The Telegraph (UK)
Sunday May 7, 2000
China's recession adds pressure for workers' rights
By Damien Mcelroy in Beijing
CHINA returns to work today after an unprecedented week-long national holiday ordered by a Communist leadership alarmed at escalating violent protests and strikes among a discontented workforce.
The decision to extend the "Labour Day" holiday to a week for 300 million urban workers seems to have been taken shortly before May 1st and had a whiff of panic about it. Analysts see it as a barely disguised attempt to defuse an increasingly explosive atmosphere among a workforce facing Western-style job insecurities combined with falling wages.
Fed up with not being paid by their bankrupt employers and fearful of being laid off, many workers are taking to the streets to challenge the leadership for a better deal. Above all, Beijing is terrified of a workers' rights movement emerging from the spread of isolated protests, and of China spawning the kind of Polish-style free trade union that helped topple communism in eastern Europe in the Eighties.
Unrest has been particularly prevalent in the provinces north-east of Beijing which have been hardest hit by the decline of old industries amid economic restructuring. Once in the vanguard of Mao Tse-dung dash for development, the region is now a basket case of outdated factories and exhausted mines.
In cities such as Shenyang, tens of thousands of laid-off factory workers wander the streets for want of something to do. They are easily prompted into reciting a litany of grievances. A recent flare-up involving redundant miners in Yangjiazhanzi, 250 miles north-east of Beijing, was typical of the type of incident now taking place regularly in China.
Cars were smashed, shops looted and fuel stores set alight as the town was embroiled in a three-day battle between 20,000 miners and soldiers following the announcement that the largest local employer, a molybdenum mine, was to close.
Workers were further enraged at the management's decision to offer only a few hundred pounds in severance pay for a lifetime's work. One man and his wife, who had worked a combined 70 years at the mine, were given £350 to compensate them for lost earnings, pension and health care.
At one stage, demonstrators raided the mine's explosives store to hold the troops at bay. The growing mood of unrest has come about despite the tight lid kept on labour disputes by the Communist Party.
Independent trade unions are banned, and any sign of a co-ordination of protests in different areas prompts a harsh response. Labour activists are frequently detained in laogai labour camps to undergo "re-education". However, worker discontent has been escalating across China, according to new figures.
The number of officially recorded strikes soared to more than 120,000 in 1999 - a 14-fold increase in five years. The new statistics are all the more remarkable as they will have been "massaged" by officials in an attempt to gloss over rising tensions.
They illustrate the frustrations among a workforce that was nurtured on promises of jobs for life but is now confronted with the collapse of uneconomic and outdated heavy industry. Many employers are failing to pay salaries and entitlements to their workers on a regular basis - causing great hardship.
Those laid off are often forced to sell household items from makeshift street stalls to earn the money they need to live. One old soldier, who was demobbed from the People's Liberation Army in the late Fifties to work in a factory, said hardship was rising, even for those who were still being paid.
He said: "Pensions and salaries aren't going up, but rents and electricity prices are," he said. "If you paid for enough electricity to heat your home, you couldn't eat. So people have to steal the electricity."
There is an almost uniform bitterness among ordinary Chinese against officials and company managers who have been able to enrich themselves from their positions. Yet despite rising resentment, corruption is still on the increase.
One Hong Kong academic estimates that the party-appointed management of state-run factories skim more than £8 billion into their own bank accounts - usually overseas - every year. In a move eerily reminiscent of the dying days of the Soviet bloc a decade ago, the Chinese Communist Party is now trying to distract people's attention from the inequalities that are feeding their deep-seated grievances.
Last week the propaganda machine was busy issuing reports of crowded airports and bustling streets in an attempt to obscure the real reason for the extended break. Newspapers reported a stampede to the shops, claiming growing consumer confidence that the economy was improving.
But a quick visit to one of Beijing's biggest department stores revealed that, while people were out in force, few were spending with the abandon that the government had hoped for. Official figures put the annual economic growth rate at eight per cent. But the steady decline of state-owned companies, which still employ more than half the urban workforce, has pitched the country into a malaise that will not be lifted by last week's extra holiday.
Li Qiang, an electrical appliance salesman, said few people had taken up the official invitation to spend freely during the holiday. He said: "People are still afraid to spend. The whole economy has been changing dramatically since 1994. There are so many laid off from state-owned companies that, until social welfare improves, people won't spend money needlessly."