Chinese Workers Need A Raise!

One of the key points raised by Asian Times commentator Henry Liu in his important series on the dollar and China is that Chinese workers are facing rising unemployment and poverty level wage rates – and this cannot be remedied by fiddling with the value of China’s currency.

Liu writes (in part two):

“With a high rate of unemployment and excessively low wages by any standards, China has no reasons to revalue the yuan’s exchange rate. What China needs is a national full employment policy with an aggressive wage enhancement strategy.”

Yet there are increasing calls heard from the U.S., including from the AFL-CIO, that China needs to push the value of its currency up! If China were to allow its currency to float freely it is entirely possible that it would actually FALL in value as Chinese savers shifted out of the fragile Chinese economy into more secure environments.

Instead, I think Liu is on the right track in arguing for a balanced expansion of the domestic Chinese economy. And the starting point is to raise Chinese workers wages. Yet, oddly, Liu fails to argue for the surest way to win a raise for Chinese workers – allow those workers to organize genuine unions! The implementation of the freedom of association, a basic principle of international law, is a crucial first step. This right is denied Chinese workers as they are forced to join a state and Communist party controlled labor organization.

I made this point in a letter published in the Financial Times earlier this year.

AFL-CIO President John Sweeney is travelling to China later this month.


This would be a perfect opportunity to meet with independent union leaders like Han Dong Fang of the China Labour Bulletin and to press for the release of jailed union activists in support of the freedom of association for Chinese workers.

(For more information on the situation of workers in China go to the excellent CLB website at:

Here is the link to part four of Liu’s series:

and a link to another Asia Times piece by Jack Crooks that sharply poses the China-Greenback issue: