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May 28, 2017

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It's time to dismantle factory towns

BEIJING -- Steve Jobs may think that it is pretty nice, but Foxconn and analysts here believe it is time to dismantle the "factory town" model that has served China's manufacturing so well for the last three decades.

Instead of making workers live, work and play in the same place, creating a virtual city within a city, there are now growing calls to separate work and leisure, allowing laborers to be better integrated in urban life.

That, said observers, would help young migrant workers from the rural countryside get used to the big cities and avoid the alienation that could lead to suicides and other social problems.

Foxconn boss Terry Gou, who is the richest man in Taiwan, told shareholders of parent group Hon Hai in Taipei on Tuesday that the model has to be scrapped.

This, despite it being the bedrock of manufacturers in mainland China, especially in the coastal regions. The factory town model also was complimented by none other than Jobs, the corporate icon of cool, just last week.

The Apple boss, whose iconic products like the iPhone and iPod are churned out by the Foxconn plant which saw 10 suicides in recent months, had said: "We look at everything at these companies, and I can tell you a few things that we know: Foxconn is not a sweatshop. It is a factory, but, my gosh, they have restaurants and movie theatres and hospitals and swimming pools. For a factory, it is pretty nice."

But Gou said the spate of suicides at Foxconn and a series of strikes at Honda's plants in China have made him realize the structure has to change.

In fact, the Japanese automaker was facing its third strike in a month on Wednesday.

China's factory model is a comprehensive hybrid habitat, a commercial reinvention of the former Chinese communist danwei (work unit) system, where the place of employment is also a home, school and recreational centre.

Foxconn's Shenzhen plant, labeled by some as the IT Forbidden City, is a monstrously huge site housing some 300,000 workers - even bigger than the population of Bedok, which is Singapore's most populated area, with some 292,000 residents.

Leslie Chang, in her book Factory Girls, gives a vivid description of one such massive factory - the Taiwanese-owned Yue Yuen plant in Dongguan, Guangdong, which is the biggest manufacturer for Nike, Adidas and Reebok sneakers.

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