VTech next in line for the Foxconn treatment

factoryJust finished a beast of a story detailing more depressing news from China of  human rights and labour violations in factories making tech kit for some of the West’s biggest brands.

Yup, it’s not Foxconn this time but Hong Kong-headquartered OEM VTech, which mainly seems to make cordless and fixed line telephones for the likes of Motorola, AT&T, Telstra, Sony and others.

The report into poor working conditions at its Guangdong factories list, if anything, worse abuses to those discovered at Foxconn. These include mandatory and excessive overtime; exposure to harmful chemicals; sub-standard living conditions; violence and bullying towards staff; and below subsistence wages.

It’s worth noting that VTech strenuously denies all the allegations.

I’m not disputing any of the findings of the Institute for Global Labour and Human Rights, nor its deliberately confrontational tone and emotive, first-person testimonials from workers at the plant – after all it needs to shame the Western companies involved into taking action.

What is more interesting is what happens now that the genie is out of the bottle.

Motorola and Telstra reacted with shock, exclaiming that compliance with the law and their own codes of conduct are essential and that, if true, these abuses are unacceptable.

Fair play to Telstra for immediately suspending sales of any VTech products while it investigates, but it seems to me that large Western technology firms are more than happy to turn a blind eye to this kind of thing as long as the labour is cheap, the production costs are kept down and no-one is making a fuss.

Saying you mandate compliance with a code of conduct but never enforcing that compliance, for example, is less than useless. As is saying compliance with local laws is compulsory when you know that, as in China, local laws are not worth the paper they’re written on – they’re either not enforced or shot through with so many caveats that the employer can effectively do what they like.

There are those who say that improving conditions in these OEM factories will push up prices at the till.

Well, that is debatable given that the OEMs are making a healthy profit here and could probably stretch to curtains and mattresses in the dorms; better food in the canteens; and certainly stools for workers to sit on during their shifts, without pushing up the cost of production too much.

I think Foxconn was just the beginning. Any tech manufacturer that breathed a sigh of relief, thinking the buck stopped with Apple, better prepare themselves for a rather uncomfortable time going forward.

Bad publicity is the only thing that seems to spur these big name brands into action and as long as there is an appetite among the public to know what misery lies behind their latest shiny gadget then the stories will keep on coming.

Geoff Crothall, a spokesman for not-for-profit the China Labour Bulletin, told me that conditions like those highlighted in the report are endemic throughout factories in the Pearl River Delta.

The best that can come of the constant media scrutiny is that these brands and their OEMs are forced to institute regular inspections and improve living and working standards across the board, because the local government certainly isn’t going to.

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China pricing itself out of the market for ex-pat IT talent

moneyA lot of the time when you’re battling deadlines or trying to sniff out breaking news stories, there’s not enough opportunity to look beyond the analyst reports, product launches and trade shows to take a more rounded view of the industry.

One of the most interesting things about watching the technology landscape from the vantage point of Hong Kong is how Asian countries are reacting and adapting to life in the shadow of China.

If local IT industries really want to thrive alongside this giant they must have access to a stream of excellent candidates – whether these are home-grown or shipped in from abroad.

I’ve written a few pieces for The Reg Jobs section now about the market for ex-pat IT professionals and while the opportunities for those cushy international reassignment packages are dwindling, there are still some great opportunities to be had if you have the right skills.

The key points to remember:

  • Local language and cultural understanding – language skills being near obligatory for work in mainland China, and ideally experience of working there previously.
  • Flexibility – kind of ties in with cultural understanding, but an ability to absorb pressure and adapt to new ways of working is key, as is any indication you may be willing to be flexible on relocation packages.
  • Good interview technique – sounds basic but employers are getting  more and more picky. You need to do your research on the company and convince them of the above points, and that you’re a good cultural fit for the organisation.
  • Technology know-how – it needs to be broad and deep and in one of the key areas Asian firms are looking for, like cloud or e-commerce.
  • Be a good teacher – the thirst for knowledge, especially in China, is huge so being able to communicate effectively with your team will make you an invaluable asset…until they’ve learnt everything.

China is far from hoovering up all the best foreign IT talent, of course, given the prescriptive language skills which most IT pros have to have to work in the country. It is also being placed increasingly on the back foot thanks to changing standards of living in the PRC, which could benefit places like Hong Kong and Singapore again.

ECA International, which produces data with which firms can work out ex-pat packages, revealed in its latest annual Cost of Living Survey that Beijing and Shanghai are now more expensive to live in the Hong Kong, while Shenzhen and Guangzhou are likely to overtake pretty soon.

A strong currency and high inflation – especially on goods foreigners buy – is making the case for placing candidates in China less compelling.

