey & Co., many larger infrastructure projects backed by Chinese financing are built by Chinese workers. “When the crunch comes where the project has to be completed in a very short time and is important politically to the host government, that’s when there will be a lot of Chinese workers who will be flown in to do the last stretch of projects,” says Barry Sautman, a professor at the Hong Kong University of Science and Technology.

Chinese construction workers are also heading in greater numbers to Southeast Asian countries, including Malaysia and Indonesia, to service a real estate boom driven in part by a surge in mainland Chinese demand for property.

Forest City, a China-backed compound in Malaysia that will eventually house 700,000 people, has faced accusations that it was built by Chinese workers there on tourist visas. The Malaysian government is trying to put illegal workers on the right work permits. Some construction workers say they continue to work on tourist visas.

“Our labor contractor said we would switch our tourist visas to working visas when we arrived but that has not happened yet,” says Liu Wei, a Chinese construction worker. Without legal work status, Liu has been unable to demand the RMB 20,000 in pay he says his manager has withheld from him.

Country Garden, the Chinese property developer, says it did not hire workers directly because “contractors and subcontractors are responsible for the recruitment, hiring and payroll of local and foreign workers in related projects,” but that it did not allow contractors to use illegal informal labor.

Those eager to work abroad usually turn to an informal network of subcontractors who charge rates as high as RMB 30,000 to match workers with construction projects abroad. Dozens of intermediaries operate in Ren Zhiji’s hometown in Hebei province, just outside Beijing.

Lured by the promise of earning RMB 12,000 a month, almost three times as much as he would at home, Ren, a lifelong construction worker, paid an intermediary to help him get a job overseas. Ren’s first foray, to the U.S. territory of Saipan to build a Chinese-funded casino, ended when the project was raided by the FBI last spring after a worker fell to his death. Six Chinese workers are now suing the Chinese contractor — Gold Mantis Construction Decoration — in Saipan District Court over working conditions. “The conditions were terrible, with discarded materials and trash everywhere. We did not have safety harnesses either,” Ren says.

Undeterred, he agreed last year to go abroad again, only this time to be scammed out of RMB 2,000 he had paid to an intermediary for work on a U.K. telecommunications project that did not exist.

“We have never gone abroad before, so we rely on friends to recommend destinations,” says Ren. “We never imagined that the same people would deceive us.”

He adds: “Salaries in China have not grown. By working abroad for a few months, you can live a year in China.”

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By Emily Feng

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