A blog post written by the wife of a Chinese engineer who recently jumped to his death has called attention to the intense pressures that China’s middle class faces.
Ou Jianxin, 42, a married man with two children, was an engineer at ZTEICT Technology Co., an information and communications technology (ICT) service provider that is controlled by parent company ZTE Group. On Dec. 10, he jumped to his death from a building at his workplace in Nanshan District, Shenzhen City, according to a Dec. 15 report by China’s popular news portal Sina.
According to an online blog post published on Dec. 14, apparently written by his widow Ms. Ding, Ou decided to take his own life after he was forced to resign due to the company’s internal restructuring and infighting among staff. On Dec. 1, Ou’s supervisor, surnamed Wang, tried to talk him into resigning from the job voluntarily.
Several days later, the company’s human resources department offered Ou a severance package, which he refused. On Dec. 7, in a conversation with a departmental director surnamed Guo, Ou offered that he would resign if he could sell his company’s stock options at four yuan ($0.6) per share, which was the company’s stock price in 2016. Guo rejected Ou’s suggestion and said he could only sell at two yuan per share. When Ou refused his proposal, Guo threatened that Ou would face consequences.
According to the online post, Ou was a good husband, with a 9-year-old son and a 2-year-old daughter, who came from a village in China’s Hunan Province. He graduated from China’s Beihang University before getting his master’s degree at Nankai University, a public school in Tianjin City.
Ou worked for eight years at Huawei Technologies, a telecommunications equipment and services company, before he moved to ZTEICT in 2011, where he subsequently signed a labor contract to work from April 18, 2011 to Aug. 18, 2019. According to the blog, Ou was a diligent worker who often worked overtime, and sometimes even took home unfinished tasks.
With Ou gone, Ou’s widow said that the family has lost their only source of income, which allowed them to live in relative prosperity as part of the middle class. In Chinese society, the head of a household is also responsible to care for his parents and his in-laws, as an act of filial piety, which increased the financial burdens on Ou.
An Industry in Trouble
Ou’s money problems were most likely a sign of the financial problems suffered by his employers, China’s biggest smartphone makers, Huawei and ZTE.According to the Chinese regime’s mouthpiece Xinhua, ZTE, because of poor earnings, started laying off employees in 2012, during which over 10,000 people were let go, amounting to 15 percent of the company’s workforce. Many also had to take a salary cut. In January 2017, ZTE announced another wave of layoffs, targeting 3,000 employees, with 600 from the company’s smartphone departments.
In March 2017, ZTE was found guilty of evading U.S. embargoes by buying U.S. technology components and incorporating them into ZTE equipment, then selling the equipment to Iran and North Korea, according to Reuters. ZTE had to pay $900 million to settle the case.
Employees at Huawei, which currently trails behind Apple and Samsung in terms of worldwide smartphone market share, were also under pressure to leave the company, according to a March 6, 2017 report by Sina. The Sina article, citing Huawei’s own internal online discussion forum, said senior employers over the age of 34 were targets of the company’s layoff policy. Programmers over the age of 40 were also targeted, as Huawei planned on cutting costs by replacing them with younger workers who commanded a lower salary.
“We are all thinking about what we should do next, as we realize that Huawei doesn’t guarantee our job security for the long term,” said an anonymous 36-year-old engineer at Huawei, according to Sina.
Huawei doesn’t generate as much profits as its competitor Apple does, though it sold a record 139 million smartphones in 2016. According to a November 2016 report by Strategy Analytics, a market research company headquartered in Boston, for the third quarter of 2016, Apple captured 91 percent of the global market’s operating profit share, out of the $9 billion in total smartphone profits worldwide. Huawei obtained only 2.4 percent.
Increasing Property Costs
The cost of a home (most likely an apartment) is a financial strain faced generally by China’s middle class, although what role high property costs played in his suicide is unknown.The gap between personal income and housing prices has grown ever wider. According to Trading Economics, a macroeconomics statistics website headquartered in New York, wages in China increased from an average of 29,229 yuan (about $4,420) in 2008 to 67,569 yuan (about $10,219) in 2016, an increase of about 231 percent. Meanwhile, the housing market has consistently been on the rise. According to statistics by China’s National Bureau of Statistics, residential housing prices on average more than doubled between 2006 and 2015, from 3,119 yuan (about $473) per square meter to 6473 yuan (about $983). In Beijing and Shanghai, residential housing prices more than tripled in the same period, reaching over 20,000 yuan ($30,362) per square meter in 2015.
The high prices have led many Chinese to take out loans. According to the South China Morning Post, China’s total household debt has increased from 5.6 trillion yuan (about $846 billion) in August 2008 to 31.1 trillion yuan (about $4.7 trillion) in September 2016, an increase of 455 percent.
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