[Translated from the supplement “Unruhen in China”, wildcat #80, Winter 2007/08]
During the restructuring of the 1980s and 1990s the urban proletariat of the state-owned factories – the gongren – was the focus of the restructuring and experienced massive layoffs after 1997. Before the reforms the differences between the gongren and the peasants and migrant workers were all too obvious. A part of the gongren had a number of benefits, like a guaranteed work place and better health care, and were considered a strong pillar of the socialist regime. But after the reforms, the urban proletariat became the losers: The restructuring of the state combines led to de-qualification, wage cuts, precarity and the layoffs of millions of workers. They staged a number of militant struggles, especially since 1997, considered by the party leaders and the government as the biggest threat to social stability. They forced the regime to slow down the restructuring, but they were not able to stop it.
A big number of the new urban unemployed were forty years old and older, unable to step up the ladder in the new economic structures and simply ignored by the new/old class of Chinese and foreign world-market capitalist looking for young labor. 60 percent of factory workers laid-off in the 1980s and 1990s were women. After being laid-off most of them had just precarious work.
The pauperization of these urban workers was the last strike against the “unhappy generation”. During the Cultural Revolution (1966-1976) they had no school education or spent only a few years in school, they were harassed by the Red Guards (or took part in the excesses themselves). They were sent to the countryside, where they had to live in poverty and work hard. After their return to the cities – sometimes after ten years and more – they were assigned to unskilled jobs in the combines since they had not learned anything before. In the 1990s they were the first to be laid-off. Now as old people they experience poverty and have to to precarious jobs.
Whereas there is a discussion inside and outside China about the migrant “peasant-workers” (mingong) who to sell their labor power in factories, sweatshops, on construction sites, in restaurants or as domestic workers, the fate of the urban workers gets less attention. A few years ago that was different. Waves of worker unrest took place in certain areas – e.g. the “rust-belt” in the North-East – against layoffs, back wages, bad working conditions, corruption and the non-payment of compensations and social aid.
The majority of urban workers were employed by a danwei,1 a work unit. At the beginning of the reforms, 42 percent of the industrial work force worked there. They produced 75 percent of the industrial output. Other industrial workers were those in urban collectives, those with limited contracts in state-owned combines and those in rural industries (Lee 2003: 72).
The danwei was not only an economic, but also a political and social organization. After finishing school, the urban youth was assigned to a danwei, which secured a life-long workplace, social security and retirement (the so called “Iron Rice-Bowl”). After marriage, the danwei also organized apartments and dormitory accommodation for single men and women. Because of the extensive regulation and control of workers’ lives the danwei were also called miniature society (xiao shehui).
To the outside, the danwei functioned as an executive organ of the state administration. In the socialist planned economy the state decided centrally about the production and the
distribution of resources, and the danwei were not responsible for profits and losses, but just handed them over to the state which assigned necessary resources and labor power. Internally the danwei made sure that everybody worked and thereby contributed to the socialist accumulation of capital. Moreover, the danwei were units of state control over social processes. Economic decisions were politically motivated, e.g. decisions about hiring and promoting workers or the training of cadres. In co-operation with the danwei-level and regional institutions of the Communist Party, workers were trained, controlled and, if necessary, punished. For the workers, the danwei was the structure of their social protection, but also the organ of control and regulation of their whole lives.
In comparison to other parts of the proletariat, especially the agricultural workers, the workers in the collectives and the urban precarious workers, the danwei-workers
did well economically. Their low wage was compensated by the social security. But the danwei-workers, owners of an urban hukou, was not a homogeneous group. Only a minority had the chance to get a full “Iron Rice-Bowl”, particularly those in big danwei. There was also a hierarchy of the workers inside the danwei, first of all between cadres and workers. More differences were made between permanent, temporary and contract workers, between union members and non-union members, between men and women, between older workers with seniority and younger workers. That way the number of those who could claim social benefits and a life-long job was limited, and these divisions were also the base of the wage hierarchy.
