The Path and Price of Consumption: From Shenzhen to Hong Kong

Foxconn industrial complex, Shenzhen, China

Blog Entry #45: The Path and Price of Consumption: From Shenzhen to Hong Kong

The MV Explorer docked opposite Hong Kong Island on Kowloon

Friday, November 4, 2011

Ship docked at Harbor City Mall

Inside the Harbor City Mall

Toy Story at the Harbor City Mall

It is perhaps fitting that one must disembark from ship in the Hong Kong harbor through the large upscale Harbor City shopping mall filled with high priced consumer items, from Gucci to Rolex.  Our only day in the Hong Kong area in many ways felt bi-polar: we began and ended the day in Hong Kong, dazzled by its skyline glittering across the bay, filled with the corporate offices and financial centers for many of the world’s largest corporations, especially electronics.  We spent the middle part of the day visiting China’s “miracle city” of Shenzhen, on the edges of Foxconn’s industrial complex, home to over 400,000 workers who assemble the digital electronic goods that fill our stores, from Apple iPads to Samsung and Kodak cameras.

Fishing Village and Hong Kong skyline

The entrance into Hong Kong harbor from the South China is stunning.  Sunrise revealed misty landscapes of still forested hills and islands taking shape in the soft morning light.  As we moved west toward Hong Kong island, the passage began to narrow, and we caught glimpses of the first high rises.  Tucked here and there are small fishing villages, a reminder of the region’s not-too-distant economy, but increasingly crowded out by this amazing vertical enclave.

Eva with home towers behind

As we rounded one bend to reveal a set of 4 high rise apartment buildings, one of my students, Eva, said excitedly, “That’s my home!”  Herself from Hong Kong, she pointed to the 9^th floor apartment where she was raised and where her parents still live.

And then we entered the harbor area, where the dueling skylines of Hong Kong island to the south, and Kowloon where we were docking to the north, suddenly arose from the waterfront.  To say it takes one’s breath away is an understatement.

Breakfast in Hong Kong harbor!

While enjoying breakfast on the deck with the Hong Kong skyline looming behind, I was focused on getting my group together to spend the day examining environmental and labor issues in the vast Chinese industrial zones that lie just beyond the Hong Kong border in Shenzhen, on the China mainland.

Hong Kong street in Kowloon warehouse district

In the elevator heading to SACOM

Our host for the day was SACOM – Students and Scholars Against Corporate Misbehavior – a small NGO that for the past sic years has been monitoring corporate labor practices in the Chinese industrial zones.  Deep in the warehouse area of Kowloon district (trying to get our large tourist bus through the narrow streets was among the many logistical challenges of this day), we squeezed all 20 of us into an industrial elevator and rose to the 13^th floor where SACOM’s small office is found behind gated doors.

Yi Yi Cheng of SACOM speaks to our group in the SACOM office

Here we met Yi Yi Cheng, Program Officer for SACOM, with whom I had been corresponding since March to set up this day.  I first heard of SACOM a year ago when both NPR and the New York Times carried articles on the abuse of workers and the high suicide rate among workers making Apple products in Foxconn factories in Shenzhen, China.  Knowing that SAS would be stopping in Hong Kong, I made contact with SACOM, resulting in our visit this morning.

A year ago I had never heard of Foxconn, a Taiwanese based multinational founded in 1974, and now one of the largest employers in the world, with over a million workers in China alone, assembling electronics and other consumer items for many of the world’s largest corporations.  Many of the brands we are most familiar with – Apple, Dell, Toshiba and HP computers, as well as Kodak, Samsung, and Panasonic cameras – are made by workers in Foxconn factories.

Entrance to Foxconn

With over 400,000 workers (nearly ½ of the population of Montana!), Foxconn’s Shenzhen industrial complex contains 10 immense factory buildings and numerous residences for the workers that keep Foxconn running 24 hours a day.  Increased demand, particularly for Apple’s iPad and iPhone has increased production pressures on the workers (For a detailed report on Foxconn practices, check out “Foxconn and Apple Fail to Fulfill Promises: Predicaments of Workers after the Suicides” at www.sacom.hk.  Some informative YouTube videos can be found at: ).

SACOM Protest at Apple store opening in Hong Kong

SACOM protest at Hong Kong Apple Store opening

SACOM has been targeting Apple to bring to light the high cost to Chinese workers of our increasingly rapacious appetite for electronic goods.  The basic salary at Foxconn in Shenzhen in May 2010 was 950 Chinese RMB/month, about US$150 – far below a living wage in China.  Hence the vast majority of workers are young single adults, mostly from China’s rural hinterlands, where rural poverty and the promise of a job lure them to these industrial complexes.  The gap between what these workers earn and what companies like Apple profit from their labor is enormous, with only about 1-2% of the total cost of an iPad or iPhone returning to the assembly company that manufactures them. 

