China has ordered owners of a huge Taiwan-backed shoe factory to address striking workers’ grievances about unpaid social security, an official said yesterday.
Thousands of employees at a factory owned by Yue Yuen Industrial (Holdings) Ltd (裕元工業), which calls itself the world’s largest branded footwear maker, in Dongguan City have been on strike since Monday last week, although some have returned to work, according to a labor rights group.
The Chinese Communist Party fears an independent labor movement could threaten its grip on power, so it only allows one government-linked trade union.
However, activists say government officials have been more sympathetic to individual grievances against factories, especially those funded by foreign companies or investors from Hong Kong or Taiwan. Yue Yuen is a company owned by a Taiwanese family.
A Chinese Ministry of Human Resources and Social Security official said the government was aware of the Yue Yuen issue and Dongguan officials had ordered the company to rectify the situation.
“According to our preliminary investigation, the Dongguan Yue Yuen shoe factory really has the problem of not strictly submitting social security payments,” ministry spokesman Li Zhong (李忠) told a news conference in Beijing, according to a transcript posted online.
“The Dongguan City social security bureau... has ordered the enterprise to carry out rectification in accordance with the law by April 25,” he said, adding the ministry would seek to protect the legal rights of workers.
ACTIVIST FREED
Meanwhile, a Chinese labor activist has been freed after being detained for more than two days by security agents whom he says tried to convince him not to make contact with workers involved in the Yue Yuen labor strike.
Zhang Zhiru’s (張治儒) brief detention underscores nervousness among officials about the strike. A colleague of Zhang’s at the Shenzhen Chunfeng Labor Dispute Service Center, which he runs, was detained separately on Tuesday and has not been released, Zhang said by telephone yesterday.
Labor activists say the strike is one of China’s biggest since market reforms started in the late 1970s. It is already starting to have ripple effects on businesses.
Zhang had been working with other activists and lawyers to help workers at Yue Yuen organize and press their demands regarding social insurance payments. He visited the Dongguan site on Monday after an attempt last week was thwarted by security agents.
Speaking from the southern city of Shenzhen, next to Dongguan, Zhang said domestic security agents summoned him to a meeting on Tuesday and asked him to promise he would not make contact with the workers.
He refused and was taken to what the agents said was a “vacation area” in the suburbs of nearby Guangzhou, where they confiscated his mobile phone, confined him to a room and barred him from making outside contact, he said.
‘FUN TRIP’
They tried to convince him to write a statement that he was “safe and on a trip for fun with friends,” but he refused. He was allowed a telephone call to his wife on Wednesday afternoon.
Late on Thursday morning, he was driven back to Shenzhen, where he lives, and released. Zhang said he was again told not to make contact with the striking workers.
“They said this would be going against the work of the government,” which he was told was trying to facilitate an arrangement to end the strike.
“But, definitely, if the workers have a need or if they have some questions and come to us we will still give them opinions and suggestions, telling them how they can better protect their interests,” Zhang said.
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has