The Global Slavery Index estimates that on any given day in 2016 there were over 3.8 million people living in conditions of modern slavery in China, a prevalence of 2.8 victims for every thousand people in the country. This estimate does not include figures on organ trafficking.

The Chinese Ministry of Public Security (MPS) publishes some data on trafficking-related investigations and convictions. In 2016, MPS reported investigating 1,004 cases of human trafficking and arresting 2,036 suspects. Of those cases, 45 were suspected cases of forced labour, involving the arrest of 74 suspects. In one investigation, the Chinese government reportedly arrested 464 suspects who were involved in labour trafficking of disabled victims. The government convicted 435 individuals for sex trafficking, 19 individuals for labour trafficking, and 1,302 individuals were convicted in cases in which the type of exploitation was unclear.1

Forced labour

China’s meteoric economic rise over the past half century is a striking example of the transformative power of the market economy. China is now the second largest economy2 as well as the second largest importer3 in the world. Much of its rapid economic development has been the result of a domestic economy specialising in the production of labour-intensive, cheap goods for export.4 Forced labour mainly occurs in the production of these goods, including in the manufacturing and construction sectors, as well as in more informal industries, such as brick kilns. Although there are indications of a larger-scale problem, forced labour remains underreported in the local media.5 In 2016, cases of forced child labour were detected in a garment factory in Changshu, Jiangsu Province, where underage workers were forced to work overtime and beaten if they refused. They also had their passports and mobile phones confiscated if they attempted to run away.6 Also in 2016, police rescued six disabled people from forced labour in a brick factory in Yunnan, where they had been forced to do physically hard work without pay.7

Among the many manufacturing industries, the electronics sector has been under particular scrutiny since it was revealed that employees of Chinese electronics manufacturing giant Foxconn, which produced parts for Apple’s iPhone, were allegedly subjected to exploitative working conditions.8 Students from vocational courses are reportedly forced to work in the electronics manufacturing sector under the threat of failing to graduate if they decline. These jobs are disguised as “internships” but are usually simple production line jobs.9 Such cases of forced labour have been documented in electronics factories supplying major brands such as Apple, Acer, HP, and Sony, among many others.10

The construction sector in China is known for the common practice of paying workers in arrears, with wages sometimes being withheld for up to a one year.11 Construction workers are reportedly subjected to other exploitative practices such as withheld wages and non-payment, excessive and illegal overtime, and widespread lack of employment contracts – all of which are indicators of forced labour.12 Amid a recent slowing of economic growth in China after decades of robust growth, in 2015 nearly three million Chinese workers reported not being paid on time, with workers in construction being most at risk of underpayment.13

Other labour-intensive industries in China are also creating a demand for low-paid foreign labour. The sugarcane industry in China’s southern Guangxi province attracts an estimated 50,000 illegal Vietnamese workers.14 Factory towns in Southern China have been found to employ illegal workers from Vietnam on a widespread basis. These workers are often smuggled into the country by Chinese human smuggling syndicates who work together with Vietnamese gangs. The syndicates make their profits by claiming a portion of the workers’ monthly wages while also charging factory owners a fee.15 Another case in May 2017 revealed that seven Filipino women were deceived by Chinese human traffickers and forced to work on farms in China.16 The women were promised marriages to local Chinese men and better lives but found themselves in conditions of exploitation.17

State-imposed forced labour

The Chinese government officially announced in November 2013 that it would abolish the Re-education through Labour (RTL) System, in which inmates were held and routinely subjected to forced labour for up to four years.18 However, a 2017 report by the US-China Economic and Security Review Commission alleges that China still maintains a network of state detention facilities that use forced labour. Some former RTL camps have apparently been converted into drug rehabilitation centres or so-called “custody and education centres” which people are generally sent to without charge or trial. Detention length is generally shorter (between six months and two years) than in the former RTL camps.19 State-imposed forced labour allegedly continues to occur in these facilities.20 Chinese activist lawyer Chen Guangchen also supports this claim, citing the example of Christmas decorations that are produced through a system of forced labour in many detention facilities and prisons across China.21

