Peter Main reports on a growing revolt against capitalist restoration which threatens market reforms
Strikes and protests involving tens of thousands of workers have shaken major industrial cities in China’s north eastern provinces of Heilongjiang and Liaoning. They represent a major advance in workers’ resistance to the effects of privatisation and plant closures.
In Daqing on 1 March, 3,000 workers laid off from the oil industry demonstrated, demanding payment of their allowances. On 4 March, 50,000 workers picketed the company headquarters and disrupted the rail network and were met by paramilitary police and a tank regiment. Two days later, 40,000 returned to the city amid reported confrontations with paramilitary forces.
Workers throughout China will recognise the significance of these protests. In 1964, when the workers completed construction of the Daqing oilfield despite the withdrawal of Soviet aid, China’s then leader, Mao Zedong, hailed them as heroes and called on all workers to “Learn from Daqing!”
But now workers have different lessons to learn from Daqing. According to reports monitored by China Labour Bulletin in Hong Kong, the redundant workers belong to a new union which is also growing in other oil industry centres as far away as Xinjiang in Western China and Sichuan in the South West.
The spread of workers’ resistance reflects the scale of lay-offs being forced through by the new bosses in the industry. Sinopec, for example, the biggest corporation in the oil industry has already laid off 250,000 and is planning a further 100,000 redundancies over the next five years.
The background to the Daqing closures reveals all too clearly what capitalist restoration has meant in the industry. PetroChina was formed in 1998 out of the assets of the state oil industry in Northern China. Its new management, still dominated by the representatives of the Communist Party, prepared it for listing on the New York and Hong Kong stock exchanges by a “restructuring”. This left them with all the recently developed plants and divested the older ones, including Daqing. Workers’ resistance was dissipated by agreements to pay both welfare and heating allowances. It is the non-payment of these that has sparked the protests.
Massive cuts have also been seen in the other core industries of the north east, steel and textiles. In Liaoyang City these led to the holding of joint demonstrations by seven thousand workers from six factories in early March. This was followed by demonstrations of some 30,000 from 20 factories from 12 March to 14 March. Here too, workers have elected their own delegates to represent them but their leader Yao Fuxin, a worker laid off from the Ferroalloy plant, was arrested.
Despite reports of confrontations with police and paramilitary units, there appears to have been no widespread military repression of the most recent strikes. This may reflect more than just local commanders’ hesitation. Beijing itself is clearly worried by the scale of unrest in a year that will see the beginning of the transfer of power from the current leadership centred on Jiang Zemin.
The most recent official figures from the Ministry of Labour and Social Security, for the year 2000, show a total of 327,152 disputes in industry and 8,247 strikes, up from 6,767 in 1998. Increasing references to strikes in the official media suggest that militancy has continued to grow.
The Financial Times believes fear of unrest also lies behind a deceleration on the implementation of many of the reforms China introduced in order to qualify for membership of the World Trade Organisation at the beginning of this year. With as many as 150 million people unemployed, at least seasonally in the countryside, and reports of 25 per cent unemployment in the old industrial cities, the prospect of mounting foreign competition is an obvious cause of concern.
In January alone, Foreign Direct Investment into China amounted to US$ 2.966bn, one third above the previous year, and contracted investment reached US$7.187bn, very nearly double last year’s figures. The reason for this massive increase is that China has now begun to open up areas of the economy previously closed to foreign investment. Inevitably, that investment will lead to restructuring and dislocation as it has done in other sectors.
Fear of social unrest, however, is not the only factor influencing the slowdown in WTO inspired reforms. Beijing may want foreign investment but it also aspires to become an economic superpower itself. It does not want to lose control over the key
sectors of industry or finance.
In banking, for example, although foreign banks will be allowed to deal in both commercial and personal banking by 2007, regulations have been introduced restricting their growth to one new branch per year.
A similar picture is developing in the telecoms industry. Until now, foreign firms were simply not allowed to operate in the sector at all. With mobile phone use increasing at the rate of five million new users per month, they saw the WTO accession as a signal to move in fast but have found themselves blocked by new regulations.
All the same, WTO rules are framed to the advantage of the big multinational corporations and there can be no doubt that they will, in the end, get their way. Already, they are turning away from the system of “joint ventures” with Chinese firms, which was the main way in which they could enter Chinese markets or establish production facilities within the country. Increasingly, they will set up their own wholly owned subsidiaries within which they will have complete control over all aspects of the operation.
The scene is set for a period of rivalry and jockeying for position between multinationals, the Chinese state and the fast growing private Chinese companies. This could provide an opportunity for China’s workers to assert themselves. As the reports from Daqing and Liaoyang show, the destabilisation caused by capitalist restoration and development has not only restructured industry but has also encouraged workers to begin to renew their own organisations.
If confirmed, the founding of a new union to represent redundant state industrial workers would mark a very important development. The official All China Federation of Trade Unions has always been primarily a tool of management rather than a representative of workers’ rights and a genuinely independent organisation is a high priority for the whole labour movement.
Nonetheless, millions of workers remain within the official unions and, as state owned firms are privatised, it may be necessary to demand that these unions fight for their members’ interests and turn themselves into real workers’ organisations.
Whatever organisations emerge in the coming months, a high priority for them will be the unionisation of the new working class that is forming in the cities as millions of mainly young workers arrive, often illegally, from the countryside. Just as in the 1920s, when trade unions were first formed in China, the new unions will send a shock wave through the country. Successful action to raise wages, limit hours and improve working conditions will immediately raise questions about the future of the country that trade unionism alone will not be able to answer.
That is why, alongside the fundamental task of organising workers in all industries and regions, it will be vital to create a political party of the working class, committed to the overthrow of the remnants of the Maoist dictatorship and the rule of the new class of capitalists.