Labour Unrest at Nike and Adidas Supplier Yue Yuen Industrial Persists

Thousands of workers at a giant Chinese shoe supplier have rejected an offer for enhanced social benefits, extending one of China's largest strikes in recent times.

The nearly 10-day-long strike at the $5.59bn (£3.3bn, €4.05bn) Yue Yuen Industrial, which manufactures shoes for Adidas, Nike and Converse, has revolved around issues such as outstanding social insurance, improper labour contracts and low wages.

Employees have demanded improved social insurance payments, a pay rise and more evenhanded contracts, Reuters reported.

Pursued by the news agency, a spokesman for Yue Yuen said the firm had approved an improved "social benefit plan", and added that the business impact of the strike had been "mild" so far.

However, thousands of workers, dressed in casual clothes but with factory lanyards and ID cards around their necks, hung around the industrial estate, refusing to return to work.

Riot police were stationed at the estate.

"Basically, the terms that we announced [on 14 April] was after a very thorough internal analysis and calculation and considering all the factors including the affordability from the factory perspective," said the Yue Yuen spokesman.

"The revised plan will be effective from 1 May."

Hong Kong-listed Yue Yuen produced over 300 million pairs of shoes in 2013 at factories located in China, Indonesia and Vietnam. It reported a net profit of $434.8m last year from $7.58bn in revenue.

Wildcat Strikes

The Yue Yuen unrest is the latest occurrence of industrial activism that has emerged just as growth in the world's second-largest economy has slowed.

A worsening labour shortage has shifted the balance of power in labour relations in China. In addition, smartphones and the social media have helped factory workers coordinate plans and made them more aware than ever of the evolving environment, experts said.

In March, more than 1,000 workers took to the streets at an IBM factory in Shenzhen, bordering Hong Kong after managers announced the terms of their transfer to the new owners - Chinese PC maker Lenovo Group. Lenovo agreed in January to pay $2.3bn (£1.4bn €1.6bn) for IBM's low-end server business.

In November 2013, hundreds of employees walked off their jobs at a Nokia factory in Dongguan, near Shenzhen, complaining of changes following Nokia's sale of its mobile phone business to US-based Microsoft.

In August 2013, 5,000 workers in the eastern Shandong Province went on strike to protest India-based Apollo Tyres's planned $2.5bn acquisition of Cooper Tire & Rubber of the US. The deal collapsed but Cooper has been forced to lower its operating profit by $29m in the third quarter following the work stoppage in China.