Report of the International
Independent Commission of Trade Unionists

Shenyang, Dalian, Changchung, April 25–30, 1996

For the time first since 1989, an independent international delegation of trade unionists was able to travel in China. We traveled there to meet Chinese workers and to observe for ourselves the current situation. We bring back findings which will be of use to the world worker's movement.

We do not regard the results of our work as our private property, nor do we believe our opinion alone should be considered. The commission has written this report in order that it be distributed as widely as possible in the workers' movement. We are ready, so far as we have the means, to reply to all requests to express our point of view and the information we have been able to gather.

The commission has also decided to append to this report all the relevant documentation in order that they be submitted to the annual session of the International Labor Organization (ILO) next June in Geneva.

>From April 25 to 30, 1996, an international union commission of inquiry traveled in the People's Republic of China. This commission included: Bayo OMOYIOLA, UNISON trade unionist (Great Britain); Antoine RUGGIERI, FGTB metallurgy trade unionist (Belgium); Herning FREY, TV trade unionist (Germany); Christian GOVERN, FO trade unionist, Social Security (France); Yacine HADJ-HAMOU, CGT trade unionist, Labor Inspection (France); Jean-Pierre BARROIS, university professor (France); Olivier DORIANE, journalist (France).

The commission's trip, meetings, and inquiries were organized independently. We wanted to observe first-hand the living and work conditions of the Chinese people, notably since the 1992 enactment of the law on Chinese unions and since the new labor code of 1994.

As part of our inquiry, the commission covered 1,200 kilometers. We crossed two different provinces: Liaoning and Jilin. We visited three large cities: Shenyang, Dalian, Changchung. The commission entered two special economic zones (SEZ).

The commission of inquiry was able to enter nine manufacturing facilities, either in informal visits or visits organized by the official tourism agency (CITS). These factories were either State property or owned by private capital (through joint-ventures between foreign and Chinese capital) in various industrial sectors: printing, electronics, machine tools fabrication for the textile industry, glass, and so on.

We were able to observe a three-in-one factory in the Dalian special economic zone.

The commission met with officials of various institutions at different levels: representatives of factory unions, factory directors, officials in charge of attracting foreign investors to the special economic zones (SEZ). In Changchung, the regional official from the All-China Federation of Trades Unions (ACFTU) in charge of international relations met with the delegation for two-and-a-half hours.

Despite all sorts of difficulties, the members of the commission have sought to and were able to have an exchange with the population—although somewhat limited—on trains, buses, and in workers' neighborhoods.

For our work, the commission gathered important documentation, notably: official translations of the labor code enacted on July 5, 1994 and implemented beginning on January 1, 1995; the law on unions in the People's Republic of China, enacted on April 3, 1992; the official periodical [ital]Beijing Review[ital] and copies of the independent journal [ital]China Labor Bulletin[ital]; as well as of independent publications recounting working conditions in China and reporting strikes that have developed there.

The commission's principal aim was to answer several questions:

• What is the situation of Chinese workers, especially since implementation of the new labor code?
• Is the All-China Federation of Trades Unions a union independent from the government and the State apparatus, thus ensuring defense of workers' demands?
• Are Chinese workers able to exercise the right to organize in the unions of their choice, a right recognized for workers of all countries in ILO Convention 87?

The answers to these questions determines the attitude toward the ACFTU leadership to be adopted by the world workers' movement.

Our observations are as follows.

I. Regarding the question of salaries

While Article 46 of the labor code stipulates equal pay for equal work, Article 48 states: The State shall implement a system of guaranteed minimum wages. Specific standards on minimum wages shall be determined by the people's governments of provinces, autonomous regions, or municipalities directly under the Central Government and reported to the State Council for the record. Wages paid to laborers by the employing unit shall not be lower than the local standards on minimum wages.

Reading this text, one can understand that a guaranteed minimum wage no longer exists; rather, there is now a system that allows for different minimum wages by province, regions, and according municipality.

We asked an official of an enterprise this specific question: Can workers occupying the same place in production in factories on opposite sides of the same street have different salaries? He indicated to our delegation that it was entirely possible, since in his factory they sought to tie salaries to productivity and each factory can fix the level of salaries.