Forced sexual exploitation of adults and children

Traffickers reportedly use fraudulent job opportunities to lure foreign women to come to China.22 In some cases, women may be coerced,23 drugged,24 and abducted25 by traffickers. Both Chinese women and women from neighbouring countries such as North Korea,26 Vietnam,27 Cambodia,28 Laos, and Myanmar,29 as well as those from further afield in the Americas and Africa,30 are at risk of trafficking for forced sexual exploitation and also forced marriage. Large numbers of North Korean women leave North Korea to go to China every year, with brokers often facilitating the women’s travel to China with the intention of selling them against their will to Chinese households or forcing them into sex work once they have arrived.31 A recent UN Commission of Inquiry report lists various instances where North Korean women were sold or trafficked into forced marriages and subjected to sexual exploitation by their “husbands” or other male family members.32 Although less is known about forced sexual exploitation of children in China, it has been noted that Chinese children, including those “left-behind” children, who are in the care of relatives in their rural home towns, and girls from neighbouring countries, such as Vietnam, Russia, and Mongolia, are trafficked into sexual exploitation and forced marriage.33

Forced marriage

The gender imbalance in China generates a demand for brides for Chinese men,34 particularly in rural areas,35 but also cities and smaller towns on the eastern seaboard,36 where the issue is most pronounced. Some parts of China still have cultural traditions that expect men to pay a dowry to the bride’s family. Due to the lack of women at a marriageable age, local dowry prices have skyrocketed, which means that “buying” a foreign wife is sometimes a cheaper option than marrying a local woman.37

Another factor exacerbating this situation is the newfound financial independence of many Chinese women who grew up under the now-abolished one child policy. Whereas these women would have traditionally been overlooked in favour of a son, many of them benefitted from high-quality education that has led them to good jobs.38 The fact that many of these women choose their career over marriage further fuels demand for foreign wives.39

This situation has given rise to a thriving industry of professional marriage brokers who operate through “mail-order bride” websites. The cost of such arranged marriages, which typically includes broker payments, a dowry, and legal fees, can amount to tens of thousands of dollars.40 However, the profitable foreign bride trade has also attracted human traffickers.41 While some women may agree to marry voluntarily, they are often deceived as to the conditions of their future marriage or the nature and situation of their husbands-to-be.42 The most frequent destinations for marriage migrants (including those that were trafficked for forced marriage) are provinces such as Jiangxi, Henan, Anhui, Hainan,43 and Yunnan,44 where the gender ratio is particularly imbalanced.

Organ trafficking

Although the Chinese government announced in December 2014 that it would end the harvesting of organs from executed prisoners and instead accept only organs for transplants that citizens have donated voluntarily,45 reports suggest that state-sanctioned organ harvesting still occurs across China.46 Practitioners of Falun Gong, a traditional Chinese spiritual practice that is persecuted by the Chinese government, are particularly vulnerable to forced organ transplanting. There are also members of other groups who are held as prisoners of conscience, including Uyghur Muslims, Tibetans, and house church Christians, who are potentially at risk of organ harvesting.47 A 2016 research report by former Canadian politician David Kilgour, human rights lawyer David Matas, and journalist Ethan Gutmann highlights that the scale of organ harvesting is much higher than previously assumed. The report concludes that an estimated 60,000 to 100,000 organ transplants are done in China every year, although the government officially claims that only about 10,000 transplants are undertaken every year.48 This discrepancy, together with the extraordinarily short waiting times for an organ transplant in China, reinforces public suspicions that organs are taken from prisoners of conscience.49 It is alleged that the organ transplant industry is a highly profitable enterprise that is largely run by the Chinese military.50 However, critics have challenged the allegations by Kilgour, Matas, and Gutman, claiming that their numbers are unrealistically high and that it is unlikely China could be conducting such large amounts of transplants without them being uncovered.51

