China Reports Big Surge in Labor Unrest During 1999; Disputes over unpaid pensions, wages, fraud

John Pomfret, Washington Post, The San Francisco Chronicle, Monday 24 April 2000

Beijing—The number of labor disputes in China has skyrocketed—to more than 120,000 in 1999—as workers in unprecedented numbers get laid off, are paid late or not at all and feel cheated by corrupt officials who sell state property for a pittance to friends, relatives and colleagues.

Official Labor Ministry statistics passed to a Western diplomat and a recent article in the journal Legal Research showed 14 times more labor disputes—from simple contractual disagreements to work stoppages and strikes—last year than in 1992. The article and labor officials' willingness to speak about the issue marked a departure for the Communist Party, which has struggled to maintain stability in Chinese cities in the wrenching transformation from a planned economy to something akin to a market economy.

The strains were highlighted in late February when tens of thousands of workers erupted in a violent protest at China's biggest nonferrous metal mine near the Bohai Sea in the northeast. Workers there burned cars, broke windows and kept police and the army at bay for several days as they protested what they said was an unfair and corrupt handling of the mine's bankruptcy.

Chinese labor conditions have been the subject of increased international scrutiny in advance of a vote in the U.S. Congress on granting China permanent normal trade relations, a major stepping stone to its accession to the World Trade Organization. U.S. labor unions, led by the AFL-CIO, have argued that China's entry into the WTO would result in a deterioration of its already-limited labor rights. Chinese law does not provide for the right to strike and bans independent unions.

The statistics show a jump from 8,150 labor disputes in 1992 to more than 120,000 last year, answering a question posed often by China scholars: Is the urban labor situation getting tenser, or is it simply that China's increasing openness allows for more information about a fixed number of disputes?

This is significant. It shows things are getting more difficult, said Anita Chan, an expert on China's labor relations at Australian National University in Canberra.

At the same time, the statistics also helped explain why the increased unrest has yet to translate into a movement challenging the Communist Party's monopoly on power or seeking to establish independent labor unions. While collective labor disputes, in which workers seek to bargain in a unit, are increasing rapidly, they still make up a minority of the overall disputes—7 percent in 1998, the last year available. And no evidence exists of workers uniting to strike at several businesses at the same time.

Besides unrest over wages, labor disputes typically involve unpaid pensions to laid-off employees, poor working conditions and the sell-off of state enterprises that workers believe involved fraud by management.

Andrew Walder, an expert on Chinese urban workers at Stanford University, said a key reason the unrest hasn't translated into a broader movement is that strikes remain scattered and workers are unwilling or unable to unite to pursue broader goals.

There have been periodic press reports for most of the last 10 to 15 years or so that labor disputes are on the rise in China, he said. It makes a great deal of sense that they would be: Wage issues came to the forefront in the 1980s and increasing job insecurity and layoffs (became) a big issue in the 1990s. Should we get worked up about such reports? Probably not. Scattered strikes are politically meaningless. If and when a national or regional trade union is organized and survives openly for a while—which is very unlikely—we should then begin to read political significance into all this.

Some researchers suggested that the 1999 figure for labor disputes, which represented a 29 percent increase over 1998, was limited by massive government subsidies. Last year during the 50th anniversary of China's Communist revolution, party officials were told to stress stability at all costs.

Labor relations in 2000 will deteriorate as special subsidies fade out, the economic and labor `reforms' intensify and more and more workers are laid off, said Tak Chuen, an expert on China's labor issues at Hong Kong Baptist University.

Chuen said Chinese workers face a difficult situation because accession to the WTO will do nothing to improve their livelihood, at least in the short run, but failure to do so will not help either.

The Legal Research article, written by retired scholar Shi Tanjing and published in November, called on the government to end its ban on strikes. The right to strike was removed from China's constitution in 1982.

Shi said labor disputes in China are increasing because the rights of the workers have been infringed. But the article notes that workers have been winning the disputes, in arbitration courts and in judicial courts, at rates of 3 to 1, 4 to 1 and even 18 to 1 in some regions.

This underscores a main strategy China's government uses to deal with labor unrest: giving in to most workers' demands. For instance, Labor Ministry officials said this past week that China plans to double spending on worker issues, such as back pay, unpaid pensions and medical insurance, a Western source said.

Eleven million Chinese will be unemployed by the end of this year, the Labor Ministry has estimated.

Shi noted that the hot spots for labor unrest are concentrated in state-owned enterprises in China's rust belt in the northeast and in coal mines, textile mills and forestry departments. Some 40,000 businesses ran out of cash in 1997, he said.

In the more economically developed southern provinces of Guangdong and Fujian, he said, most of the disputes centered on private or semiprivate firms where the managers in their quest for profit egregiously exploit workers. Indeed, the sweatshops of Guangdong are famed for exploitation and danger. Maiming is commonplace because of bad machinery and poor training, and wages are very low.

Shi said a trend to watch is growth in collective labor disputes, which occurred 6,567 times in 1998—nine times more than in 1993—and involved 251,268 workers. y Shi's report also marked the first public acknowledgment of labor disputes in Beijing, the capital. He said the number of labor disputes here almost doubled in the first half of 1999 compared with the same period in 1998, while the number of collective disputes more than quadrupled.

Shi did not include statistics on strikes, partially, he wrote, because official newspapers do not publish them and Chinese officials ordinarily suppress that data for fear of hurting their political careers.