Closure Of Samsung Plant Exposes Vulnerability Of Chinese Workers In Manufacturing Sector

After returning to work from her 4-month maternity leave in November, Liu, a 29-year-old mother, was surprised to learn that she could become jobless by the end of the year, after South Korean electronics giant Samsung announced its decision to shut down the mobile phone manufacturing plant she works for in Tianjin, a port city located about 80 miles east of Beijing.

MOSCOW (UrduPoint News / Sputnik - 14th December, 2018) After returning to work from her 4-month maternity leave in November, Liu, a 29-year-old mother, was surprised to learn that she could become jobless by the end of the year, after South Korean electronics giant samsung announced its decision to shut down the mobile phone manufacturing plant she works for in Tianjin, a port city located about 80 miles east of Beijing.

"On December 11, my company held an explanatory meeting to inform us that the production will be halted by December 31, 2018. The company didn't tell us anything else," Liu, who only wants to be identified by her surname due to the sensitivity of the issue, told Sputnik.

Although rumors of Samsung's plan to close the factory in Tianjin started to circulate as early as August, Liu never imagined would have to face such reality so soon.

"I never really worried about it, because I never thought it could happen so fast," she said.

Liu stressed that she just wanted some answers on how Samsung plans to handle the future of the factory's workers like her.

"We can survive without anyone. But we just want the company to give us some answers. We spent our youth here. At this age, we are almost no longer in need in the society and Samsung has abandoned us," she said.

According to a brief statement from Samsung, the company reached the difficult decision to cease operations at its plant in Tianjin as part of the "ongoing efforts to enhance efficiency in our production facilities."

Amid rising labor cost in China and growing uncertainty because of US-China trade tensions, a number of multinationals like Samsung decided to move their manufacturing operations away from China to neighboring countries such as Vietnam and India.

Samsung announced plans to expand its production capacity in Vietnam in April, after becoming the largest foreign investor with eight factories and one research and development center in the Southeast Asian country. In India, Samsung opened what was described as "the world's largest mobile phone factory" in July.

As someone who works in the manufacturing industry in China, Liu is forced to face serious consequences from Samsung's decision to move production to other countries.

Growing up as a native in the city of Tianjin, Liu felt lucky when she joined the Samsung factory about ten years ago.

"The factory was established in 2001. Most of my colleagues started working here before 2008. I have also worked here for about ten years. As someone who never went to college, I had many other jobs before. But working for Samsung was the most stable job I had. That's why I never even thought about trying to look for another job," she said.

During her time working for Samsung, Liu met her husband, who is a fellow employee at the same Samsung factory. The couple got married in 2014.

Samsung's plan to shut down the factory in Tianjin means both Liu and her husband could become unemployed by the end of 2018.

"We're facing a lot of pressure because of our age. We still need to cover our monthly mortgage payment. And our daughter is only a few months old. Many of our colleagues have two children," she said.

Liu added that she still does not have plans on what to do next or whether to find a new job, because she wants to get some answers from Samsung first on how the workers will be treated.

Despite the fact that China's "economic miracle" in the past 40 years relied heavily on the nation's hard working labor, which helped the nation earn the nickname of "the world's factory," increasing competition from neighboring Asian countries started to force Beijing to come up plans to deal with the painful transition of industrial upgrade.

Chinese authorities have introduced ambitious industrial policies, such as the policy known as "Made in China 2025," which aims to improve the quality of China's manufacturing sector and boost domestic technological innovations.

Chinese economists argued it is up to the Chinese government to help the vulnerable workers in the labor intensive low-end manufacturing sector find new job opportunities by offering them sufficient training.

"The government needs to organize vocational training for the unemployed or laid-off workers. They need to come up with a plan to guide the workers to find jobs in new industries. In fact, many of the new technology sectors need a lot of workers and are struggling to find suitable candidates. The problem is that most of the laid-off workers do not have sufficient knowledge to take on such jobs. The government needs to dedicate a lot more financial resources and energy to train those workers," Hu Xingdou, a professor of economics at the Beijing Institute of Technology, told Sputnik.

The scholar stressed that China needs to focus on improving its research and development capability to stay competition in the global manufacturing supply chain.

"China needs to transform itself from the 'world's factory' to the 'world's research center.' We need to develop more indigenous and innovative technologies. We need to focus on research and development on the key technologies, which can help turn China into a technological super power. Only this way can bring hope to the future of China's manufacturing industries," he said.

The expert pointed out that it is impossible for China to continue to compete against Vietnam or India on labor cost.

Rising labor cost in China has always been cited as one of the main reasons behind the global manufacturer's decision to relocate to neighboring Asian countries. But Liu, who works for the Samsung factory in Tianjin, said workers still had to rely on working extra hours to make a more decent salary.

According to salary details of workers at the Samsung factory in Tianjing, released by labor rights advocate group China Labor Watch in 2015, about 45 percent of the employees' monthly average salary of 5000 renminbi ($725) came from overtime pay.