Multinationals in China Not Spared

For the past five years, the violent and systematic suppression of Falun Gong has been the centerpiece of China’s worsening human rights record. Little known, however, is how that campaign impacts businesses in China, as U.S. and other foreign companies are being thrust into its midst.

Falun Gong Slave Labor

Jiangping Wang is handicapped and can’t knit as fast as the others. It’s almost 2:00 a.m. and the Division Six prisoners have been working since dawn. Wang is exhausted. Prison guards heave bricks at his chest. His Falun Gong acquaintances nod off only to be wakened by police jabbing them with scissors.

There are deadlines to meet – a quota of cashmere sweaters for Tianshan Wooltex – or guards won’t get their bonuses.

Forced labor, such as that which Wang is put through, has become both a form of torture and a source of great profit for Chinese labor camps. With the enormous supply of free labor that comes from the Laogai (lit. “reform through labor”), China has lured overseas businesses – many unknowingly – into its profit-through-slave-labor system.

The suppression of Falun Gong over the past five years has fueled this very problem by adding anywhere from several hundred thousand to 2 million people to the 6-million-plus already incarcerated in China’s 1,100 camps. Moreover, the Central Government’s order that “no measure is too excessive” to stamp out Falun Gong has not only opened the door for labor camps to use prisoners however they wish (including U.S. citizen Charles Lee – see page 9), but has actually encouraged abusive measures.

Some foreign companies in China, including those who conduct regular inspections of their China-based factories, are left unaware of the true source of goods they produce.

It’s not uncommon for labor camp goods to be delivered to factories – where they were supposedly produced – under the veil of night. Similarly, labor camp officials often “contract” out inmates’ labor, only to pocket the profits themselves.

“It’s complicated and pervasive,” says Alan Adler, the principal of a New Jersey-based manufacturing and importing company. Adler has owned manufacturing operations in China for 25 years and heads up a China-related human rights organization.

“In order to be highly competitive, and at the same time avoid universal scorn, Chinese manufacturers have elaborate and clandestine ploys that make it almost impossible to know what parts of a product are being made by slave labor.”

Corporate Ethics Challenged

In a much publicized case, in the fall of 2003, a large U.S.-based cosmetics company, acting under pressure from Chinese authorities, had been requiring its sales associates in China to sign a statement promising they would neither practice nor advocate for Falun Gong.

Several employees of the cosmetics giant lost their jobs for refusing to sign. In one reported case, an individual who spoke in favor of Falun Gong at a company meeting in China was turned over to authorities. The individual’s status is currently unknown.

“Once they’re identified as Falun Gong, Chinese citizens are often sent to mandatory brainwashing sessions where they’re deprived of sleep and tortured. They do this to make them ‘repent,’ which means give up their practice,” explains Falun Dafa Information Center spokesman, Erping Zhang.

“Most companies don’t realize the ramifications of the actions Chinese officials impose on them with respect to Falun Gong.”

The cosmetics company later reversed the mandate after senior members of the U.S. Congress expressed disapproval. “We are shocked that an American company,” the group told the company, “would be willing to enlist in the Chinese Government’s brutal campaign to identify and persecute members of a particular spiritual movement.”

In December 2003, Switzerland-based Helvetica Invest AG removed a leading German automaker from its stock option list on similar grounds. Helvetica learned that the automaker had required people in China seeking employment to sign a statement similar to that of the cosmetics company. The statement included a promise not to practice or support Falun Gong.

But perhaps the worst fallout of China’s repressive measures lies elsewhere. Some fear that foreign investment capital is being funneled into avenues of persecution, especially targeting Falun Gong.

According to the President of the World Organization to Investigate the Persecution of Falun Gong, John Jaw, the amount of money spent persecuting Falun Gong is well into the billions.

“With so many programs throughout China – from rural education to combating AIDS – lacking money, clearly the Chinese leadership doesn’t have extra budget to spend, so where are the billions used on Falun Gong coming from?” Jaw asked.

Forced to Oppose One Third of China’s Population

As a traditional Chinese Qi Gong (or “Chinese yoga,” as many call it) practice, Falun Gong was widely endorsed by the Chinese government for its health benefits before Chinese leader Jiang Zemin launched the persecution campaign in 1999. Constituting fully 8% of the population in China – 100 million people – adherents of Falun Gong were from every walk of life and segment of society – university students, business leaders, the retired, and even government and military elite.

Including friends and family, it’s safe to say that roughly one third of China’s population is suffering to some extent from Jiang’s campaign.

Be it through shadowy slave labor or outright denial of employees’ basic rights, Jiang Zemin’s faction pits corporations against a huge segment of the Chinese populace.