It's a crisis time. It's a festival time. It's a time we must talk about labor.

The near collapse of the Detroit Big Three - and the thousands of factory closures and "prolonged holidays" (as in the Chinese context) that could happen every day around the globe remind people of the age-old and deeply entrenched problems (clash is a word that I hate to use) between labor and capital.

The global crisis is not only posing a new challenge to China's general business, but also one to its overall practices in labor relations. Both are of unprecedented nature, or in terms of severity, are something this nation has never encountered before.

The labor challenge could be even more severe as the dwindling sales facing the nation's export-led manufacturing and its workers are becoming worse by the day, particularly when major festivals are around the corner.

All this is happening while it still will take some weeks, if not months, for the government's economic stimulus package to begin to work and to generate new jobs.

But it is about time - for China to take the challenge in labor relations. Not many Chinese have yet asked themselves what kind of a labor system they are to have once the age-old urban/rural dichotomy is no longer the primary feature of the nation's division of work.

During the 1980s and 90s, any industry job was worth grabbing for the rural youths, who got little work to do and little money to make in their densely populated home villages, where every square inch of land could have already been utilized.

By one official account, by the end of 2006, of China's all rural people, those working on off-farm jobs already totaled 130 million, while another 400 million still remained in their villages. But in reality, observers always tend to guess that the number of people entirely depending on farm incomes is much smaller.

This being the case, as many of the erstwhile rural youths are already employed by urban companies, and as many of the companies face the threat of a global business crisis, it would be the time to find out which labor management practices work better in this society and which work poorly.

One of the key lessons from the way the Asians have been building their market economy is that, while they do learn from the West, they do not take everything for granted. They try to have their own way whenever and wherever it is feasible to do so. And a key component in their own way is the management of labor relations.

With backgrounds rooted in their village communities, Asians tend to have misgivings about the typical employer/staff relations in the US companies - about both the way the executives treat themselves and their staff, and the ensuing "class war" and litigations over petty interests.

It is pathetic to hear the debate in the US media in relation with the fate of the Detroit Big Three, in which so much energy is being directed to the labor costs - whether they are too high, or whether counted in some other ways, they are not as high as they appear.

The absurdity of such a debate is that all sides are continuing to fight for their own interests amid such a major national crisis - by offering woolly accounting methods to their own advantage, rather than sharing responsibility.

In contrast, in Asia, it is a common practice that companies in crisis time would quickly shift to cut wages, sometimes including a deeper cut in executive pays, in order to retain as many jobs as possible. I saw that in Hong Kong during the Asian financial turmoil in many companies.

The Asian practice is being introduced into the Chinese mainland this time. On Dec 15, the central government called all State-owned enterprises at the national level to "stabilize staff size" and avoid job cuts, through curbing spending projects and executive pays. This should be the way to boost the economy's higher resilience - rather than leading both labor and capital to the courthouse and litigious debates.

(China Daily December 22, 2008)