Crisis and new despotism
The crisis and following reforms since 1978 had different origins, and we can only get into it briefly. The political and social transformations of the Cultural Revolution since the mid 1960s not only led to economic chaos, but also strengthened the workers influence on company-level decisions. The productivity of the danwei was low, because the workers refused accept an intensification of work and generally harder working conditions. After Mao’s death in 1976 “pragmatists” and “technocrats” inside the Communist Party replaced the previous leaders, who had come to power during the Cultural Revolution, and started to “modernize” the Chinese economy. Their goal was to strengthen the position of the factory leaders and to weaken that of the workers in order to be able to increase productivity and to raise the general economic performance. They wanted to make an economic and social leap forward and at the same time ensure and protect the dominance of the Communist Party. But workers and peasants were also open for changes. They wanted to get rid of poverty, end the social standstill and improve their living conditions.2
The reforms started in the late 1970s in the countryside and later moved to the cities. They were initiated by peasants, too, who started distributing land from the People’s Commune to families. The CP-regime saw a chance to undermine the rigidity of the working class in the countryside and in the cities. Whereas everywhere in the countryside the private use of land by peasant families was introduced, in the cities different strategies were adopted: development of a new private sector of special economic zones with foreign capital, restructuring and rationalizing of the old state industries, closing or “privatization” of little and medium-size danwei, and preservation of big danwei in strategic sectors under state control.
The reforms were no shock-therapy and also did not follow a master plan, they were rather step-by-step and experimental measures, following the motto: “Crossing the river by feeling for stones” (mozhe shitou guo he). Economic, political and social principles were used depending on the circumstances. A “two tracks”-system was adopted to keep up the old structures while simultaneously creating new ones that would later displace the old ones. The crucial elements of the reforms were the strengthened authority of the local administration and companies, economic incentives to improve efficiency by leaving part of the profits to the companies, de-regulation of trade and strengthening of the market orientation, and above all the establishment of a new work regime, which no longer guaranteed life-long security (social contracts, Iron Rice-Bowl) and was built on contractual relationships between employees and employers, in other words: a commodification of labor power. All measures were enforced step-by-step and in different paces. Some were not started before China’s entry into WTO, and some of the reforms are not finished, yet.
From the workers’ standpoint, the reform of the urban industries was the establishment of a “new despotism” inside the plants (Lee 2003: 74). The strengthening of the factory directors and the undermining of the authority of party structures, unions and workers’ councils as well as the cut-down of the social guarantees opened the door for a “hire and fire”-capitalism with a new class of managers on top, recruited from the old cadre structures of the army, party and state administration.
In the mid 1980s, there were already signs that the reforms could not be pushed through easily. The process was rather stagnant, as resistance came not only from the workers but also from the danwei leaders who opposed the splitting, shrinking or fusion of their work units. After 1997, with the intensifying of industrial restructuring and redundancies, the number of conflicts increased despite the government propaganda machine that tried to make workers believe that the restructuring was in the best interest of all in the long run.
“Release” of the urban proletariat
Of course the reforms affected everyone, the urban proletariat inside and outside of the danwei as well as the newly independent peasants. But here we are talking about the urban proletarians who worked in danwei. Before the reforms they were considered the elite of the working class and the backbone of socialist China. For the party, they were the “soldiers” of the state. The reforms changed the perspective. The former task of the regime, to provide for the urban proletariat, later became a “burden”. The restructuring led to a “systematic erosion of labor interests, as it has been accompanied by severe measures against workers, including collective layoffs, deprivation of benefits, ruthless labor rights abuses and brutal working conditions.” (Chen: 237/8). Hassard reports, that in 1997 39 percent of all urban households had a loss of income. This often meant misery, worries about health expenses, education costs and grocery bills (Hassard: 157/8). Many urban proletarians experienced their layoffs as a social degradation to “newborn marginals”, felt “abandoned by society” and “excluded”. (Solinger 2002: 304; 2004: 52, 55). Contrary to the majority of the migrant workers, the urban workers were “downwardly mobile” (Solinger 2004: 58).
Although the weakening and closure of danwei reduced the state control over the lives of urban workers, that did not result in a bigger self-determination of the people concerned. Their lives were now ruled by the necessity to find at least a small income to survive. Often they had to resort to different sources: state benefits, support of relatives, informal jobs (again often through family members), flexible or “hidden” employment. The only ray of hope was the apartment they got through the danwei where they could continue to live (Lee 2007: 130/1).3
The majority of laid-off workers were elderly, un-qualified and women. Most of them found jobs in informal sectors like street-selling, as messengers, security guards, on construction sites and so on, without work contracts, benefits and regular working hours. Often their bosses do not pay them their wages. Some of these jobs were previously only done by mingong, the rural migrants coming to the cities. Often the urban workers cannot compete with the migrant workers who are younger, more mobile and used used to learn and use different skills. They also have lower reproduction costs, because their families still live in the countryside, so they can work for lower wages. Moreover, many employers consider migrants as more assiduous and not spoiled. Many laid-off workers from danwei had and have a hard time finding new (dependable) sources of income.
