Mounting Labour unrest alarms China's leaders

By Rod Mickleburgh, The Globe and Mail, 18 July 1997

Disgruntled workers angry over shutdown of state factories

An escalation in public protests against deteriorating working and living conditions has begun to alarm China's leaders.

The latest serious outbreak occurred this month in the southwestern city of Mianyang, where thousands of angry workers confronted police in demonstrations over the closing of their factories.

A police crackdown injured scores of workers and several dozen were arrested, according to reports by a local dissident, Li Bifeng.

One official acknowledged that several big state-owned enterprises have declared bankruptcy and the workers and their families launched the protests so that they can ensure a basic standard of living.

The Mianyang melees followed a provocative protest last month by more than 100 Beijing residents outside the city's high-walled Zhongnanhai compound, where many of China's top leaders live. The residents were protesting against the demolition of their homes and the failure to provide them with promised new accommodation.

A more dramatic disturbance took place several months earlier in the city of Nanchong, not too far from Mianyang in the province of Sichuan. There, an estimated 20,000 workers besieged the city hall for 30 hours, demanding back pay from their failing factories.

On that occasion, authorities gave in. Loans were arranged, allowing workers to be paid for the first time in six months.

Disgruntled workers have been blamed for a bomb explosion on a Beijing bus the same month.

These are more than isolated incidents, a Western diplomat said yesterday. I believe Chinese authorities are very worried about them, and they are going to be more worried, because I think it's going to get worse.

You have to assume there are already a lot more of these happenings than we know about.

While issues such as forced resettlement, environmental degradation and poor housing have prompted many protests, the disturbances most unsettling to Chinese leaders are undoubtedly those involving workers, like those in Sichuan.

Indeed, it could be said that the Chinese Communist Party's greatest fear these days is the very working class it still claims is running the country.

According to a published report, public security chief Tao Siju warned recently that strikes, collective protests, petitions and demonstrations were gravely disrupting public order, adding that all disturbances, no matter the cause, had to be handled firmly . . . [with] no compromise.

Since coming to power in 1949, the Chinese Communist Party has crushed all attempts to establish independent, non-communist trade unions, with harsh sentences handed out to individual labour dissidents.

A front-page article in the state-owned newspaper China Daily yesterday provided a good example of the Chinese government's hostile attitude toward worker power.

The article criticized radical unionists in Hong Kong for sponsoring legislation that would give unions there the right to bargain collectively for their wages and working conditions.

The government and many legislators worry that this may create labour confrontations and scare away investors, the article said. The politicization of trade unions is also possible.

The apparent rising tide of worker discontent in China comes at a time of growing economic dislocation.

The iron rice bowl that once guaranteed Chinese workers a lifetime of employment has long since cracked, as the country embraces economic reforms.

China's official urban-unemployment rate hovers around 3 per cent, but many economists believe the real figure is at least twice as high. That would mean more than 10 million workers are currently unemployed, with only meagre social benefits on which to rely. Many more workers are hanging on to jobs in unproductive factories kept afloat only by large bank loans and a whittling of their pay.

The prime culprit is China's vast stable of creaking state-owned enterprises, which continue to employ more than 100 million workers. More than half lose money, many are idle and they are a steadily increasing drain on the national treasury.

Yet Chinese leaders have until now been reluctant to accelerate the pace of bankruptcies because of fears of mass social unrest from sudden, widespread unemployment.

Lately, however, there have been signs of renewed determination to confront the problem, regardless of the social cost.

The government just can't keep pouring money in. It's a black hole, the Western diplomat said. One of their economists told me the other day their three top issues these days are the reform of state-owned enterprises, state-owned enterprise reform and reforming state-owned enterprises.

The diplomat said there are also indications the overall economy is slowing down. What you can conclude from all of this is that Chinese workers are not going to be happy, and the government is very concerned about maintaining stability.

In Mianyang, the trouble appeared to have been caused by the sudden bankruptcy of three state-run silk and textile factories.

Workers, who accused factory managers of embezzling their unemployment-relief money, took to the streets, according to Mr. Li's report.

The police crackdown a week ago injured more than 100 workers, while more than 80 were arrested, he said.

At present, Mianyang is still under strict police control and many of the detained workers remain in custody.

A city official, denying much of Mr. Li's report, told Reuters News Agency that only one or two people were arrested for pasting up big-character posters and stirring up the crowd.

The rest were dispersed and no workers were injured.