What is fascinating to me about the case of China is both the extent of conflicts betweeen workers and managers/ministries over the terms of SOE reorganization and the almost complete lack of any active reaction on the part of the left faction of the CCP. There is missing any strategy whatsoever to show support for workers in these conflicts. What makes this so remarkable is how much space exists in China for making this possible through legal means. Intellectuals/cadres in China possess enough knowledge of labor and enterprise conversion laws that make it feasible for them to set up the equivalent of legal aid organizations, institutes studying systematically the different problems workers face in specific segments of SOE industries, strategies for defending SOE workers' legal rights (as they exist on the books) and the like.
One of the clearest reasons why cadres/intellectuals don't do this is their fear of engaging in such activity as it can be easily labelled illegal or subversive. How does one defend SOEs' rights in the Party if one is kicked out of the Party? This is not a new dillemma, but the level of conflict in China is only going to intensify according to most who observe the situation, especially with the onset of WTO 'reforms'. Just how long horse trading with fewer and fewer bargaining chips can remain the only strategy the left in China pursues remains to be seen.
August 31, 2000
Factory Closings in China Arouse Workers' Fury
By ELISABETH ROSENTHAL
o Maverick Chinese Province Fears Opening of Trade (June 12, 2000)
o Caught Between Eras: China's Factory Workers (Nov. 18, 1999)
o Join a Discussion on Chinese Politics
T IANJIN, China, Aug. 29 -- The brick-walled Meite Packaging
factory compound is nearly deserted now, its managers and machines
hastily transferred in the last couple of days to a special
development zone 30 miles outside this industrial city.
Although the closing had long been planned, the sudden departure
was prompted by an unusual event here, Last week, desperate Chinese
workers expecting layoffs seized six foreign managers from Meite's
American parent company and held them hostage in the factory for 40
In the space of a decade, the Meite plant was transformed from a
state-owned company making pipes to a beverage packaging firm
jointly owned by the Chinese and an American corporation -- and,
just recently, to a factory wholly owned by the foreign partner,
the Ball Corporation of Broomfield, Colo.
And so this sweltering summer, middle-aged workers who not so many
years ago were promised cradle-to-grave security by the state
factory found their livelihoods suddenly threatened by a capitalist
corporate restructuring and felt they had no where to turn.
"Every day since the beginning of August they were there at the
gate, protesting and trying to block deliveries and people from
going in," said Liu Qiuling, a retiree who lives next to the
factory and knows many who worked there. "But the managers didn't
meet with them. I think that's why the workers were so mad."
Taking foreign businessmen hostage is rare in China, despite the
thousands of often fractious business partnerships between Chinese
and foreign companies. But the workers' frustrations that touched
off the incident are commonplace, leading to hundreds if not
thousands of protests in recent years.
Under government orders to become economically self-sufficient,
many formerly state-owned factories have tried to transform
themselves, often with the help of foreign partners.
The sink-or-swim strategy promoted by Prime Minister Zhu Rongji,
who oversees economic policy, has no doubt rescued thousands of
companies from bankruptcy and prepared them to compete in the
global market. It has also often enriched many former state factory
officials, who are often offered lucrative positions in the
But it has been painful and confusing for China's tens of millions
of workers, echoing similar privatization efforts in the former
Soviet bloc. The workers are unfamiliar with the intricacies of
buyouts and severance packages, generally lack effective labor
unions and have little outlet for their complaints against new,
often absentee, bosses.
"Workers' rights are not protected much when this happens," said
Anita Chan, a labor expert at Australian National University.
"These are people who worked for the state and thought they would
work and then retire and enjoy certain benefits: health care,
pensions, things like that.
"But then one day it's just finished. And they are 40 and have many
decades of life ahead of them. What will they live on?"
She said the workers at Meite, who were offered a severance
package, did better than many others who get nothing at all.
The conversion of state factories has often left the workers at
odds with new employers, both foreign and Chinese. And protests,
though rarely reported in the Chinese media, are a frequent result.