To avoid collective resistance, the government split the laid-off workers in different groups. These were “official” categories, to which laid-off workers were assigned, one of which was the xiagang4 (literally: laid-off from the position, released from the position). This xiagang-category had several sub-categories: the daigang (literally: to wait for a position), people who rotated between employment and non-employment; the tingxin liuzhi, who kept their position but got no wage; and the liangbuzhao who left their position with neither them nor the company trying to restore it. There was also the group of xiagang who were registered at so-called reemployment centers but could not find a job: They were finally registered as shiye, “unemployed”, and could get state unemployment benefits for two years.
Other groups of laid-off workers were the “internal pensioners” (neitui), workers who had only five to ten years until retirement. They kept the connection to the danwei and got a part of their wage, depending on the financial situation of the danwei; workers who got compensations (mai duan gongling), the amount depending on the sector and the danwei, but had to organize their own pension insurance and similar things afterwards; and a group of female workers who resorted to an extended maternity break, a method often used by women in the 1980s and the 1990s. Just a few of the mentioned groups got state social benefits, others did not get anything. Only the proper xiagang were counted in official statistics and had a (rather theoretical) entitlement to get support finding a new employment and to social benefits, but this still depended on the financial situation of the danwei. All in all, today the unemployment rate in the cities is estimated to be between ten to fifteen percent, but it is much higher in the cities of the rust-belt.
The state wanted to intercept the potential consequences of the layoffs, following the motto: “Make the channel before the water comes” (Hassard: 156). The “private” labor market was supposed to absorb many unemployed, and the reemployment programs were supposed to channel the xiagang into new jobs in the state and the private sector – neither did really happen. Liquidation laws were not followed – due to corruption and embezzlement of company property by cadres and managers, and the laid-off workers could not find new jobs because of their lack of education, age and gender. The funds provided were too small or simply embezzled, and there were not enough jobs available for the xiagang. Sometimes the laid-off workers did not get the required documents (xiagangzheng), so they could not claim their benefits.
At the end of the 1990s, the government introduced the “three guarantees” for making up for the omitted danwei-services and benefits: “subsistence payments” for the xiagang (only until 2002), “unemployment benefits” for all unemployed including those whose danwei declared bankruptcy or was taken over by another company, and a “minimal living cost guarantee” of the local administration for the urban poor. Payments required advance public controls of the personal income, something a lot of people did not want. In the end, those forms were ineffective and only a few people got the benefits. Only a small fraction of the laid-off workers got compensation payments or benefits at all, and those benefits were small and only paid for a short period.
The regime’s long-term goal was to establish an insurance system with four columns: retirement, health care, work accidents and unemployment. But the replacement of the danwei-based social security system through one financed by public and private funds was getting of the ground very slowly, despite the implementation some kind of retirement and unemployment insurances in the mid-1980s. The whole procedure reminds one rather of the motto: “Draining the water before the tunnel is ready” (Cai 2002: 329).
Preparation and development of struggles
The loss of material resources and social security constitutes a break of the old “social contract” between the urban working class and the Communist Party and led to a crisis of the CP’s legitimacy. Since the 1990s the regime was trying to find a new basis for legitimacy, which they found in the new (old) urban middle class and the capitalist cadres. For many urban workers unrest seemed the only option. Even before the reforms, urban workers were not as tame and silent, as one could assume considering the strict organization and social control of the danwei (see Sheehan). In 1984, when the reformers turned towards urban industry, workers had big expectations. They wanted a clear improvement of their situation but were afraid of a return to the conditions before 1949 with precarious jobs and unemployment. Most of the workers were not against the reforms, they considered them necessary in order to end the standstill and get rid of poverty. But they turned against corruption which followed the reforms – as in the “democracy” movements 1978 until 1981 and then 1989 –, against injustice during the execution of the reforms, against growing inequality and the new material hardships. While the regime and the party saw the “Iron Rice-Bowl” as the origin of the problems, for the workers it was the only achievement of socialism which was worth defending.
