China: Inequality greater than is the West, 210,000 Labour disputes reported unrest rising

Beijing Dangdai Sichao, No.2, 20 April 1997, pp. 15–23

...Then, what are the reasons that make more and more workers disbelieve scientific Communism, choose the ideal on personal life and even believe in religion? (Note: According to a nationwide survey of workers, 8-9 percent of the workers were religious among the total number of workers surveyed. However, 20 percent of the workers in Shanghai and 26.5 percent of the workers surveyed are religious.) I believe that this situation can be attributed to two major factors—the international factor and the domestic factor.

Of the two, the domestic factor is the main one. It is specifically manifested as follows:

First, the weakening socialist awareness with Marxism as the guidance has caused confusion and misled the public opinion to a certain extent during a certain period. It prevents China's theoreticians from studying and correctly explaining the several deep-rooted problems in the course of developing socialist modernization, and hinders enterprises in following the correct path in reform. It not only abets corruption and degeneration, but also deeply affects people in choosing their values. Since the introduction of the reform and opening-up policy, two of our principal party leaders had, on separate occasions, committed mistakes on the issue of opposing bourgeois liberalization. Deng Lijun's songs became a fad of the time, and the book Abandoned Capital blatantly sought publicity. The China Human Rights Group and the Thawing Society appeared in the late 1970s, and the Beijing disturbance broke out in late spring and early summer in 1989. Public funds were used in feasting and other kinds of entertainment, and some people even used public funds to visit prostitutes and engage in gambling. Persons such as Wang Baosen overtly babbled about ideals and faith, while covertly leading a fast life. All these indicate the need to strengthen ideological education among ourselves.

Second, A considerable number of state-owned and collective enterprises are not doing well. Some of them suffer losses, while others are forced to suspend or curtail production. Some workers do not get paid on time or simply receive no pay. As a result, some workers' families live in dire poverty. Their situation shows a striking contrast to the sudden wealth attained by some dubious characters and the wanton extravagance of some influential officials and upstarts. Workers' weak economic status affects their political and cultural status, and makes them feel passive in their mind.

The number of workers laid off by enterprises continues to increase, and the rate of urban unemployment is on the rise. This not only pushes the workers' families in deep water, but also undermines social stability. In accordance with the statistics compiled by the All-China Federation of Trade Unions, the number of workers who were laid off or asked to accept reduced wages or retirement reached 6,924,110, almost 7 million. In accordance with the statistics compiled by the Ministry of Labor, among the 108 million workers in the country, there are approximately 30 million redundant workers in state-owned enterprises throughout China (of whom about 15 million lie idle and another 15 million are covertly idle) accounting for 25-30 percent of the total number of workers. The urban unemployment rate was 2.3 percent in 1992, 2.5 percent in 1993, and 2.8 percent in 1994, and it was estimated to be 3 percent in 1995 with a continuous upward trend. This rate is estimated to reach 4.8 percent by the year 2000. Some people believe that if the 20 million covert idle workers and the 6 million on-the-job unemployed workers in enterprises forced to completely or partially suspend production are included, China's urban unemployment rate will be 10 percent, not 2.8 percent. In accordance with statistics compiled by the Shanghai Federation of Trade Unions, there were 84,500 laid-off workers waiting for jobs in Shanghai in 1992. The number of unemployed in 1993 was 68,900 more than that in 1992, and that in 1994 was 44,700 more than that in 1993. The number of laid-off workers reached 250,000 in 1995. On the one hand, some of the laid-off workers feel antagonistic to the society and the reform program because they have lost their jobs and income. At times, they even feel hopeless in life.

On the other hand, they decline to accept job offers in four areas. They refuse to accept job offers that pay poorly, call for heavy work, demand strict discipline, or are far away from home. According to an estimate made by a leading comrade of the No. 1 Light Industrial Corporation in Beijing, at least 70 percent of the 7,000 laid-off workers are covertly working while receiving partial wages and enjoying some fringe benefits from the enterprises as laid- off workers.

The reform and opening-up program has helped raise a large number of workers' living standards in varying degrees. However, most of the workers do not regard themselves as the largest beneficiaries of the reform program. During the surveys conducted in March and June 1996, workers believed that proprietors of the nonpublic economic sector and people who hold power in their hands were the beneficiaries of the reform program. In terms of ranking, private proprietors ranked first, managers and administrators form the next group followed by government cadres, technicians, and peasants. Production workers were at the bottom of the list. Furthermore, most of the workers believe that the gap between the rich and the poor in the society is widening. On the issue of the narrowing gap between the rich and the poor in the society, 18.41 percent of the workers in the March 1996 survey said yes among a few people while 66.7 percent of them said no. The result of a research project sponsored by China People's University proved this kind of trend. By using the Gini Coefficient to judge the disparities between the rural and urban incomes in China, this coefficient was 0.445 in 1994. It showed that income differentials were excessively large. The Gini coefficient in China has already exceeded that in Western developed countries.

According to an analysis conducted by the State Statistics Bureau, China's urban families in 1995 could be divided into the following five categories:

1. Poor families with an average annual income under 5,000 yuan, making up 3.8 percent of the total number of families, 1 percent less over 1994.

2. Families having adequate food and clothing with an average annual income between 5,000 and 10,000 yuan, making up 36.1 percent of the total number of families.

3. Families leading a relatively comfortable life with an average annual income between 10,000 and 30,000 yuan, making up 50.1 percent of the total number of families.

4. Well-to-do families with an average annual income between 30,000 and 100,000 yuan, making up 8 percent of the total number of families. There are approximately 6.8 million families of this category in China's urban areas.

5. Wealthy families with an average annual income of over 100,000 yuan, making up 1 percent of the total number of families. There are approximately 850,000 families of this category in China's urban areas.

In 20 percent of the urban families, the income differentials between families of the highest incomes and those of the lowest incomes grew from 1.8 times in 1978 to 3 times in 1994. From the perspective of the entire society, the difference between the rich and the poor is as high as 13 times, if we compare the 20 percent of the urban families with higher incomes with 20 percent of the rural families with lower incomes.

Right now, another trend which merits our attention is the fact that there are more labor disputes since 1992. Some of them are complicated and volatile. According to data provided by the Ministry of Labor, the number of labor disputes of all types that arose in 1993 was 54 percent more than that in 1992. Labor disputes that flared up in 1995 grew 73 percent over 1994. The number of such disputes exceeded 210,000 in 1995. Labor disputes will continue to increase in 1996.