Imported products at risk of modern slavery

While China is affected by modern slavery within its own borders, the realities of global trade and business make it inevitable that China, like many other countries globally, will be exposed to the risk of modern slavery through the products it imports. Policymakers, businesses, and consumers must become aware of this risk and take responsibility for it. Table 1 below highlights the top five products (according to US$ value, per annum) imported by China that are at risk of being produced under conditions of modern slavery.52

Table 1Imports of products at risk of modern slavery to China

Laptops, computers, and mobile phones are the top product category at risk of modern slavery imported by China. In 2015, China imported a total value of US$1.6 billion of these electronic products from Malaysia, which has been found to use forced labour to produce them.53 Fish imports from various countries considered at-risk amounted to nearly US$1.5 billion. China also engages in coal trade with North Korea, which allegedly uses state-imposed forced labour to sustain many of its economic sectors, including the coal industry.54 In total, China imported US$954 million worth of coal from North Korea. China sources about US$820 million worth of clothing and accessories from four Asian countries (India,55 Malaysia,56 Thailand,57 and Vietnam58) as well as two South American countries (Brazil,59 Argentina60) which are suspected of subjecting workers to forced labour in this industry. China receives more than 50 percent of its overall sugarcane imports from Brazil, which is suspected of using modern slavery in its production (worth US$756 million).

Vulnerability

Within China, there are extreme disparities in income levels by region, along with an enormous income gap between rural and urban areas. In comparison to the eastern region, which has the highest income per capita, the western region of China is much less developed.61 Poverty is the main driver for the migration of rural Chinese, whose levels of education and income is generally lower relative to the urban Chinese population.62 Unable to find work in their hometowns, these individuals become part of China’s “floating population” of migrant workers moving from rural to urban areas in search of work. An official government estimate from 2015 places the number of migrant workers at 277.47 million and the number of people employed in urban areas at 404.10 million.63 Accordingly, migrant workers account for about 67 percent of the urban workforce.64 Research on internal trafficking in China has identified trafficking flows to more economically developed provinces in the East, such as Zhejiang, Fujian, Jiangsu, and Shandong. In contrast, the source provinces are largely less developed, namely Yunnan, Guizhou, Sichuan, and Xinjiang.65

Another factor contributing to the vulnerability of Chinese internal migrants is China’s hukou(household registration) system, which limits citizens’ access to public services to their official city of residence. As a result, migrant workers are unable to receive the same social benefits as local urban residents. Despite reforms to the hukou system to allow access to basic services for migrant workers (that is, those living outside their place of household registration),66 they still have reduced access to public health insurance,67 family planning services, and education for their children compared with city residents.68 Chinese internal migrant workers in urban areas are more likely to be employed in sectors where employment is informal69 and where there are no written contracts,70 such as in construction.71 One survey conducted on urban employees across six cities found that informal employment comprised 33 percent of the workforce.72 A 2014 survey by China’s National Bureau of Statistics found that 62 percent of China’s then 274 million migrant workers lacked contracts.73

A flow-on effect of the large-scale migration of rural Chinese to urban areas are the “left-behind” children as a result of their parents’ absence. While it was previously estimated that there are 61 million of these children in rural areas,74 the Chinese authorities officially revised the definition of “left-behind” children, resulting in a stark decrease in their numbers to 9 million in 2016. The former definition included any child with one migrant worker parent, but the new definition includes only children whose parents are both migrant workers. Additionally, the age range was narrowed from children under 18 years to children under 16 years of age.75 While the neglect of their parents may cause a whole range of issues such as mental health problems,76 they may also be at risk of abduction, child labour, and commercial sexual exploitation.

China has the third largest diaspora in the world. As of 2011, there were more than 40.3 million overseas Chinese residing in 148 countries, with Australia, Canada, New Zealand, and the United States as the main host countries for Chinese immigrants.77 In some cases, human smuggling syndicates, such as the infamous Snakeheads, use their personal networks in source, transit, and destination countries78 to facilitate the voluntary transport of Chinese people, particularly from Fujian and Zhejiang provinces,79 to neighbouring Asian countries, such as Hong Kong, Taiwan, Japan, and Vietnam, and Western countries, such as the US,80 the UK,81 and Australia.82 Research did not conclude that trafficking or forced labour was an element in this activity. However, its illegal nature, in addition to the possibility of defaulting on the high fees charged for this transportation, may render migrants vulnerable to labour exploitation once they are in the destination country83 – either at the hands of the smugglers84 or other parties. Fees for transnational smuggling can range from US$ 1,000 to US$ 70,000 (median of US$ 50,000)85 per person, with lower prices for potential migrants who have a personal connection with the smuggler.86