Although in the beginning the new labor contract law from 1985/6 did only affect few workers, some kind of “job security panic” broke out (Sheehan: 207). The feeling of insecurity, the corruption, the new power of the factory directors, the loss of forms of worker participation – which did not work well before either – and the inflation were reasons for a lot of workers to support the “democracy” movement in 1989. A lot of them had participated in protests earlier, and in spring and summer 1989 some founded independent workers organizations, not only to represent their interests in the companies but also to become active on the political level later on.
The protests in the 1990s, especially after 1997, were a continuation of these movements. At the beginning, most workers were “quiescent, passive, and powerless” (Chen: 238). Although the number of social struggles increased between 1992 and 1997, in the years 1995 and 1996, at the beginning of this new phase of industrial restructuring, not much happened because the workers hoped it would not affect them and the problems were temporary. But the occasional suffering lead to constant pain. Since 1997 the number of social conflicts has increased continuously. There were primarily three different kinds of resistance: 1. Struggles against the non-payment of wages and pensions; 2. Community-struggles against bad accommodation and disintegrating infrastructure; 3. Protests against bankruptcies and connected compensation payments, illegal sales or restructuring of state-owned companies and corruption of cadres. Most of the time these protests followed the same pattern: First, the workers went directly to the responsible danwei-leader or local authorities and made their demands. Usually they were about money or other concrete conditions, rarely political demands like the dismissal of a corrupt official or cadre. In case they did not get the reaction they expected, they went up the state hierarchy, most of the time by writing a petition, and demanded the abidance of the existing laws. Government petitions (and auditions) have a long tradition in China and are being accepted as long as the petitioners follow the rules and do not create chaos. When the authorities ignored the petition, the situation often escalated into street actions (Lee 2007: 112). So far the people involved usually avoid coordinated actions with other workers from other plants or regions or from different social groups because they know that the state would react with repression.
The regime’s calculation that the creation of different “categories” of gongren could prevent them form getting together and resist has worked out so far. During the conflicts the gongren themselves made the distinction between retirees, laid-off workers (xiagang), unemployed and workers, who all fought their own struggles. The old danwei
communities still function somehow, because many gongren bought their apartments in the 1990s, and these old quarters are the place where information circulates and where people discuss possible resistance. But since the different groups each have their own conditions and demands (about pensions, wages or social benefits, or keeping the jobs) the struggles are mostly separated. In this context, Lee uses the term “cellular activism” (Lee 2007: 5).
Each group has its own form of struggle. The xiagang, or unemployed, can not go on strike, just like the retirees. They are already out of the plant and their struggles against the measures that put them in a precarious position come “too late”. Weston sees this as the weak point of the struggles: “Because most of those who are participating in the protests are either laid-off (xiagang) or formally employed workers, they have little ability to disrupt their factories’ production schedules.” (Weston: 70). Often they were fighting months and years after lay-offs or shut-downs because they did not get financial support. They had to use other forms of “disruptive power”, like rioting, camping outside of government buildings and blocking traffic junctions to force the authorities to act.
The danwei workers who were still in the plants fought against restructuring measures that threatened their interests. Their struggles were often “spontaneous” because of sudden grievances, against restructuring programs or planned lay-offs. “Spontaneous” does not mean that there was no preparation or cohesion, but indicates the absence of formal organization or leadership (Lee 2007: 80). They fought the program and demanded participation or ownership. Starting points for the struggles of the danwei workers were labor contracts, wages, bonuses, pensions and compensation payments, but above all planned lay-offs, bad working conditions, a despotic management, corruption and embezzlement. In the early 1990s some workers were still forced to buy shares of their ailing plants. A few years later the plants were closed and stripped by the managers, one reason for the tremendous rage against the factory directors and local cadres.
Here it is important to note that the danwei were officially still public property. Even though workers only ever spoke cynically about their ownership as “masters of enterprises”, they are very much aware of their part in building up the factories. They had job security, but often also low wages. But then they faced losing their jobs and their pension rights – and also their social networks which were organized within the danwei. They saw their resistance against the restructuring as “rightful” (Chen: 248) and wanted participation in the execution of the reforms.5 Workers, who were threatened to be laid off used slogans like “Give the Factory Back to Me! (huan wo gongchang)” (Chen: 248). Sometimes they occupied the factory to prevent the restructuring.6 Strikes were no alternative, because plants were not producing according to their capacity during the restructuring. Sometimes the struggles had the form of “collective bargaining by riots” (Chen: 251), where the workers attacked administration buildings, city halls or those people responsible for their misery.
