'Couple' manufacturing groups indispensable
In Zhili, a children's clothing workshop with five to six shop fronts is considered a big factory, but those with only two shop fronts are also in large supply.
According to Tan, a big factory must usually finish making a batch of goods involving thousands of children's garments in three to five days. He further revealed that an experienced worker could finish 20 garments a day, while a green hand might make less than 10. At such speeds, a small workshop would never finish orders in time, so it must seek help from "couple" manufacturers.
A couple manufacturing group is formed by a husband and wife, but sometimes will include other family members as well. The couples charge their wages by piece, so the more pieces of children's clothing they make, the more money they earn.
According to Tan, for complicated garments couples charge between 10 and 20 yuan ($1.5 to $3), while the simplest kid's wear may only earn them 2 to 3 yuan ($0.3 to 0.5) per piece, bringing in a monthly income of between 3,000 to 4,000 yuan ($464 to $618).
When the rioting stirred the town, some factory bosses complained of a shortage of new goods because couple manufacturing groups had gone on strike.
Increasing taxes
In the beginning, couple manufacturing groups did not have to register with the Industrial and Commerce Bureau. However, as their numbers increased, in 2009 they were required to pay 100 yuan ($15.5) for the use of each machine to make children's wear, dubbed the "sewing machine tax."
The tax targeted small independent workshops that were often unlicensed and manned mostly by migrant laborers who earned money per piece of clothing produced.
In 2010, the tax was changed to a "head tax," and each member of the couple groups were charged 300 yuan ($46.4) a year. If the group consisted of less than five members, it would still be charged 1,500 ($232) yuan.
Last month, a sudden notice said that this tax would be raised to 626 yuan ($96.8) for each member of the groups, and rumors spread that it would be increased to 1,000 yuan ($154.6) next year.
Instead of charging the tax in a gentle way, Tan said, the collection came in an aggressive and rude manner, which led to the fight.
On Oct. 26, a children's clothing dealer from Zhili led an attack on tax collectors made up of other vendors and relatives, and gathered more than 100 people to block State Highway 318. The mob then moved to Fumin Road, where their rioting attracted more than 600 onlookers. As they tried to smash a passing Audi sedan, the frightened driver accelerated and ran into 10 people, a tragedy that led to even further violence.
Impetus to accelerate tax reforms
Though the clashes between garment trade workers and tax authorities have now ended and the situation is under control, the incident revealed an impetus to accelerate tax reforms, which is part of the structural tax reduction.
An unnamed source revealed that the tax collectors in Zhili were in fact not from the tax department, but from local residential district committees. They were all fired for causing the dispute.
On Nov. 9, 2011, the Ministry of Finance said that revenue from personal income tax fell 3.1% from a year earlier to 35.24 billion yuan ($5.45 billion) last month after amended rules on personal income tax took effect Sept. 1, which was seen as an important measure to reduce the burden on citizens.
