Angry Winds in China
Protests, Strikes and Revolts by Workers and Peasants
Revolutionary Worker #1071, September 24, 2000 An angry wind is blowing in China. For several years now, worker and peasant strikes, protests and revolts have threatened the government and the country’s stability—highlighting how the return of capitalism in China has meant deepening misery and impoverishment for hundreds of millions of people.
For over 25 years, China was a socialist country where society was run in the interests of the masses and people consciously worked to do away with all forms of exploitation and oppression. But in 1976, after the death of Mao Tsetung, a new government led by Deng Xiaoping came to power. Socialism was overthrown and capitalism was restored. The socialist path of getting rid of inequality and class divisions was reversed. And now under capitalism, the gap between the rich and poor, between the city and the countryside, between men and women—all the differences and inequalities in class society— have been and continue to be deepened and widened. The country is, once again, under the domination of foreign powers and China’s leaders have opened the door wide for imperialist investors who dream of high profits to be made off of sweatshop conditions and cheap labor.
The Chinese government has tight control over the news media, and information about anti-government struggles is frequently censored. Sometimes, news of a major strike or revolt involving thousands of workers or peasants leaks out only weeks or months later. Reports of many other incidents never makes international news. But scattered reports paint a picture of an intense situation in the cities and the vast countryside, where there is growing struggle against unemployment, high taxes, government corruption, lack of health care and the general deterioration of living conditions. Clearly, millions of Chinese workers and peasants are proving Mao’s statement that "Where there is oppression, there is resistance."
Most recently, in August, more than 20,000 farmers in central China staged protests against heavy taxation. This is in the mountainous territory of Jiangxi, where Mao Tsetung and the Red Army set up the first revolutionary base in the 1920s.
The revolt was centered in the town of Yuandu, which has a population of about 100,000. Here, farmers armed with sticks and clubs surrounded a government building, and over the next 10 days protests spread to other towns. According to Reuters news service, local officials reported that, "Armed paramilitary police were dispatched to the region after rampaging farmers smashed government offices and looted homes of the rich, highlighting a threat to the government from peasant discontent simmering around the country."
Chinese officials said more than 2,000 militiamen were sent in to try and put down the struggle, scores of peasants were arrested, and it took five days to bring things under control.
In China’s countryside, where two-thirds of the country’s people live, the income of most peasants has stayed the same or gone down—while the government has extracted more and more taxes. One news report quoted farmers saying that they made 400 yuan a year from each acre of land but had to pay 180 yuan per acre in taxes. After deducting other costs, including fertilizer, they only earned about 100 yuan per acre a year. Peasants also have to provide free labor to the state for flood prevention and irrigation work and must pay various fees, like for having a house and farming a private plot. One peasant reported that in 1995, 85% of the farmers in his township had money saved —but now, 85% are in debt.
Added to this, record grain harvests this year have driven down the price of grain. The government, which monopolizes grain purchases, decided not to buy all of the grain—and at the same time, banned farmers from selling it elsewhere. In some areas, the government has forced farmers to pay for storing their harvests in its warehouses. All this has added to the growing discontent among the peasants.
These recent incidents come after several years of growing peasant revolts nationwide.
At the beginning of 1999, one incident which managed to surface in the news revealed the volatile situation developing throughout the countryside. On January 8, 1999, more than 10,000, gathered from the surrounding hills at the government office in Daolin, a town of a few thousand. They came to demand an end to excessive taxes and corrupt authorities. Hundreds of armed policemen and a special riot squad, with masks, shields, batons and tear gas, were sent in from the provincial capital of Changsha some 30 miles away. According to witnesses, even before the peasants leading the struggle began to deliver their speeches, the police told people to leave and then hit the crowd with tear gas.
One gas canister exploded against the leg of Zhang Huangli. Zhang was badly wounded and lay without help for half an hour in a spreading pool of blood. His wife said when a nephew tried to move him, he was clubbed and arrested. Zhang eventually made it to the hospital, but died later that day.