The disruptive power of the gongren
Many dissatisfied workers, still working or already unemployed, were “using the proletarian rhetoric of the Maoist period to press for social justice in the new economic environment, phrasing their demands in class terms that the authorities find uncomfortable to deal with.” (Hassard: 138) The resistance of the danwei-workers against the lay-offs was often also motivated by a form of “moral economy”. They referred to rights of the past, and compared the suffered injustice with the standards of socialism or even the Cultural Revolution. They developed something like a collective action-frame, as they used the old “communist” rhetoric to fight illegitimate inequality and injustice. Sometimes there was a kind of illusionary Maoism, distorting the past into a period where the workers were happy and content. This was the case especially with older and already retired state workers. Some referred to the position of the cultural-revolutionary “rebels”: “During the Cultural Revolution (1966-1976), the idea of the CCP as a new, exploitative ruling class extracting surplus value from the working classes and passing on its privileges to its descendants became a common one among the more radical participants in the movement, and it was an idea that many of them carried over into the first stirrings of China’s democracy movement in the late 1970s and early 1980s.” (Hassard: 161/2) An image of the Polish Solidarnosc-movement of the early 1980s that circulated among the state workers underlined the idea of exploitation through the a socialist bourgeoisie.
From the outside the struggles seemed to be “unorganized and leaderless” (Chen: 251). In fact, collective protests and demonstrations against local authorities were (and are) often coordinated by (former) foremen and cadres, which played their “traditional” leading role and demanded their “legitimate” rights. They functioned as workers militants and decided how to intervene. Sometimes they played the role of consultants because open or covered organization was too risky. Only a few people dared to organize actions that involved more than one plant.
Even if protests and forms of self-organization of workers were only regional and short-lived, their impact and power was a result of their frequent appearance and because of the regime which was afraid of the potential spread of the movement and that it would turn against the state or the role of the Communist Party as the only dominant political force. These concerns are justified, since the number of conflicts between the state and the workers’ movements have increased for a long time. “The working class is turning from a stabilizing force into a potentially disruptive force in Chinese society” (Cai 2006: 185). There are a number of reasons: Because of the lack of a functioning social system, the poor put their demands for social securities and benefits to the government; the local governments are directly involved in the reforms and the plant shut-downs; and the obvious corruption, embezzlement and theft of state property through CP-cadres, factory directors and government officials provokes people to ask for state intervention – or they attack the responsible people and institutions on their own.
Most of the mobilizations stayed rather small, with a few prominent exceptions. This is due to the fact that many big danwei were spared (and not closed) or had enough cash to pay of the workers. But when peaceful and moderate methods did not help, the protests radicalized and lead to militant encounters. The struggles in 1997 slowed down the lay-offs of 20 to 50 million surplus workers so the restructuring could not proceed as quickly as planned. But if the lay-offs in some industries were delayed, the reforms were still carried out.
The carrot and the stick
Soon after 1997, during the restructuring of the state owned industries and the lay-offs, the regime had to take measures against the struggles. It used the decentralization of the political and economical decision-making, which gave local authorities more influence and power. The local authorities were the first target of farmers’, migrant workers’ and urban proletarians’ attacks. The central government in Beijing intervened only when the regional conflicts got out of control or became explosive. Even today, the central government orders the local authorities to deescalate “unexpected events” (tufa shijian). In private companies the influence of the local government is usually small. There they can only intervene through unions and the local labor bureaus. But in state owned companies they play a big role and can put the management under pressure (if they want to). But nothing happens unless the workers take the initiative, stage open resistance and thereby raise the pressure.