The United Kingdom has a substantial undocumented Chinese diaspora. Many of these Chinese individuals, once they are successfully smuggled into the country, are desperate to pay off their smuggling fees and are thus more likely to end up in exploitative living arrangements. This has created a profitable and mostly locally operated industry in the UK that provides illegal Chinese migrants with services that in turn generate further profits for employers in the legal and illegal economy.87 Of the 3,805 potential trafficking victims referred to the UK Government’s National Referral Mechanism in 2016, 241 victims were Chinese nationals. The most commonly reported exploitation type among these potential Chinese victims was labour exploitation (139 reported cases).88

North Korean refugees can become vulnerable to trafficking,89 commercial sexual exploitation,90 cyber pornography,91 and forced marriage92 when they arrive in China. The illegal transit of North Korean refugees travelling to and via China is a multi-million dollar industry facilitated by a network of brokers.93 These brokers bribe North Korean and Chinese border guards to allow passage94 – for which the border guards are demanding increasingly high prices (around US$8,00095) as a result of the intensifying crackdown on illegal transit from North Korea to China.96 The vast majority of these victims are women97 and the possibility of ending up in slavery-like situations in China is sometimes seen as a better alternative to staying in North Korea.98

Response to modern slavery

Forced labour is a criminal offense as laid out by section 244 in the Chinese criminal code,99 stating that “’whoever forces any other person to work by violence, threat or restriction of personal freedom will be criminally liable.”100 This includes not only employers but recruiters, transporters, and people playing any other role in subjecting another to forced labour.101 Victims of forced labour are able to obtain compensation for their ordeals. The government has made efforts to improve and develop the victim assistance system, which includes a compensation fund for victims of forced labour.102 Additionally, article 96 of the Chinese labour law prohibits forced labour.103

Human trafficking of women and children up to the age of 14 is currently criminalised under Article 240, but this does not extend to men, and to that effect to boys over the age of 14.104 Article 241 on human trafficking was tightened through the ninth amendment to the penal code in 2015. Previously a “buyer” of a trafficking victim would be immune from prosecution if that person had not disrupted the victim’s rescue. The amendment modified article 241 so that the buyer is now subject to criminal liability, though the court may exercise a discretion to reduce the sentence. Closing this legislative loophole is hoped to deter more potential buyers from engaging in human trafficking.105

The Supreme People’s Court issued a new judicial interpretation on trafficking in women and children that entered into effect on 1 January 2017. It defines as illegal, trafficking matchmaking that involves subtle coercive measures such as withholding of passports, restriction of freedom of movement, and taking advantage of vulnerabilities such as language barriers, or unfamiliarity with the destination in order to sell the victims against their will.106 It also stipulates that buying abducted women and children to organise or force them to engage in prostitution or begging, in violation of the administrative laws, shall result in combined punishment for several crimes.107

In 2008, China enacted a Labour Contract Law in an effort to formalise all employment relations.108 This gave workers robust protection (including higher severance pay and guaranteed social benefit contributions) and made contracts compulsory for all workers.109 An amendment made to the law in 2013 allows for greater protection of workers who are employed indirectly via a recruitment agency. These workers – sometimes referred to as dispatch workers – are reportedly more vulnerable to exploitation, such as forced overtime110 and underpayment of wages.111 The amendment guarantees contract workers the same rights as their directly-employed counterparts, such as the rights to social benefits (including pensions, health insurance, and unemployment benefits)112 and payment of their full wage.113 Reportedly, however, the law is not effectively enforced.114

