As the year end approaches, due to severe economic downturn, Chinese companies are currently experiencing waves of layoffs and wage arrears issues. On November 21st, hundreds of workers in Shanghai staged a protest demanding unpaid wages and were met with suppression.
A viral video showed the incident happening in Qibao Town, Shanghai. The workers of Shanghai Guoli Auto Leather Accessories Company (“Guoli” for short) took to the Hushong Road to block traffic in protest of the long-term wage arrears and forced resignations by the company. Police dispersed the protesting workers, leading to chaos and traffic congestion at the scene.
Qibao Ancient Town is located in Minhang District of Shanghai, just 18 kilometers away from the city center.
Footage and photos related to the workers’ road blockade were quickly deleted from social media platforms. Only Caixin, a mainland Chinese media outlet, reported on the incident.
According to Caixin’s report on November 21st, in the morning, a group of workers dressed in white uniforms gathered at the entrance of Shanghai Guoli headquarters on Hushong Road at the intersection with Zhongchun Road in Minhang District of Shanghai, to demand their wages.
Hushong Road is a major road for entering the city from Songjiang District, with heavy traffic during the morning peak hours. Videos from the scene showed traffic congestion on the inbound lane of Hushong Road.
The Caixin report mentioned that a worker who had been with Guoli for over 20 years stated that starting from March 2024, Guoli had been paying frontline workers a wage of only 2690 yuan per month, based on the minimum wage standard for Shanghai workers. The October wages were not paid, affecting over 2000 workers. The workers mentioned that due to the company leadership’s absence, they had no choice but to resort to this protest as a form of pressure.
Another worker with 8 years of experience at Guoli mentioned hearing that the company had recently paid salaries to the management team, but had not provided any explanation to the frontline workers.
Established in 1996, Guoli primarily specializes in producing genuine leather seat covers for automobiles, with historical collaborations with car manufacturers such as SAIC Volkswagen, SAIC General Motors, and FAW Volkswagen. The company’s controlling shareholder, Liu Wenqi, also serves as a director at Shanghai Yuantong Seat System Co., Ltd., which was a supplier of high-speed rail VIP seats.
A former employee from Guoli’s quality assurance department mentioned that Guoli used to be a top-tier in the seat leather industry in its early years but has gradually declined since 2021. Reportedly, Guoli’s main clients were joint venture car manufacturers, and with the shift of the domestic car market toward new energy vehicles, many new energy vehicles began using integrated seats. As a result, Guoli’s original customer base declined, and they were unable to secure orders from new energy car manufacturers.
Multiple workers on site indicated that while there were business opportunities for the company in 2023, the situation had deteriorated significantly in 2024, with the factory on Zhongchun Road ceasing production at the beginning of the year.
A circulated notice indicated that Guoli was willing to offer special “generous treatment” to employees with over three years of service who volunteered to resign, including a “compensation” equivalent to three months of the local minimum wage.
However, many current employees of Guoli in the comment section stated that they had not received the previous month’s Shanghai minimum wage as expected since the 12th, and the factory had been non-operational for half a year, with employees idling every day. Some workers also pointed out two major issues with the notice: the compensation was based on three months of the local minimum wage standard, not the average wage of the previous 12 months, and the recommendation for priority admission as mentioned in the notice might not be adhered to when the time comes.
The economic downturn is affecting various industries. On November 21st, the Chinese media outlet “Xiangshi Automotive” reported that the previously dominant new force sales champion Nezha Motors is currently in trouble, with significant layoffs, salary reductions, three major factories suspected of halting operations, and multiple suppliers publicly demanding payment.
On November 21st, the “Shanghai Observer News” reported that many individuals claiming to be employees of the well-known Shanghai chain restaurant brand “Simply Thai” posted on social media, alleging unpaid wages and failure to pay social security contributions.
Many accounts purportedly belonging to current or former employees across various social media platforms posted claiming that the boss of “Simply Thai” had not paid wages for two months, had disappeared, and there were allegations of the boss absconding.
On November 15th, in Zhuhai Golden Bay Area of Guangdong, employees of the Wen Runde Company in Sanzao Town protested over the owner fleeing after the company owed them millions of wages, displaying banners demanding “return our hard-earned money.”
According to data collected by the “China Dissent Monitor” established by the overseas human rights organization “Freedom House,” public protest events in the third quarter of this year increased by 27% compared to the same period last year, with a majority of these events being related to economic issues.
Between July and September 2024, the organization recorded a total of 937 public protest events, with 41% initiated by workers.