Protests continued into the next day and more than 110 people were arrested. The police then went on a manhunt for four leaders of the protest who had escaped arrest. Reward posters, plastered on village walls by the police, were quickly torn down by angry farmers.
The situation in the Daolin township is typical of many other areas where there have been peasant uprisings. The administrative area here of some 50,000 people is scattered in many villages, where peasant families squeeze out two rice crops a year on small plots of land. Anger over rising taxes and resentment of local officials who are seen as corrupt have been seething for years.
Two years before the protest where Zhang was killed, local farmers from several villages of Daolin formed an illegal organization which intentionally adopted the non-threatening name of, "Volunteers for Publicity of Policies and Regulations." Similar groups were formed in at least four of the 12 other townships in the surrounding county. According to policy set by the central government, taxes on farmers is not supposed to exceed 5% of their previous year’s income. The farmers in Daolin charged local officials with breaking this rule by inflating the incomes of local villagers in their records, so they could levy higher taxes without violating the 5% limit.
Anger among the peasants in Daolin was also aimed at the numerous fees collected by authorities. Farmers say they have to pay a fee for every pig slaughtered —and that every family is charged a "slaughter tax" once a year even if it has no pigs. Fees are also collected for production of "special products" like nuts, even when none are grown. There are also fees for animal inoculations, for school, for permits to get married or to have a baby. Then, the farmers say, there are special levies for projects like power plants and schools. For these peasants, who have meager incomes, all these taxes and fees are a tremendous burden.
ANGRY WORKERS IN THE CITIES
While the Chinese government is being hit with peasant revolts in the countryside, there is also growing discontent and unrest in the cities—and increasing numbers of strikes and protests among workers. One of the main things sparking these protests is the huge number of workers being laid off—mainly due to the downsizing or closing of state-owned companies that are now being privatized.
Most recently, on August 25, about 70 workers at the Meite Packaging Co. in Tianjin took six executives—an American, two Malaysians and three Hong Kong residents—hostage for 40 hours. The company had been a joint China/U.S. enterprise, employing around 1,000 workers who packaged food and drink products like Pabst Blue Ribbon Beer and Jianlibao health drinks. The workers were protesting job cuts resulting from the company ending its ownership by the state and becoming a completely foreign venture. Starting in early August, workers went to the factory gates every day, protesting and trying to block deliveries and people from going in. The managers of the factory refused to meet with them.
In 10 years the Meite plant was transformed from a state-owned company making pipes to a beverage packing firm jointly owned by the Chinese and an American corporation—and then, just recently, to a factory wholly owned by the Ball Corporation, a U.S. company.
The transformation of the Meite Packaging factory is typical of what’s happening to thousands of companies throughout China—which is sending millions of workers into the streets, unemployed. The Chinese government, in continuing efforts to lure foreign investors and gain entry into the World Trade Organization (WTO), have ordered state-owned enterprises to become "economically self-sufficient"—which means huge layoffs, shut-downs, privatization, and transfers of ownership to foreign investors. Along with this whole process has come tremendous corruption, where government, party and factory officials end up getting lucrative positions in the revamped businesses. Opportunities for corruption open up when state property is released into the private market and former factory bosses have managed to buy profitable ventures at bargain basement rates—angering the workers even more.
The Meite plant, like thousands of other factories in China, is a victim of the increasing foreign investment being urged and aided by the Chinese government. Through a series of joint-venture partnerships in the 1990s, Meite’s parent company, the Ball Corporation, ended up with four packaging plants in Tianjin. Now its plan is to consolidate the four into one and move to a special economic development zone, where the Chinese government offers tax advantages. The downsizing of four factories into one has meant huge layoffs, and the workers say the $1,200 one-time severance payment given to those who are laid off is totally inadequate. The Ball Corporation, based in Broomfield, Colorado, has been doing business in China for more than 15 years and has a total of 17 wholly owned or joint-venture companies in China.
Other reports of worker unrest throughout China reveal a situation which has the government very worried:
• In late 1999, workers at the formerly state-owned Red Lion Paint Factory in Beijing ended up in a standoff with the management after a new private owner wanted to close the plant and sell the land. After a delegation of workers failed to persuade the management to keep the factory going, some workers attempted suicide in an official’s office—one woman swallowed a bottle of pesticide and two men slashed their wrists.