We visited five factories in the same city on our first day in China and, in fact, observed strong disparities. The basic salary ranges from 300 to 600 yuans. In one factory, the salary scale went from 300 to 2,000 yuans, depending on the output of the wage-earner, but the majority of workers earned 300 yuans.

We have sought to measure what this meant for workers by discussing it with them:

Yes, I live with this salary, I eat, but to know if it is sufficient, you only have to look at my outfit.

It is possible to live, but if you think about buying a car, forget it!

During our encounter with the regional official of the ACFTU, and despite our repeated requests, he could provide no figures concerning the minimum salary, neither on a national, provincial, local, or branch level. Thus, all facts are in accord: there is an increasingly significant wage variance in process. One must note that this is taking place legally under the new labor code, which in Article 47 stipulates: An employer will determine independently the form of distribution of pledges and their level for its unit in accordance with the law and on the basis of characteristics and results of its production and its activity and its economic results.

Thus, salaries are defined enterprise by enterprise.

The independent journal [ital]China Labor Bulletin[ital] has published a study showing that salaries already vary by one to three times according to regions.

The new labor code can only accelerate this process, engendering considerable distortions, breaking the unity of the Chinese working class and, ultimately, national unity. The country is thus running a great risk.

II. Regarding the special economic zones

Special economic zones, where foreign capitalists make the laws, already represent genuine concessions wrung from the country. In these zones, the foreign capitalists benefit from considerable financial advantages, pay no taxes for several years, and engage in the worst forms of exploitation.

In one of the special economic zones we visited, officials indicated to us that the local Labor Bureau authorities, along with foreign investors, could define functional adjustments to meet the needs of companies with regard to salaries! They added: We guarantee to foreign investors that wage earners will require no more than 500 yuans for the women and 600 yuans for the men. In any event, they don't need more.

It is necessary to add that, unlike workers in the State enterprises, workers in the SEZs pay for their own accommodations, there is no social protection system, and, as a matter of fact, the retirement pension system is nonexistent. One worker used this expression: The law here is: if you break your leg, get away.

Let us note as well the current practice of supplementary hours, including on Saturday. We visited the special economic zone on Saturday: many enterprises were functioning, and at 7 P.M. we observed workers entering the factory doors.

One worker with whom we were able to exchange a few words told us: Despite a higher salary, I am not happy with this work, because I am far from home. As a matter of fact, he was 2, 000 kilometers away from his family. This is the case for tens of thousand of workers, who have been displaced from the inland regions of the country to coastal zones where the special economic zones flourish, there to be exploited there without limits.

According to the same official of the special economic zone, the work timetable, the number of worked hours are set by the local labor authorities and the rules are established in relation to the needs of the enterprise.

Moreover, we posed the question: How is the new labor code applied in the special economic zones? He replied: There is a particular sort of law for joint ventures. The local labor office explores with the foreign investors what is required in relation to their needs.

We observed with dismay something incredible: in these huge dormitory-cities, there are no children. There is a good reason for this: taken away, young girls and boys have but one task—to produce, produce, produce ... for the greatest profit of the foreign capitalists.

Our commission was able to obtain reviews intended for foreign investors. In one of the SEZs, there are 37 enterprises, of which statistics are complete for 34. Of these, 31 are controlled by foreign companies, employing 3, 847 workers. The declared investment is $122.8 million; the declared annual profit is $24.78 million. Thus, the capital investment is recouped in less than five years. Thanks to the conditions of shameless exploitation, the foreign capitalists earn approximately $6400 dollars per year for each worker employed in their factories.

When asked the ACFTU officials what this union did to counter these free zones, where none of the rights of Chinese workers are respected, he simply declared: It is the law; the government has decided.

III. Regarding retirement pensions

Article 75 of the labor code stipulates that The State shall encourage the employing unit to set up supplementary insurance for laborers according to its practical situation. The State shall advocate that laborers insure themselves through savings accounts.

It is essential to observe that this article is inspired directly from the recommendations and demands of the International Monetary Fund and the World Bank which, throughout the world, aim to destroy the retirement pension distribution systems so as to use the profit from these pension funds to feed international financial speculation.

