William Hurst, The Chinese Worker After Socialism (Cambridge University Press, 2009), £55
In July 2009 a mass demonstration by steel workers, members of their families and other local inhabitants erupted in the north eastern Chinese city of Tonghua. They were protesting against threats of job losses as news spread that the local steelworks was to be privatised. On some reports, up to 30,000 people took part in the protest, which ended when local officials announced that the privatisation would be postponed.
It made headlines in the West mainly because the protesters beat a manager to death when, according to the official China Daily website, he “disillusioned workers and provoked them by saying most of them would be laid off in three days…saying that a total number of 30,000 employees would be cut to 5,000”.1
Following so soon after the riots in China’s far western Xinjiang province, and a less-reported but equally large protest against police brutality in the central province of Hubei,2 the Tonghua riot has provoked much discussion about China’s stability in the midst of the world recession.
But it has also highlighted a group of workers who have consistently lost out from China’s “economic miracle”: workers in China’s state-owned factories, which have shed over 60 million jobs in the last 20 years. The Chinese Worker After Socialism is a short but very useful overview of the other side of China’s rise.
Some of this ground has previously been covered by Ching Kwan Lee’s book Against the Law—Labor Protests in China’s Rustbelt and Sunbelt, which I reviewed in International Socialism 118,3 but this book covers both a wider geographical area and a longer timescale.
One of the key components of Deng Xiaoping’s reform strategy in the early 1980s was to devolve economic responsibility to the lower levels of China’s bureaucracy, giving both factory managers and local officials greater control over their local economy. This was designed to make the Chinese economy as a whole more flexible and responsive to change. In this they were largely successful, but it also deepened the inequalities between different areas of the country.
Hurst’s main focus is on what he calls “subnational units” of the economy, using this to explain why the impact of closures and unemployment was different in different regions and provinces. This wasn’t primarily because of privatisation, which played very little part in Chinese industry in the 1980s. Hurst notes, “In no region was the simple and inexorable advance of the market genuinely a primary factor.”
State-owned industries suffered from the same problems as industry in Russia and Eastern Europe: low productivity, declining rates of profit and backward technology. As new village industries grew up in southern China, these provided further competition for the older factories. How severe a problem this was depended on a variety of factors.
In Shanghai, which had a diverse and growing local economy and a strong and wealthy local government, there were before 1997 almost no layoffs (though much voluntary redundancy). In north eastern China, by contrast, whose economy was dominated by heavy industry and where provincial and local governments were strapped for cash, workers were being laid off or being put on short time from the late 1980s onwards. Even here, however, there were significant variations, with provincial capitals seeing fewer layoffs than other cities.
1997 was a watershed. Before then layoffs and closures were mainly the unintended consequences of other policies. The Chinese Communist Party congress that year saw a fundamental turn-around, insisting that state-owned industries had to become profitable whatever the cost. The party’s general secretary called for “bankruptcies, layoffs and departures, cutting workers to increase efficiency…a competitive mechanism of the survival of the fittest”.
The impact was immediate. Within two years over one third of state sector jobs in Shanghai had gone. Though the dynamism of new industries and the private sector meant that most workers who lost their jobs found other work, they tended to be lower paid and more precarious. Elsewhere there were far fewer opportunities, and Hurst details how different regions diverged widely. There were two constants, however: women workers everywhere found it more difficult to get other work, and those most likely to get other work were managers or party members.
There was almost no resistance to closures, but big fights were to come as promises about welfare payments and rights were consistently broken. Between 1999 and 2002 there were huge confrontations between laid-off workers, local officials and the police, especially (but not only) in the north east.
This is the weakest part of the book, in that the author gives very few details about the fightbacks, and this chapter could usefully have been much longer. He does make interesting distinctions, however, between the various ways that provincial officials reacted, noting in particular that local governments in Sichuan province were both most repressive towards workers and most likely to arrest factory managers.
He also underplays the extent to which protests won. Individual protests often won some extra welfare or back-payments from local governments and factory managements. More importantly, the scale of protest contributed to the government’s decision to centralise pension payments in 2001, thus ensuring that most workers actually got the money they were promised. If protests dropped off sharply after 2002, this was largely because conditions for laid-off workers had substantially improved.
What of the future? Hurst rather vaguely concludes that “the remnants of the socialist working class continue to inhabit centre stage in this great political drama”, but it’s possible to say rather more than that. The state sector still employs tens of millions of Chinese workers, in core sectors of the economy (steel-making, shipbuilding, defence, and so on), from which foreign and private capital are mostly barred. Although there are fewer workers in the state sector than before, those who are left are arguably more powerful, as the Tonghua protest showed.
A recent report from the Hong Kong based China Labour Bulletin entitled “Going it Alone—the Workers’ Movement in China 2007-2008”4 analysed 100 strikes and workers’ protests over the previous two years. A total of 21 of these were in state-owned enterprises around issues such as redundancy payments and official corruption, though the report doesn’t give the outcome of any of the disputes. Hurst’s book is a sobering account of how a key section of China’s working class have lost important battles over the past 20 years, but the fight is far from over.
1: “Manager killed in plant riot”, available online at www.chinadaily.com.cn/cndy/2009-07/27/content_8474590.htm
2: See, for instance, “China: Mass incident sparked by a dead body”, available online at http://globalvoicesonline.org/2009/06/21/china-mass-incident-sparkled-by-a-dead-body/
3: “China’s Growth Pains”, available online at www.isj.org.uk/?id=430