• During the course of six months in one southern province, two major riots disrupted business-as-usual for days. In one city, thousands of laid-off coal miners blocked a major railway—until they were awarded long-overdue severance pay. In another incident, tens of thousands of workers clashed with the police, protesting local corruption.
• Last December, 1,000 silk mill workers blocked a highway in southwestern China for two days to protest the fact that they hadn’t been paid in a year. The workers fought with the more than 200 police sent in, throwing stones and bottles. Some of the workers’ banners read, "We want to eat. Our children want to go to school.’’
• At the beginning of 1999, there were reports of a demonstration in central China’s Hunan province, where 500 workers brought more than 1,000 vehicles to a standstill on a major bridge which is a vital link to other cities. The workers, from the state-owned Changde Cotton Mill in Changde city, demanded three months of wages they had not been paid and were protesting corruption in the plant’s management. The factory, previously the largest state-owned enterprise in the city, had employed around 10,000 workers. The workers blocking the bridge were among 3,000 workers who had been laid off.
In 1997, workers from several state-owned enterprises staged a sit-in at the Acheng Railroad Station in Harbin City, in the Heilongjiang Province. According to reports, laid off workers who had been denied monthly subsidies had taken "action to find food and clothing for themselves"—taking control of workshops and warehouses and seizing stockpiles of sugar. On New Year’s Day, some older, weak, sick, and handicapped workers went to the Acheng Railroad Station and lay down on the railroad tracks before dawn, hoping to kill themselves to lighten the burden on their families. Their relatives followed them to the station and eventually more than 3,000 Acheng Textile Mill workers and more than 1,000 onlookers gathered at the station, and transportation on the railroad was paralyzed from morning till night.
CAPITALIST DEVELOPMENT = UNEMPLOYMENT AND HARDSHIP
Under a planned socialist economy, where profit was not in command, companies in China had sufficient funds to offer higher wages and benefits. But since the return of capitalism, the drive for profit has ruled China’s industrial development. And this has led to millions of workers becoming victims of factory closings, privatization, increasing foreign investment and other measures aimed at making China’s factories more "efficient" and profitable.
By the end of 1996, more than half the state-run industries in China had been unable to sell their products or pay wages and pensions. In the worst-off industrial cities, up to 80% of the workforce has been laid off. In Shenyang, the capital of Liaoning province, 350,000 workers were laid off, many without pay. In Tianjin, which had attracted a lot of foreign investment, state-run industries had been laying off workers all year. Companies like the Flying Pigeon Bicycle Factory had halted production for a part of each month—and 7,000 of the 20,000 workers were dismissed. Unemployment among Tianjin’s industrial workforce had reached 40%.
At the beginning of 2000, official statistics revealed that China’s state-owned enterprises (SOEs) had laid off 11 million workers in 1999. Less than 5 million had been able to re-enter the workforce. With an additional 6 million unemployed workers —according to the government statistics—this brought the total number of officially counted unemployed to over 12 million. But even this number hugely underestimates the real number of people out of work in the cities.
"Off-duty employees" laid off by SOEs receive subsistence stipends while they look for new jobs and are not counted as unemployed. Only workers who do not have jobs who have registered with the Department of Labor and Social Security to find new work are termed "unemployed."
Some experts in China estimate that when "laid-off" workers are counted as unemployed, the urban unemployment rate could be as high as 20%—approximately 70 million of China’s 350 million urban workers. And according to World Bank estimates, an additional 35% of China’s 140 million workers in the state-owned sector could soon be laid off.
Women are being especially hard hit by all this. China’s Ministry of Labor reported that in 1997, women accounted for only 39% of China’s work force but nearly 61% of its laid-off workers. Surveys showed that 75% of laid-off women were still unemployed after one year, compared with far fewer than 50% of the men who were laid off at the same time.