ECA regional director, Lee Quane, told me that although once you add in accommodation, HK probably tops the Chinese cities again, they are definitely catching up. Considering the higher rate of tax and social security burden in China than say Hong Kong or Singapore, mainland cities may soon prove less palatable destinations for multinationals to send staff to, especially if they can work in virtual teams.

It’ll be interesting to see how this one plays out, although as always, if you are a truly indispensable IT pro, a firm will get you at whatever cost.


BT screaming to be let into China

bt logoBT is one of those firms which has a habit of attracting bad headlines. Run ins with the regulators, misleading advertising campaigns and tales of shockingly bad customer service all spring to mind. Not so in Asia Pacific, it seems.

At the Asia Pacific Influencer Summit (yes, I am an influencer now apparently) hacks from all over A and Pac were told just how amazingly well BT Global Services is doing – the firm now boasting over 2,500 employees in nine countries across the region.

There were a few news announcements, including a new ‘retail in a box’ solution for retailers looking to tap the Chinese market, a new app designed to make it easier to manage roaming calls and save money in the process, and the launch of a data visualisation service which BT has used itself in the battle to protect its copper cables from being nicked.

The most interesting story, though, came from the APAC president Kevin Taylor, who spoke with refreshing candour about the telecoms giant’s problems with China.

He claimed China has the least advanced regulatory environment of any ‘big player’ in the world and accused it of taking a rather immature approach to competition in the country. Foreign telecoms firms cannot obtain licenses to sell their kit in the country directly, meaning they have to resort to partnerships – which BT has with China Unicom and Telecom – or joint ventures.

BT has eschewed the latter, Taylor said, because at present the foreign firm in a China JV is allowed up to only a 49 per cent share of the business. They would consider it otherwise, he added, but I reckon there may be other factors holding it back.

It’s well known now that JVs of this type usually end badly for the foreign investor. As has been claimed happened with AT&T, the Chinese will take you in, get you teach them all you know and then ditch you – possibly minus a chunk of your IP.

There are rumours – only rumours – that security concerns were behind the split between Symantec and Huawei over their JV, for example.

In the meantime, BT is “screaming” at China to be let in, its China MD Eliza Kwok told me. So what are the chances of it being able to sell directly into the country anytime soon? The smart money is on zero.

Forget that China Telecom has been allowed to set up a virtual network in the UK for Chinese ex-pats, back home in the People’s Republic it is a very different story. Here, protectionism is the watchword for government policy, and that is unlikely to change for a long, long time.


Google turns up the heat on China’s state-sponsored hackers

padlockIn an interesting development, Google this week announced that it would be notifying its Gmail users if they are under attack from state-sponsored hackers.

The web giant will flash up a red alert warning if it suspects foul play, hoping to spur its users into taking action to protect their account.

Google VP of security engineering Eric Grosse had the following:

Here are some things you should do immediately: create a unique password that has a good mix of capital and lowercase letters, as well punctuation marks and numbers; enable 2-step verification as additional security; and update your browser, operating system, plugins, and document editors. Attackers often send links to fake sign-in pages to try to steal your password, so be careful about where you sign in to Google and look for https://accounts.google.com/ in your browser bar. These warnings are not being shown because Google’s internal systems have been compromised or because of a particular attack.

Rather cryptically, Google said it couldn’t divulge exactly how it knows when state-sponsored actors are at work, so I guess users just have to put their faith in the company.

The move is a positive one for the user community – any additional measures to help educate users and protect the internet community at large are a bonus in this day of advanced cyber threats.

But just as interesting is the message Google is sending to that number one source of state-sponsored hacking: China. Just a week earlier the web giant, which famously pulled its search servers from the People’s Republic after the Operation Aurora APT-style hacking campaign hit its staff, announced new anti-censorship capabilities.

Well, to be more precise it said it would tell users – for the first time in China – when their search results were being blocked by the Great Firewall, a move which will not have gone down well in Beijing.

Now Google is at it again – under the guise of securing its users, it is making things more difficult for China’s army of state-sponsored hackers.

Not that it will deter them in any meaningful way – most will still be able to find their way into a target network if they really need to, which is what makes APTs so difficult to defend against.

Rob Forsyth, APAC director for security firm Sophos, told me that “irrespective of the validity of the threat, Google’s advice is good”.

“In these troubled times with organisations being breached, this has never been more important, in particular, do not have the same password on multiple social networking sites,” he added. “Long passwords = good.”

But how does Google actually know if an attack is state-sponsored? Well, it all comes down to the code base, according to Forsyth.

“You can tell if a single person has written/compiled it, or whether a large team has been involved,” he said.

“Further, it often has to do with the payload – what is the malware trying to do?  Espionage will look different to attacks focused on avarice.”

Interesting times for Google and China – I wonder what the Party thinks of the latest developments?