Summary:
* China's rising unemployment, officially forecast by Beijing to top 16 million this year, produced thousands of protests across China in 1998. One region in particular that appears to be emerging as an epicenter for unrest is Hunan province, hit not only by layoffs but also by flooding and official corruption. Hunan has seen a series of demonstrations in recent weeks, including a violent one on January 8 that reportedly involved some 5,000 farmers. Hunan is also home to political and labor activists, several of whom have been targeted in Beijing's recent crackdown on dissent. On January 17, a bomb exploded on a bus in the Hunan capital, Changsha, injuring 37. With social unrest now turning to violence, a cadre of activists, and only harder times in sight, Hunan could soon pose a serious challenge to stability in China as a whole. We expect Beijing knows this and will respond accordingly.
Analysis:
According to reports from China's Xinhua news agency and multiple sources outside China, a bomb exploded on a bus on the evening of January 17 in Changsha, capital of the central Chinese province of Hunan. The blast reportedly injured at least 37 of the 60 people on board, four of them seriously, although Chinese officials deny a report in the Hong Kong newspaper Ming Pao that 11 people were killed in the blast. There is no report of whether any passersby were injured by the explosion, which occurred at 7:40pm on Wuyi Avenue, a busy shopping street. According to an eyewitness cited by Xinhua, a man of about 30 put a lit cigarette in a large sack he had brought on the bus immediately before exiting the bus. Moments later the sack exploded. Said the witness, "The young man looked like a farmer who was in the city looking for temporary work. He was dressed in tatty clothing and was generally scruffy." Local police investigating the bombing reportedly did not confirm the witness's account, but according to the BBC, investigators did find traces of sulfur and nitrogen on the bus and confirm that the explosion was caused by a bomb. The Hong Kong based Information Centre of Human Rights and Democratic Movement in China calls Changsha "a disaster area for unemployment," and has reported sabotage attempts in the area last July and September.
On January 8, some 5,000 farmers protesting government corruption and excessive taxes clashed with police in Daolin township, about 25 miles from Changsha. One farmer was reportedly killed when hit by a tear gas canister, and some 100 more were injured in the more than five hour clash. According to a local Chinese radio station employee interviewed by the New York Times, the demonstrations were sparked when local police attempted on January 8 to disband and arrest the officers of the Society for Reducing Taxes and Saving the Nation, a group founded last year by local farmers. The radio station employee claimed that 10,000 farmers were present at the peak of the demonstration, while the Information Centre of Human Rights and Democratic Movement in China put the number at 3,000 and Chinese officials admit that 4,000 to 5,000 were involved. A second demonstration reportedly followed on January 9 but was quickly put down by 500 troops, while three other smaller protests related to the January 8 incident have reportedly occurred since then.
On January 18, several hundred laid off workers, known as "xiagang," from the state-owned Changde textiles factory, roughly 100 miles northwest of Changsha, blocked a highway bridge for over an hour to protest not receiving wages for over three months. According to the Information Centre of Human Rights and Democratic Movement in China, the demonstration caused a two mile long traffic jam. The Changde factory reportedly recently laid off some 3,000 of its 10,000 workers. Hundreds of laid off workers reportedly held similar demonstrations in Changsha on three occasions in November.
China has seen widespread social unrest and demonstrations in the past year, as the Asian economic collapse and China's efforts to force inefficiencies out of its economy have left millions unemployed. China's xaigang pose an increasing threat to China's stability as their demonstrations are growing larger, more frequent, and more violent. Demonstrations have been widespread and frequent, and bombings have occurred elsewhere in China as well. An explosion at a bus stop last week in Zhuhai, Guangdong province, injured four. Two people died and six were injured in an explosion late Sunday afternoon in an apartment on a busy street in Guangzhou. Traces of explosives were reportedly found at the scene.
While social unrest is present throughout China, Hunan is particularly volatile. The province is faced with extensive corruption and high unemployment, and has a tradition of anti- government activism. Chinese media has been filled with reports of Hunan officials caught up in Beijing's anti-corruption campaign, charged with and convicted of everything from massive embezzlement to vote fraud. Hunan has not only had to deal with layoffs from state-run factories, but is also coping with more than 300,000 refugees from flood ravaged areas.
Hunan is also home to a number of Chinese opposition activists, many of them veterans of the 1989 pro-democracy movement. The Changsha Workers Autonomous Federation was created in 1989, and was reportedly prominent in the pro-democracy struggle. Two committees of the China Democracy Party, recently the target of a government crackdown, were established last year in Changsha. Labor activist Zhang Shanguang, was sentenced last month in Changsha to 10 years in prison for "endangering state security." Zhang had served seven years in prison for ‘spreading counterrevolutionary propaganda" during the 1989 demonstrations. After his release, Zhang worked in, and was laid off from, a state-run factory. He proceeded to found the Association to Protect the Rights and Interests of Laid-Off Workers. He was arrested after giving an interview to Radio Free Asia regarding rural unrest in Hunan. Xu Wanping, another Changsha activist, in December was reportedly the first to be sentenced to prison for his role in attempting to establish the China Democracy Party. Xu was also active in the 1989 pro-democracy movement, for which he spent eight years in prison.
According to the official China Daily Business Weekly, China's unemployment situation is only going to get worse in 1999. On January 17, the journal cited Ministry of Labor and Social Security expert Mo Rong as forecasting some 30 million job seekers in 1999, with only 14 million new positions created in China's slowing economy. "This leaves almost 16 million people who will be unable to find a position through the labor market," said Mo.
Beijing is approaching a major crisis, with few options to escape or weather it. Like most of the rest of Asia, China is faced with the need to dramatically restructure its economy, knowing that such a move will foster massive social upheaval. Elsewhere in Asia, Japan has given social stability top priority, and so has been unable to pull out of its economic quagmire. Malaysia has sought to detach itself in part from the global economy, in order to avoid both social unrest and difficult economic decisions. China has chosen a third path, taking the necessary steps to reform its economy while dealing with a firm hand, or fist, with the ensuing social disruption. Opposition sources claim that Beijing has authorized security forces to fire on demonstrators without prior approval under certain conditions. But as Beijing pushes ahead with layoffs at state-run firms, the increasing number of unemployed pose an increasing threat to China's stability. This problem could be amplified if Chinese growth dips below five percent, a point toward which some analysts argue the Chinese economy is already creeping. China will either have to curtail economic restructuring, potentially sinking into the same stagnation seen in Japan, or it will have to take more draconian steps to control unrest. That Hunan province should lead the pack in social dislocation and disaffection is a historical irony of massive proportions: After all it was in Hunan that Mao Zedong first launched a peasant- worker revolt, and the same province may end up being ground zero for the next phase of repressive Chinese policies.
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