To deal with growing unrest among unemployed workers, the government set up "re-employment centers" in every city and required local governments to share the costs of living stipends with the companies. Workers who sign up at the centers are supposed to get training and job referrals and receive monthly subsistence payments of about $20 to $35. But many times such aid never materializes, and failing companies pay little or nothing to their former employees. Now, even this unreliable safety net is scheduled to be phased out at the end of 2001.
The No. 2 textile mill on the east side of Beijing employed about 7,000 workers in the early 1990s. Since then it has laid off 3,000, with more sent packing every month. The nearby No. 3 textile factory, which employed 6,000, shut down entirely in June. Workers from these plants have no re-employment center, and the workers have had to search for new jobs on their own. They are receiving monthly stipends of $28. A few former co-workers have found jobs mopping floors at new shopping centers, while some sell items in street markets.
Meanwhile, in an effort to encourage and speed up the reform (elimination) of State-Owned Enterprises, the Chinese government has decided to abolish its "off-duty employment system" by 2003. Under this system, workers laid off by SOEs still receive subsistence stipends for up to three years and await new jobs to be provided to them.But laid-off workers will be categorized as unemployed immediately after they are laid off.
China’s SOEs currently provide "off-duty employees" with two forms of assistance. Laid-off workers maintain the existing employment contract for up to three years and workers who are unable to find another job are provided with unemployment aid for three years. During the "off-duty period," workers receive one-third of their basic living stipend, which is equivalent to half of their former salaries. And in addition, "off-duty workers" are supposed to receive technical training at re-employment service centers (RSCs) established by the SOEs—which are supposed to help off-duty workers look for other types of employment.
But now, as the plan to abolish the off-duty system goes into effect, the SOEs will be able to drastically reduce their responsibility for laid-off workers—cutting back on the cost of maintaining RSCs and reducing their share of off-duty workers’ living stipends. The plan to get rid of the "off duty system" is scheduled to begin in Guangdong province, which has a relatively large number of private and foreign-invested businesses. Local labor and social security bureaus in the province have already announced that newly laid-off workers are not covered by the off-duty system.
The official unemployment rate in China is only 3.1 percent. But this figure doesn’t include millions of laid-off workers who are signed up on the rolls of the "re-employment centers," nor does it include millions of urban workers who lose their jobs but never register as unemployed because they don’t qualify for benefits. Also uncounted are the estimated 100 million impoverished rural residents who have migrated illegally from the countryside in search of work. And more significantly, the official figure only counts unemployed workers in urban areas. It ignores unemployment in the countryside — where there are millions of peasants out of work.
Some estimates put the number of unemployed in the countryside at more than 130 million. And the crisis in the countryside is being further intensified by the return of many of the millions of peasants who left the rural areas to look for work in Special Economic Zones (SEZs) and coastal cities.
GROWING GAP BETWEEN RICH AND POOR
The return of capitalism in China has meant a growing gap between rich and poor. A survey by China’s State Statistics Bureau done at the end of 1999 reported a stark and widening gap among urban and rural residents.
The richest 20% of households accounted for over 42% of total income, with an average income of RMB 992 (US$120) per person per household per year. The poorest 20% of households comprised 6.5% of total income, with an income of RMB 124 (US$15) per person per household—only one-eighth that of the richest 20%. The poorest 10% accounted for a mere 2.2% of total income.
The individuals with the highest income added up to no more than 1% of the total number surveyed, but their annual income was more than RMB 200,000 (over US$24,000) per household.
The poor included many laid-off workers, unemployed, retired, employees in businesses that have closed or cut back, and those living on pensions or social security benefits due to health problems or old age.
By August 1999, over 6% of households nationwide had an income per person of less than RMB 100—a little more than 12 U.S. dollars.
When China was a socialist country, great advances were made in actually narrowing the gap between the countryside and the cities—as well as eliminating all kinds of other inequalities in society. But today, capitalist China’s policies are driven by the brutality of the free market and the drive for profit. This has given rise to increasing misery and impoverishment— and an explosive situation where millions of workers and peasants are proving Mao’s famous statement that, "It’s right to rebel against reactionaries!"
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