So far the state used a “carrot and stick” strategy during the struggles. On one hand it tries to calm the workers down through compensation and social security payments to soften the effects of lay-offs and work releases.7 In this context, Lee talks about “safety valves“,
to enable the people involved in struggles to “let off steam” (Lee 2003: 83). After 1987 newly founded commissions for mediation have played a role in preventing an escalation of conflicts. The commissions are formed by labor bureau officials, union and employer representatives. Whether there is a chance to quickly pacify the situation also depends on the financial resources of the local state and the danwei that can be used to soften the social effects of lay-offs or to pay back wages. Local authorities and danwei in the prosperous coastal regions had enough financial means, but not those at the “third front”, the provinces of the South West and North East. And of course, only the big danwei were able to pay, the middle and small danwei had no money and the majority of the struggles happened there.
The strategy to pay out only those workers who staged militant struggles also created problems. “Setting the precedent of only meeting the demands of those involved in the most severe outbreaks of unrest risks providing workers with the perfect excuse for disorder.” (Hassard: 150) It is interesting to note that this is similar to what happened in the 1950s, when workers went on strike against the danwei managements, because they knew the managers “bullied the good, but feared the bad.” (Sheehan: 74).
The “stick” was mainly used against the “organizers” of the protests. Insubordinate workers and reputed “ring-leaders” were arrested (and still get arrested) and sent to jail or labor camps for a long time as a threat to the other workers who participate in strikes and demonstrations – in other words: “Kill the chicken to scare the monkey” (Weston: 78). The authorities’ repression is particularly hard against mobilizations across several plants or regions and against independent unions.
The state propaganda continues, asking workers to accept the hardships so that the reforms turn out successful: They should sacrifice themselves for the collective, for the state, and they should put aside their own interests. But the regime also reacted to the struggles: It slowed down the re-structuring, extended the envisioned periods for lay-offs (from 2000 to 2003), and started new welfare programs. In 2002/3, the new government finally put social stability center stage. The reform of the state unions and the (formal) establishment of a system of collective bargaining is supposed to help avoid an explosion of social struggles – similar to the Central European “Social Partnership”. The party slogan of the setup of a “Harmonious Society” has to be understood as a threat against all who dare to use “disharmonious” means to fight for their interests. The state tries to avoid bigger confrontations and bloodletting. But how long will this work? The re-structuring of the unprofitable danwei is not finished yet, and will continue to ignite social explosives.
Cai Yongshun (2002): The Resistance of Chinese Laid-off Workers in the Reform Period. China Quarterly, No. 170, 2002
Cai Yongshun (2006): The weakening of workers’ power in China. In: Brodsgaard, Kjeld Erik; Zheng Yongnian (eds.): The Chinese Communist Party in Reform. London
Feng Chen (2003): Industrial Restructuring and Workers’ Resistance in China. In: Modern China, Vol. 29, No. 2, April 2003
Hassard, John / Sheehan, Jackie / Zhou Meixiang / Terpstra-Tong, Jane / Morris, Jonathan (2007): China’s State Enterprise Reform. From Marx to the market. London/New York
Lee Ching Kwan (2003): Pathways of labour insurgency. In: Perry, Elizabeth J./Selden, Mark: Chinese Society, Second Edition. Change, conflict an resistance. London/New York
Lee Ching Kwan (2007): Against the Law. Labor Protests in China’s Rustbelt and Sunbelt. Berkeley/London
Sheehan, Jackie (1998): Chinese Workers: A New History. London
Solinger, Dorothy J. (2002): Labour Market Reform and the Plight of the Laid-off Proletariat. In: China Quarterly, No. 170, 2002
Solinger, Dorothy J. (2004): The new crowd of the dispossessed. The shift on the urban proletariat from master to mendicant. In: Gries, Peter Hays/Rosen, Stanley: State and Society in 21st Century China. Crisis, contention and legitimation. London/New York
Walder, Andrew G. / Gong Xiaoxia (1993): Workers in the Tiananmen Protests: The Politics of the Beijing Workers’ Autonomous Federation. In: The Australian Journal of Chinese Affairs, No. 29, January 1993 (now known as The China Journal; online: http://tsquare.tv/links/Walder.html
Weston, Timothy B. (2004): The Iron Man weeps. Joblessness and political legitimacy in the Chinese rust belt. In: Gries, Peter Hays/Rosen, Stanley: State and Society in 21st Century China. Crisis, contention and legitimation. London/New York
Ya Ping Wang (2004): Urban Poverty, Housing and Social Change in China. London/New York
The Protests in 2002
The North-East of China used to be the center of heavy industries and is known today as the Chinese “rust-belt”. In 2002 the towns of Liaoyang (province of Liaoning) and Daqing (Heilongjiang) were shaken by a series of workers’ revolts, probably the biggest independent workers’ actions in the history of the People’s Republic of China.