SACOM reports that the actual cost of manufacturing an iPhone is US$6.54, though they retail for several hundred dollars.  Doubling the monthly wage of workers would hardly dent Apple’s profits, but could get workers closer to earning a living wage.  Instead workers are often forced to accrue 100 hours of overtime per month just to earn enough to get by.

SACOM carried out a very effective action when Apple opened its new 2-story Apple store in the glass-enclosed walkway at the Hong Kong International Finance Center, unfurling a large “iSlave” banner to emphasize the working conditions that produce these gleaming gadgets.  Pat and I later walked by the Hong Kong Apple store that night.

New Apple Store in Hong Kong Financial District, target of SACOM protests

Following our visit to SACOM, we left for our true destination, Shenzhen, only 30 km but two border crossings away (under China’s “One country, two systems” policy, Hong Kong largely maintains autonomy in its economy and government, including a separate currency and driving on the left side of the road, British-style).

Flying from Hong Kong, the Shenzhen skyline in the distance only 30 km to the Northwest

Workers residence in Shenzhen

I have long wanted to visit Shenzhen, prime symbol of China’s turn toward a market economy 2 decades ago under Deng Xiaoping, successor to Chairman Mao Zedong.  In 1978 Shenzhen was a traditional Chinese fishing village at the mouth of the Pearl River, with 28,000 people, downstream from old Canton city.  Today its populations is around 12 million – larger than New York City, product of the largest and fastest urbanization project in the history of the world.

New building construction in Shenzehn

Entering the Shenzhen Special Economic Zone

Evidence of this building frenzy was everywhere as we drove through the Shenzhen Special Economic Zone, first set up in 1991, to the Foxconn complex.  We had been looking forward to an organized tour of Foxconn, but three days before our arrival Foxconn cancelled our tour without explanation.

Instead, at one of the entrances to Foxconn, we met Jenny Chan, a doctoral student in sociology at the University of London who is doing her field research on labor conditions at Foxconn.  Previous to this Jenny worked for several years with SACOM, so she knows both the workers and their issues well.

Jenny Chan, formerly of SACOM

Jenny turned out to be an energetic and vivacious host, who took us first to the retail store Foxconn maintains just outside its heavily secured gates, where it displays and sells many of the products produced within its walls – but most at prices well beyond what its workers can afford (though everyone, it seems, saves enough for a mobile phone – they are everywhere!).

Foxconn made products in the Retail Store

Longhua from bridge connecting to Foxconn

Foxconn HQ from bridge connecting to Longhua neighborhood

The Longhua neighborhood surrounding the Foxconn factory zone bustles with energy and is full of small retail businesses, but only after spending some time there do you being to notice some odd features.  For example, there are virtually no children or elderly people here; everyone seems to be a young working adult.  There are no schools or banking services beyond ATMs; workers use the Post Office here to send remittances to their rural families. 

Off duty Foxconn workers in Longhua neighborhood, Shenzhen

Foxconn Workers Residence, Longhua neighborhood

Bars on windows of Foxconn Workers Apartments

Security guard, Foxconn Residence

The high rise worker residences all have bars on the doors and windows; after several worker suicides in a period of days last year, Foxconn installed anti-jumping nets in its factories and put bars on the windows and balconies in the worker residences.  Due to high security (and as a large group of Westerners we attracted a good deal of attention already), we were not able to visit a residence, but Jenny described them for us: usually 6-8 workers in a 2-room “apartment” with double bunkbeds and no cooking facilities.  Barred balconies serve as defacto closets for the workers’ clothes.

Pat walking to dinner in Hong Kong

Hong Kong Financial district

After two hours with Jenny, it was time to return to Hong Kong, symbolically and literally at the other end of the consumption line.  Pat and I took the Star Ferry across to Hong Kong city just as the famed laser light show was beginning, though it was largely drowned out by street level lighting as we made our way through a maze of skywalks in the financial district until we could reach street level and find a restaurant.  We did eventually have a lovely Cantonese dinner, though it was sobering to realize that our $50 bill for dinner for two was about 1/3 of the monthly salary of the factory workers we had been with only hours before.

At the end of the day I know there are no easy answers as China rushes full steam ahead into the global economy in its attempt to modernize and develop itself and lifts its people out of poverty.  But that should not make those of us on the consumer end of the “Chinese miracle” blind to the very high costs being borne by millions of young Chinese workers to satisfy the extreme economic pressures exerted by multinational corporations such as Apple and Wal-Mart to keep reducing production costs. 

My admiration for people like Yi Yi and Jenny, and small NGOs like SACOM, is boundless as they take on the Foxconns and Apples of the world in order to improve conditions for Chinese workers.  We the consumers can do our part by demanding that the corporations we buy our products from insists on ethical wages and working conditions in the factories that produce them.