A government-run arbitration pathway is available for victims of forced labour through Labour Dispute Arbitration Committees (LDAC).115 A 2008 law, entitled the Labour Dispute Mediation and Arbitration Law, sets out the procedures and responsibilities for these committees,116 which are contained within some unionised industries in China.117 Alternatively, workers may approach their local communist party organs or local People’s Congress committee to lodge their complaints or pursue legal arbitration.118 Free legal services are available for foreign and Chinese victims of forced labour.119

In March 2017, the Chinese government succeeded in identifying 10 cases of unpaid wages and took remedial action.120 The discovery came as a result of a series of investigations in the construction sector. These were conducted across several government-sponsored projects in provinces including Heilongjiang, Inner Mongolia, Hunan, Zhejiang, and Shanxi.

However, various factors deter victims from seeking help, such as the possibility that they will be punished for crimes committed while enslaved. The government’s National Action Plan to Combat Human Trafficking states that the penalties for victims who are deceived or coerced into engaging in criminal activity are to be reduced or exempted. However, victims of commercial sexual exploitation are reportedly punished for engaging in prostitution, an activity that is illegal in China.121

Another deterrent is the lack of protection afforded to victims and their families during the court process. A media report from 2015 described a case where a victim’s father was intimidated into silence by police officers.122 Access to shelters and other support services for foreign trafficking victims is inconsistent; individuals and volunteer organisations have provided help to foreign female victims, but anecdotal evidence suggests that government shelters are ill-equipped for foreigners, with reports of victims being turned away.123 Fearing deportation, North Korean women victims in China also do not approach the local authorities for assistance and the only support services available to them are NGOs operating unofficially.124

While the Chinese government is making progress on reforming the hukou system to help solve the migrant worker problem, it is a complex undertaking. For example, it is impossible for the Chinese government to suddenly be able to provide social services to people in already heavily overpopulated cities such as Beijing and Shanghai. Therefore, the Chinese government has introduced regulations that are designed to channel migrants to lower-tier cities where they can obtain an urban hukou more easily compared to China’s largest cities.125

It is currently unclear to which extent state-imposed forced labour has been fully abolished.126 The system, known as “Re-education Through Labour,” was formally abolished in 2013, but the government has stated that extrajudicial forced labour may still occur in prisons.127 This is facilitated by complicit government officials and prison guards who force inmates – including some who have not undergone a trial and are thus not confirmed criminals128 – to work and may even subject them to torture as punishment.129

The Chinese government’s announcement in 2014 proclaiming to end the harvesting of organs from executed prisoners and instead accept only organs for transplant that citizens have donated voluntarily130 failed to specifically include the ending of organ procurement from prisoners of conscience, such as Falun Gong practitioners. A 1984 provisional regulation that allowed the practice of organ procurement from executed prisoners was also never officially replaced, meaning that the practice of organ harvesting from prisoners is still permitted by the legal framework.131

The Chinese government classifies North Koreans as economic migrants rather than refugees,132 thus making their residency status illegal in China. A bilateral agreement between the two countries obliges Chinese authorities to forcibly repatriate any North Korean national who is found to be residing in China.133 Upon return, these individuals face public execution, torture, removal to labour camps,134 or sexual violence135 as punishment for unauthorised international travel.136 The clandestine nature of the activity makes it extremely difficult to measure, but one 2012 study places the number of North Koreans living in China at 15,000.137 Other NGOs estimate that the number may be as high as 100,000138 or 200,000.139

Response to modern slavery in supply chains

Public procurement

China’s Public Procurement Law lists a number of requirements that must be fulfilled by all suppliers whose goods or services the government is seeking to purchase. Article 22 of the law states that the enterprise must have a good business reputation, a good history of paying social security funds, and no “significant illegal record in business activities” in recent years.140 The law also states that projects should contribute to the national social development policy objectives141 and that information on these activities should be made publicly available.142 Article 50 states that a contract may be amended or cancelled should it cause any damage to social public interests.143 However, the guidelines do not specifically focus on minimising the risk of modern slavery in Chinese government supply chains.