Earlier this month, also in Tianjin, disputes erupted between
workers at a state-owned liquor company and its German partner,
which wanted to sell factory parts for scrap metal. The workers
blocked a truck, insisting that the profits from the metal were
Late last year, workers at the formerly state-owned Red Lion Paint
Factory in Beijing ended up in a near-fatal standoff with the
management after a new private owner, a Chinese company from
Shandong Province, wanted to close the plant and sell the land.
When a delegation of workers failed to persuade the management to
keep the factory going, some of the workers attempted suicide in
the office of the factory's Communist Party secretary, who had
sided with the new owners. One women swallowed a bottle of
pesticide, and two men slashed their wrists.
Workers are often particularly incensed when factory bosses reap
profits from restructuring while the workers suffer.
Opportunities for corruption abound when state property is released
into the private market, because it is often difficult to place a
value on such companies. Some former factory bosses have managed to
buy profitable ventures at bargain basement rates.
"What laid-off workers particularly hate to see is their factory
taken over by the factory management and converted to private
assets," said Dai Jianzhong, a specialist in labor issues at the
Beijing Academy of Social Sciences. "They see factory assets being
used to buy cars and houses."
Often the desperate acts reflect the dire situation of middle-aged
workers who find themselves abruptly without jobs in a country
still poorly prepared to deal with unemployment.
Until a decade ago, nearly all urban Chinese workers received
housing, health care and pensions through state jobs. Although that
is changing, China has yet to develop an effective social security
net for the unemployed or elderly. Its embryonic welfare system
offers no health care or jobless benefits for people like those
laid off from Meite.
And the ranks of such workers are likely to grow, because Meite was
the victim of what in the West would count as business as usual.
Through a series of joint-venture partnerships in the 1990's,
Meite's parent company, the Ball Corporation, has ended up with
four packaging plants in Tianjin, mostly making soda and beer
The plan now is to consolidate the four into one -- in the special
economic development zone, which offers tax advantages, said Scott
McCarty, a Ball spokesman.
Ball has 17 wholly owned or joint-venture companies in China and
has been doing business in the country for more than 15 years.
The folding of four factories into one meant layoffs, and the
company invited some workers at Meite, mostly people in their 20's,
to move with it, a worker who answered the phone at the plant said.
The decision is typical for downsizing Chinese companies, experts
say, since the younger workers tend to be better educated.
The rest of the workers were offered a one-time severance payment
of about $1,200, which many considered inadequate, prompting the
On Wednesday last week, when executives from Ball's Hong Kong
office went to post a closing notice in the factory, workers
detained them in an office and would not let them leave, Mr.
McCarty said. He said that the six men had not been physically
harmed, but that the workers were verbally aggressive at times.
"Just like in the U.S., people were upset that their plant would
close -- that's understandable," said Mr. McCarty. "From our point
of view the incident is over now and it's fine." Still, he said the
company would probably change some procedures, including those for
The police did not enter the factory during the ordeal, calling it
an "internal" matter. They would not say today if there had been
The foreigners -- an American, two Malaysians and three Hong Kong
residents -- were released after 40 hours early Friday. Mr. McCarty
said he was unsure if concessions had been made, although a worker
at the factory said the severance payment had been raised a bit.
But in a city with hundreds of thousands of laid-off and unemployed
workers, that may provide little comfort. Of 30 jobs listed outside
the district employment center near the factory, only one was
listed as open to applicants over 35.
"People count me as lucky," said Mr. Liu, sitting on his old
bicycle cart. "I retired a long time ago, so I have a pension. But
what will these workers do if they get sick? How will they pay for
Farmers in Violent Protests
BEIJING, Aug. 30 -- Thousands of farmers protesting high local
taxes smashed government offices and looted homes of the rich in
the southern province of Jiangxi earlier this month, local
officials told Reuters.
Similar disturbances have been reported from many rural areas as
farmers with stagnant incomes face growing tax burdens from local
governments, but this is one of the larger known cases, enveloping
numerous towns and villages over 10 days until the police were
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