Nearly the nation’s entire oil- and gas production is in the hands of the state-owned company PetroChina. End of 2000 the oil fields of Daqing were re-structured. The workers were told that the company is close to bankruptcy and that they have to face the threat of mass redundancies without being paid compensation. After this announcement about 50,000 workers (out of 260,000) agreed on taking the offered compensation and left the job. Only a minority of them later found new jobs, and having taken the compensation they were subsequently excluded from the social security benefits provided by the oil administration. At least the company continued to pay for heating the workers’ homes. But the trigger of the 2002 protests was the announcement to stop paying for that, too. In Heilongjiang the winters are long and cold.
The demonstrations started on the 1st of March, with only a few thousand people participating in the beginning. Their number increased to 50,000 during the following days. People demonstrated on every working-day, and sit-downs were organized in front of the oil administration. Supposedly some workers who had kept their jobs joined in because the administration had asked them to pay higher dues into the pension fund, while at the same time managers cashed in horrendously high compensation payments. Production was not obstructed.
The protests were organized by the “Provisional Union Committee of Workers sacked by the Oil Administration”. At the beginning they were mostly peaceful. Then the administration changed tactics, because – amongst other reasons – they felt threatened by the possible spreading of the unrest.
On the 19th of March 19 several demonstrators were injured during clashes with the police. On the 22nd of March a large armada of police and army occupied the protest’s meeting points; dozens of activists were arrested. Nevertheless the actions continued. The
demonstrators ceased to shout slogans, though, because everyone who started to do so ran the risk of getting arrested or disappearing. The oil administration promised a wage increase to those workers who were still employed. On the 27th of May, thirteen weeks after the first protest, more than 10,000 people gathered again.
Lioyang is hit particularly hard by the reform of state-owned companies: up to 80 percent of the work-force are said to be “released from work”. Allegedly there had been an informal underground organization running for a long time before the protests started. The core of this organization is formed by workers from the FerroAlloy plant. They had organized bigger actions in 2000 and 2001, targeting delayed wages and plant closures.
The reason for the first demonstration on the 11th of March was this: The town mayor had announced on television that there are no unemployed people living in his town. Responding to his speech several thousand workers from several – partly from bankrupt – companies demonstrated and demanded his dismissal. In the following days these demonstrations gained in size, and up to 30,000 people took part. Again, the administration reacted by applying the “carrot and stick”-strategy: Some delayed wages were paid, some people were promised that their unemployment benefit would be paid soon, an inquiry following the corruption charges against managers of the metal plant was announced.
On th 17th of March Yao Fuxin, a worker of the metal plant, was arrested. This incident further fueled the protests, which then had only one demand: “Free Yao Fuxin!”. Later on more arrests followed.
As in Daqing, two tactics of repression were used: Firstly, a strong visible presence of security forces in town in order to intimidate the workers, and secondly, the hunt for the “ring-leaders”, the activists of the underground organization.
The movements of Daqing and Lioyang inspired the miners in the coal areas of Fushun and Fuxin (Liaoning). In mid-March thousands of them blocked railway-lines in order to protest against announced conditions of mass lay-offs. To hinder the arrest of activists – like in Daqing and Liaoyang – banners and signs were put up, announcing the time and place of the upcoming actions. On the demonstrations themselves there were neither signs nor slogans.
In 2002 the government implemented a new welfare program to boost domestic demand and soften the worst impacts of the xiagang-problem: By fostering the establishment of state-controlled job centers (these centers are supposed to pay out the wages of the employees who are “released from work” and to find new jobs for unemployed), by increasing the wages of employees in the state sector, etc.
In 2007 the wife of Yao Fuxin, who had been sentenced to seven years imprisonment, addressed a petition to the National People’s Congress, asking for the release of her husband. His conditions in jail are extraordinary hard, his health has been destroyed. The petition has been signed by more than 900 of his former workmates.