There is no requirement for officials to conduct due diligence to ensure that projects are free of forced labour. Officials do not appear to be given any training on how to identify assets that are likely to contain slavery in their supply chains. Procurement training is provided but it is unclear if the curriculum includes modern slavery.144

Business supply chains

In early 2017, the Chinese government made a positive step towards reducing forced labour in both foreign- and locally-owned enterprises.154 The Ministry of Human Resources and Social Security (MOHRSS) announced and began the implementation of two new measures to punish and prevent labour violations. Under a new grading system which measures employers’ compliance with labour regulations, known as the Measures for Publicising Material Violations of Labour Security, employer misconduct will be publicised on the MOHRSS website and in local news outlets; offending employers will also be subject to more frequent labour inspections.155 Violations that could attract such a penalty include non-payment of wages and forced overtime.156 A second set of measures, called the Measures for the Credit Rating Evaluation of Enterprises in Labour Security Compliance, state that the credit ratings of these offending employers may also be downgraded.157

In China, there is no legal requirement for businesses to disclose cases of modern slavery that they identify in their supply chain. However, some businesses, particularly in the construction sector,158 voluntarily publish written statements on their websites advertising their commitment to eradicating forced labour in their conduct. Such publications may include declarations that the employer will not collect any collateral from employees (such as identity documents or deposits from workers as conditions of employment),159 utilise prison labour,160 or force workers to work overtime.161

Corporate social responsibility (CSR) more generally, has grown in importance in recent years, with 1,027 Chinese companies publishing CSR reports in 2016. Six hundred of these were from state-owned enterprises,162 which have become more observant of CSR in recent years possibly as a result of a set of CSR guidelines published in 2008163 by the central government’s State-owned Assets Supervision and Administration Commission (SASAC).164 However, CSR efforts in China tend not to focus on human rights because of political sensitivity165 and the perception that they are not relevant to business activities.166 Labour conditions are among the most well-reported in Chinese CSR reports, covering such topics as work safety and wages.167

Observers note that businesses headquartered in the more economically-advantaged first-tier cities may be more likely to engage in CSR activities.168 Businesses in export-oriented sectors such as textiles, electronics, and manufacturing are also considered leaders in CSR as a result of the pressure they receive from their international suppliers to perform ethically.169 The textiles industry has demonstrated initiative in improving CSR practices. For example, the China National Textile and Apparel Council, a major industry body, introduced a management system for businesses called the China Social Compliance 9000 for Textile and Apparel Industry.170

Recommendations

The government of China should:

Strengthen legislation

• Expand the human trafficking law (Criminal Code Article 240) to include men, including boys over the age of 14, as possible victims.
• Introduce laws that stop the prosecution of victims for crimes committed as a direct result of being trafficked.
• Pass legislation to criminalise the charging of recruitment fees to the employee.
• Reform the custody and education system in line with the Chinese Constitution and Legislation Law and ensure that forced labour is fully abolished in all state detention facilities.

Improve victim support

• Encourage existence of labour-focused NGOs and support their capacity in victim assistance and remediation.
• Establish specialised and coordinated units within key authorities, such as the Ministry of Public Security, with necessary skills and proper resources to identify and assist domestic and foreign victims.
• Improve the coordination between nongovernmental organisations and key government agencies for modern slavery initiatives, focusing on the recovery and repatriation process of slavery victims.

Strengthen coordination and transparency

• Introduce an independent government body to oversee China’s response to modern slavery.

Address risk factors

• Undertake efforts to improve conditions for rural populations by affording them access to education, medical services, and social insurance, especially pensions.
• Find alternative ways to support the reform of the hukou system, for example by involving civil society organisations to provide support services in urban areas.
• Prosecute government officials for corruption and complicity in trafficking cases and especially forced labour in detention facilities.
• Stop forcibly repatriating North Korean citizens.

Eradicate modern slavery from the economy

• Support trade unions to strengthen their capacity to help establish enterprise grievance mechanisms.
• Conduct labour inspections in informal, high-risk sectors such as manufacturing, construction, and agriculture.
  • Expand current voluntary corporate social responsibility initiatives by passing legislation mandating modern slavery annual reporting by large companies.