Summary:

The massive migration of China's supply chain at the same time also caused many problems. At the end of last month, a factory invested by a Chinese company was hit in Yangon, the capital of Myanmar, for workers seeking more welfare and was temporarily shut down.

According to a Reuters report, the factory involved in the Hangzhou Hundred-Tex Garment (Myanmar) Company Hangzhou Baiyi Garment & Clothing (Myanmar) Co., Ltd. (hereinafter referred to as Hangzhou Baiyi Myanmar) has been shut down since February 9.

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Reuters said that the cause of the above incident was that a labor leader of the plant was dismissed by the factory at the end of January. Afterwards, factory workers went on strike and demanded a better performance appraisal system and medical insurance. On February 9th, it evolved into Violent impact. According to a video obtained by Reuters, a factory manager who had fled in a hurry at Hangzhou Baiyi Myanmar Company suffered from containment and assault by dozens of female employees.

The Myanmar Times reported that on January 30, the factory left the trade union leader to leave without permission, and on February 25, after the Yangon Region Arbitration Council Yangon District Arbitration Commission ruled that the above-mentioned leader of the union was expelled, the workers had Stop the strike.

The union leader named Ko Thet Paing Oo said in an interview that he changed his measles and complied with the doctor's orders. He left the factory for two weeks, and the factory’s dismissal was actually a retaliation against him because at the end of 2016, He led a strike and recovered about 70 million kyats from the factory for about 570 workers, or about RMB 357,000 yuan in overtime pay.

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On February 23, an angry worker struck the Hangzhou Baiyi Myanmar Company's factory and destroyed a lot of furniture and production equipment. According to the Chinese media Xinhua News, on February 23, seven Chinese employees of Hangzhou Baiyi Myanmar Company were trapped in the factory for 9 hours before they were allowed to leave.

However, the factory’s remarks when interviewed by the official Chinese media, Xinhua.com, differed from those of factory union leaders.

In an interview with Xinhua.net, Chen Hongwei, the factory director of Hangzhou Baiyi Myanmar Company, said that the factory had two strikes. The first was from December 7 to 15, 2016, and the second was from January 30, 2017 to By the end of February. Chen Hongwei said that more than 300 Burmese employees participated in the first strike and submitted 10 demands including additional bonuses per month based on worker's ability, Chinese employees not directly involved in management, Chinese employees not using Burmese employees' toilets, and monthly payments. Increased bonuses such as seniority bonuses. After being coordinated by the local labor department, the factory promised the above request, but after the first strike ended and the second strike began, the factory production output has not recovered to a level before the strike.

As for the reasons for the second strike, Chen Hongwei stated that on January 30, 2017, some Burmese employees asked the factory to rehire an employee who had left the company due to continuous completion, labor contract violations, and regulations, and the factory did not agree with it. The employees randomly organized another strike. During the second strike, workers asked to re-employ the above-mentioned factory-dismissed employees, overturned the bonus assessment rules established after the first strike, and reformulated them, and requested strikers to replace the original factory unions.

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After the time took place, on the evening of February 23, the Chinese Embassy in Myanmar issued an emergency statement on its official website saying that the person in charge of the Chinese Embassy in Myanmar urgently contacted the Ministry of Foreign Affairs of Myanmar, the Ministry of the Interior, and the head of Yangon Provincial Government, regarding Rangoon. China-owned garment factories were attacked by the lawless elements and demanded solemn representations from the Myanmar side. They demanded that Myanmar immediately take effective measures to ensure the personal safety of Chinese citizens and the property safety of Chinese-funded enterprises and punish the perpetrators according to law.

On February 24, the Chinese Embassy in Myanmar reported on its official website that under the concerted efforts of the Chinese Embassy Working Group in Myanmar and the police in Myanmar, the besieged Chinese employees of the Yangguang China-funded garment factory were already on February 23rd. Leave the scene safely in the afternoon. "It is reported that the five leading perpetrators have been detained by the Myanmar police."

However, according to Reuters, the local police stated that no one had been arrested in the incident of violence in the Chinese factory at the end of February, and said that once the factory resumes, workers’ representatives will continue to negotiate with the factory on the conditions of employment.

San Htwe, deputy factory manager, told Reuters in an interview that the impact brought about 75,000 U.S. dollars to the factory. The factory is planning to seek compensation from the Myanmar Ministry of Labor.

Since Hangzhou Baiyi Myanmar is one of the 40 suppliers of the Swedish brand H&M in Sweden, it has also received the attention of the Hennes & Mauritz AB (HM-B.ST) Hayn Morris Group, the world's second-largest clothing retailer.

Hennes & Mauritz AB Hayn Morris Group said in a statement that it is closely monitoring the conflict and that the cooperation with the factory is temporarily unchanged.

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Unlike Zara and its parent company's global supply chain, the supply chains of the other three fast fashion groups are basically concentrated in Southeast Asian countries. The Chinese market, which has been the mainstay, has recently suffered from a sharp rise in labor costs and the Chinese industry’s industrial restructuring initiatives. Chain companies began to move their factories to lower-cost Southeast Asian countries such as Bangladesh, Vietnam, Cambodia, and Myanmar.

In early February, Hong Youli, founder, chairman and chief executive officer of underwear manufacturer Regina Miracle International (Holdings) Limited (2199.HK) Virginie International (Holdings) Co., Ltd. (hereinafter referred to as Virginie) stated at the media luncheon. In the future, the company's capacity in Vietnam will exceed Shenzhen. According to the Hongyou Lizhi, China and Vietnam plants currently have 19,000 and 13,000 employees respectively, and they will employ additional staff as soon as possible. At present, there are 700 second plants in Vietnam, which are expected to increase to 6,000, while the third and fourth plants in Vietnam will be held this year. In June and December, it is expected that there will be nearly 4,000 employees in factories in Vietnam and Shenzhen. After the four plants in Vietnam are fully operational by the end of 2018, the capacity will be at least twice that of Shenzhen.

According to the International Labour Organization, the current minimum wage standard for employees in the textile industry in Myanmar is US$63, which is a six-day working week, which is lower than the monthly minimum wage of US$90-140 in neighboring countries such as Vietnam and Cambodia.

For Myanmar's just-started but rapidly developing labor-industry relationship in the apparel industry, Maung Maung Lay, vice president of business affairs in Myanmar, said in an interview that there is still a long distance between Myanmar and international labor law, but “The city of Rome is not established in one day” and investors need patient.

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