In 1994, the United Nations issued a document devoted to the future of the Chinese retirement pension system in China, called UNFPA, which recommends in its Point 4: It is important to adopt a social security policy that is sufficiently flexible to accommodate different development levels. It will need to anticipate different types and levels of benefit.

Thus, according to the United Nations, Chinese workers should accept that the level of benefits of their retirement pension will depend upon different development levels.

The ACFTU regional official confirmed to us that retirement fund pensions, until now paid by the State—as if refunding a debt—to all workers who have worked 30 years, would henceforth be a guarantee fund fed by enterprises and wage-earners. As a matter of fact, Article 74 of the labor code stipulates: The agencies in charge of social insurance funds shall collect, expend, manage, and operate the funds in accordance with the stipulations of laws, and shall assume the responsibility to maintain and raise the value of these funds.

They will, therefore, be submitted to banking-type management aiming at modifying their value.

We posed the question: Who will manage these funds? The official replied: Banks have set up a system, which will be called professional savings.

We posed the question: Do you favor this system? The official replied that he supported pension funds and, in this system, enterprises that get richer would share that profit with wage-earners, and that wage- earners who want to save would profit as well.

Retirements that depend on the profit of enterprises are very dangerous. Article 71 of the labor code states: The level of social insurance shall be in proportion to the level of social and economic development and the social affordability. We are obliged to say that these are the very words of the United Nations document.

The clear aim, therefore, is to substitute for a system where retirement fund pensions are guaranteed by the State one where enterprises and/or banks will exercise total management of wage-earners' savings.

The international commission asserts that there is complete agreement between the Chinese State and the ACFTU concerning these efforts with relation to the retirement pensions of Chinese workers. What is occurring in China corresponds to the European situation and our specific countries. We must observe that the labor code paves the way for the looting of Chinese workers' savings by banks and pension funds, which we all know are dominated on a world scale by the law of American pension funds.

IV. Regarding employment

In Chapter II of the labor code, titled Promotion of employment, Article 10 states that The State shall create conditions for employment and increase opportunities for employment by means of the promotion of economic and social development. The State shall encourage enterprises, institutional organizations, and societies to initiate industries or expand businesses for the increase of employment within the scope of the stipulation of laws and administrative rules and regulations. The State shall support laborers in obtaining jobs by organizing themselves on a voluntary basis or by engaging in individual businesses.

In a country where the rule was a job for life, this formulation is quite vague. Therefore, we raised the question of unemployment. The ACFTU regional official answered us as a representative of the government would have done: There is no unemployment in China, only workers waiting for a job.

Nonetheless, at the ACFTU XIIth Congress in October 1993—before 1,600 delegates from throughout China—the federation's former president, Ni Zhi Fu, admitted that at the time 13 million workers in the cities are officially in complete or partial unemployment.

Further, State authorities in their 1996 May Day official speeches drew attention to the lot of 12 million unemployed people in the cities.

Others figures are also known. The management board of the State coal mines has announced officially that 400,000 mining jobs disappeared between 1993 and 1995.

When we questioned this ACFTU regional official, quoting these figures, he indicated that workers who would lose their jobs would be converted into businessmen or service employees.

During this same conversation, we were surprised to hear this official present as a future scenario the loss of one in three wage-earners in enterprises. This the same estimate of the international financial institutions, which frequently state that of the 140 million Chinese workers in State enterprises, 40 to 60 millions are excess.

Obviously, instead of a system that guarantees a job for life for Chinese workers, the government has substituted a system where the utmost instability will be the lot of tens of millions As the SEZ official declared: The rule will be contracts of a determined duration -- one to five renewable years -- but also total freedom for the employer to lay off, whenever he wishes to, in relation to the needs of the enterprise.

One finds again this notion of contract of a determined duration in the labor code itself. Article 20 stipulates: The term of a labor contract shall be divided into fixed term, flexible term, or taking the completion of a specific amount of work as a term.

V. Regarding safety on the job

The commission also began to collect information on job safety. Statistics on accidents at work in industrial enterprises in 1994, published by the Ministry of Labor, indicate: 40,000 fires, causing 2,748 deaths and 4,277 injuries among wage-earners; 264 serious fires, causing 585 additional deaths and 477 additional injuries; 7,918 mining accidents wi[...]