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DE RUEHGZ #0455 2120804
ZNR UUUUU ZZH
R 300804Z JUL 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 7457
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASH DC
RUEHC/DEPT OF LABOR WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC

UNCLAS GUANGZHOU 000455 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM 
STATE PASS USTR CHINA OFFICE 
 
E.O. 12958: N/A 
TAGS: ELAB ETRD ECON PGOV CH
SUBJECT: U.S. Firm Sees Rising Number of Child Labor Cases 
 
(U) This document is sensitive but unclassified.  Please protect 
accordingly. Not for release outside U.S. government channels. Not 
for internet publication. 
 
¶1. (SBU) Summary: Factory auditors from a major U.S. firm have seen 
an increase in incidences of child labor at some factories of firms 
it contracts with, especially in Shantou, Guangdong and Quanzhou, 
Fujian.  A senior auditor told us that a tighter labor market, with 
employees looking for opportunities in high tech and services areas, 
and increasing numbers of student workers have led to the recent 
growth in child labor in south China.  End summary. 
 
Tighter Labor Market Increasing Child Labor 
------------------------------------------- 
 
¶2. (SBU) A senior auditor with a major U.S. firm in south China told 
Congenoffs that rising wages associated with a tighter labor market 
are leading more factories that make the firm's products to hire 
underage workers.  He said the expansion of high-tech industries and 
more capital-intensive manufacturing, such as automobile 
manufacturing, in south China, had made it harder for the factories 
his firm works with to attract workers.  The auditor pointed out 
that many of these factories had complained that higher wages in 
provinces to the north (Zhejiang, Jiangsu, and Shandong) were making 
it more difficult to recruit migrant laborers.  In addition, he said 
that press reports highlighting poor and sometimes abusive working 
conditions in the Pearl River Delta had also made the region less 
attractive to workers from other provinces. 
 
Student Work Programs on the Rise 
--------------------------------- 
 
¶3. (SBU) While the firm's factory inspection staff has identified 
cases of child labor in the past, the auditor said the recent 
increase was largely due to the expansion of programs that bring 
students at vocational schools to work in factories.  He explained 
that rural schools often get the approval of the local education 
department to send students to local factories to fulfill part of 
their education requirement and at the same time earn money that 
goes to subsidize the cost of education.  According to the auditor, 
vocational schools are common in the Pearl River Delta's factory 
enclaves, and these schools often require students to spend a year 
on the factory floor before they can graduate.  He said that Chinese 
labor laws, including the new Labor Contract Law, do not protect 
students, enabling factory owners to avoid paying minimum wage, 
overtime, or benefits. 
 
¶4. (SBU) The auditor told us that his firm does not permit 
employment of student workers interested in earning educational 
credit at factories of its manufacturing partners, unless the work 
at the factory "has a very close relationship with the subjects 
students are learning."  The firm also enforces China's legal 
minimum work age, 16 years, for any workers at the factories.  He 
noted that just two weeks ago the firm's auditing team discovered 
over 100 student workers under the age of 16 at several small 
factories that make its products.  The firm maintains a 
"three-strike" policy; factories found to have violated its labor 
standards three times are barred from making its products. 
 
Shantou, Quanzhou "The Worst" 
----------------------------- 
 
¶5. (SBU) The auditor pointed out that increasing instances of child 
labor led the firm to perform an internal analysis of the frequency 
of its occurrence at the factories it inspects.  Their 2005 analysis 
showed a significant increase from two years earlier.  The auditor 
believes that the situation has continued to deteriorate.  He also 
noted that the factories he and his team visit in Shantou, Guangdong 
and Quanzhou, Fujian are "the worst" and the most likely to have 
child laborers.  He sees child labor cases in these areas so 
frequently that his team doesn't give a warning before they arrive 
for an inspection. 
 
GOLDBERG