Commentary on Political Economy

Tuesday 15 January 2019


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A Chinese employee at a construction site in Angola. The economic downturn in China’s industrial rust belt has provided a steady stream of workers willing to journey overseas © Reuters Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Share Save Save to myFT Emily Feng in Beijing 25 MINUTES AGO Print this page0 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,” said Mr Jiang. Their passports were returned and they were given their pay and tickets home. But two years later and they are still out of pocket. Now back in China, both are seeking the return of the Rmb15,000 ($2,200) in fees they paid to a third-party labour 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 south-east 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,” said Miriam Driessen, a research fellow at Oxford university. But a rapidly growing informal economy of contracted labour has left such workers vulnerable to abuse, warned experts. “Chinese construction companies operating abroad often also export domestic workers and business practices — including long Recommended Special Report: China’s Belt & Road Initiative hours, unsafe conditions and deferred or non-payment of wages,” said 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 added. 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 $23bn to infrastructure projects in Africa according to the most recent figures available from the American Enterprise Institute. While 89 per cent of employees at Chinese companies in Africa are locally hired, according to McKinsey, a consultancy, 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,” said Barry Sautman, a professor at the Hong Kong University of Science and Technology. Chinese construction workers are also heading in greater numbers to south-east 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, faced accusations that it was reliant on Chinese workers there on tourist visas. The Malaysian government is now trying to put illegal workers on the right work permits. Some construction workers say they continue to work on tourist visas. “Our labour contractor said we would switch our tourist visas to working visas when we arrived but that has not happened yet,” said Liu Wei, a Chinese construction worker. Without legal work status, Mr Liu has been unable to demand the Rmb20,000 in pay he said his manager has withheld from him. One of Ren Zhiji's friends, Sun Houlun, was told this letter would get him into the UK Country Garden, the Chinese property developer, said it did not hire workers directly because “contractors and sub-contractors 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 labour. Those eager to work abroad usually turn to an informal network of subcontractors who charge rates as high as Rmb30,000 to match workers with construction projects abroad. Dozens of intermediaries operate in Ren Zhiji’s home town in Hebei province, just outside Beijing. Lured by the promise of earning Rmb12,000 a month, almost three times as much as he would at home, Mr Ren, a life-long construction worker, paid one of them to help him get a job overseas. Ren Zhiji's first foray into working overseas ended when the project was raided by the FBI Mr Ren’s first foray, to the US 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 their working conditions. “The conditions were terrible, with discarded materials and trash everywhere. We did not have safety harnesses either,” Mr Ren said. Undeterred, he agreed last year to go abroad again, only this time to be scammed out of Rmb2,000 he had paid to an intermediary for work on a UK telecoms project that did not exist. “We have never gone abroad before, so we rely on friends to recommend destinations,” said Mr Ren. “We never imagined that the same people would deceive us.” He added: “Salaries in China have not grown. By working abroad for a few months, you can live a year in China.”

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