Struggles in (former) state owned companies
Source: www.umwaelzung.de – German website on social struggles in Asia
Textile factory: Since mid-September 2004, thousands of textile workers (most of them women) went on a 7-week-strike and blocked the factory in Xianyang. Although the former state owned cotton factory was the property of the employees – the workers had to buy shares – it was sold to a company from Hong Kong. This company demanded that the workers sign a redundancy agreement with a small compensation payment, and wanted to treat them as newly hired afterwards, with a probation time, limited work contracts and lower wages. The strikers did not appoint any speakers in order to avoid state repression against “ring-leaders”. Hence the authorities could not find anybody to negotiate with. The strike ended when the management announced to skip the probation time and extend the limited contracts. After months, 20 arrested strikers were released without prosecution.
Steelworks: In August and October 2005, laid-off workers protested in Chongqing for a few weeks. The plant had declared bankruptcy in July. The workers held the management responsible for the crash and demanded a modest compensation payment. When the workers staged a sit-in in front of the city hall, some men attacked the cops – probably agent provocateurs of the police. During the following struggle two women died.
Military factory: In January 2006, workers of a military factory fought against the police for three days in Chengdu. The factory was bankrupt and was supposed to be sold below value. The workers did not get the announced compensation payment. Hence they occupied the factory and took the director hostage. When military police tried to free the manager, a struggle broke out and people got injured.
Public transportation: Since 2001, the city administration of Qingyang had tried to privatize public transportation, but the workers council had denied it five times. In September 2006, the company was sold to a private enterprise after the workers council was forcefully closed by the city authorities. The administration coerced 1448 workers to sign a cancellation agreement. It was a payment of roughly 80 Euros per year of staff membership. But some workers did not get it, because there was not enough money on the company’s bank-account to cover the pay-out. Hereupon the workers went to the responsible board and demanded a solution within two days. When they did not get an answer, the workers besieged the company’s administration building and took the management hostage, until the police stopped the action. After January 2007, there had been constant protests in front of the administration building, but in August 2007 they were stopped by the riot police.
Bank: For years there were occasional protests by hundreds of former employees of the Industry and Trade Bank of China (ICBC). When the ICBC was privatized, 100,000 employees were laid off with a low compensation payment and without pension or health insurance. The bank said they had voluntarily abstained from the job and therefore no legitimate entitlement to full legal compensation. The demonstrations mostly took place in Beijing, especially in front of the bank headquarters and the central union office. People from other cities involved in this conflict also came to Beijing, despite police attempts to prevent them from doing so.
Coal mine: In August 2007, workers of the Tanjiashan coal mine went on strike against planned lay-offs and small compensation payments. They had also discovered that the management had stolen money which had been provided by the government to pay compensations. The management hired 200 private security agents to quell the strike.
1 Formally there were three different kinds of danwei: those in industrial sectors, those in service sectors and administrative institutions.
2 The reforms had more reasons, economic, political and geo-political: At the end of the 1970s the Asian Tigers were already making big advances and showed that a “national” economic development under an authoritarian regime could be possible. For China it was important that three out of four tigers were Chinese: Taiwan, Hong Kong and Singapore (the forth was South Korea). Especially the rise of Taiwan challenged the People’s Republic. Whereas Japanese capital above all had invested in the Asian Tigers to use their cheap labor, at the end of the 1970s traders, bankers and enterprises of Chinese descent living in the tiger-states started pumping capital into the new industries of the Peoples Republic. China’s adjustment to the world-market started during the internationalization of capital in the mid-70s, the beginning of the new phase of the so called “globalization”.
3 According to Lee one reason for relative social stability despite the dramatic results of the restructuring in the rust-belts was the fact that many gongren were able to buy their apartments or rent them cheaply (Lee 2007: 125).
4 “Officially, a xiagang worker is one who meets all of these conditions: (1) s/he began working before the contract system was instituted in 1986 and had a formal, permanent job in the state sector (plus those contract laborers whose contract term is not yet concluded); (2) because of his/her firm’s problems in business and operations, has been let go, but has not yet cut off relations with the original firm; and (3) has not yet found other work in society.” (Solinger 2004: 63, footnote 16)
5 A difference between the workers in the private companies, which have no entitlement to “property”.
6 Here, too, they could draw on historical parallels, namely the establishment of “workers guard teams” (gongren jiuchadui) against sabotage acts by the Guomindang shortly before the “liberation”in 1949.
7 Compensation and retirement payments to danwei-workers have cost the state hundreds of millions of Euros, financed through the state-owned banks.