The Globe and Mail Friday, July 18, 1997
MOUNTING LABOUR UNREST ALARMS CHINA'S LEADERS
Disgruntled workers angry over shutdown of state factories
By Rod Mickleburgh
China Bureau
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 po-
lice 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 liv-
ing."
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 Si-
chuan. 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 go-
ing to get worse.
"You have to assume there are already a lot more of these happen-
ings 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 dem-
onstrations 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 dissi-
dents.
A front-page article in the state-owned newspaper China Daily yes-
terday provided a good example of the Chinese government's hostile
attitude toward worker power.
The article criticized "radical unionists" in Hong Kong for sponsor-
ing legislation that would give unions there the right to bargain col-
lectively for their wages and working conditions.
"The government and many legislators worry that this may create la-
bour 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 life-
time 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 unem-
ployed, 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 en-
terprises, which continue to employ more than 100 million workers.
More than half lose money, many are idle and they are a steadily in-
creasing 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 Chi-
nese 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 sud-
den bankruptcy of three state-run silk and textile factories.
Workers, who accused factory managers of embezzling their unem-
ployment-relief money, took to the streets, according to Mr. Li's re-
port.
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."
