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                         by Dr. Róbinson Rojas Sandford (1997)

Since the counter-revolution took over in China in 1977, two main
problems have been mounting: increasing unemployment and
income differentiation. In September 1995, Far Eastern
Economic Review published the following:

 Rural unemployment poses the "biggest threat" to China, which must
expand labour-intensive industries, according to a State Statistics
Bureau Report. "Labour supply will continue to outweigh demand for
a long time", the report said. It called China's official estimates
of 100 million rural jobless inaccurate. Unofficial tallies put the
number at 200 million -nearly 17% of the population".

In October 1995, Li Boyong, Chinese Minister of Labour, said that
"the problem of oversupply of labour will remain for a long time,
a fact which exerts considerable pressure on reform and
development", see BOXES 3 and 4.

Two years after, Beijing Review, Vol. 40, No.33, August-18 24 1997,
dedicated its cover story to "Creating jobs for the unemployed". The
cover story, written by Li Ning, stated:
      "In the wake of the 'soft landing' of China's economy,
       particularly the drastic slowdown in inflation, employment has
       now become a major concern in the country's socio-economic life.
       ...Apart from a surplus rural labor force, the unemployment of
       redundant employees of state-owned enterprises constitutes
       China's biggest job problem. In addition, many workers are not
       fully employed, creating a status of involuntary unemployment,
       owing to insufficient operations of their factories...These
       problems, however, are not only confined to state-owned
       enterprises, but also haunt collective enterprises and businesses
       of other ownerships...According to the State Statistical Bureau,
       about 15 million employees have been made redundant nationwide,
       accounting for 12.5 percent of the national total...
       "...Under the previous centralized planned economy, employment
       was monopolized by the government...The all-embracing security
       and welfare system exercised by enterprises covered the housing,
       health care and pensions of their employees. Leaving one's unit
       actually meant losing everything"...

Three weeks after this grim description, the same publication (Beijing
Review Vol. 40, No. 35, September 1-7, 1997) revealed that unemployment
in the rural areas was 35%, up from nil in 1978 when the counter-
revolutionary government unleashed capitalist relation of production in
the countryside.

Under the heading "Lower Unemployment Rate a Top Priority", the
magazine wrote:

  "Bringing China's high rate of unemployment down is a primary goal
   of macro-economic control, according to Hu Angang, an eminent
   economist, in an article published reciently in OUTLOOK, an
   influential news weekly.
  "Real unemployment rate in urban areas was 7.5 percent by the end of
   the first quarter of this year, translating into 15.5 million people,
   Hu said. This was 4.5 percentage points higher than the 1996 figure
   of 3 percent, or 5.5 million people.
  "Rural areas have 175 million surplus labourers, representing an
   unemployment rate of 34.8 percent.
  "The high unemployment rate is attributed to an insufficient amount
   of funds to create jobs, large-scale industrial readjustments, an
   increasing number of lay-offs at state-owned enterprises, and the
   high rate of economic growth and investment.
  "Labor is China's richest resource, but how to make best use of it is
   a key link to sustained economic growth. China needs to develop
   labor-intensive industries and save capital while using more workers.
  "Hu proposed a number of ways to reduce unemployment:
       -enlarge the service industry in the areas of food, commerce
        and tourism;
       -develop the non-state sector to absorb laid-off workers;
       -support small labor-intensive enterprises;
       -encourage unemployed urban dwellers to open small businesses;
       -support foreign trade based on labor-intensive industries; and
       -develop more labor markets and job agencies, especially for
        those who have no special skills, and improve social security
        for unemployment and retirement."

From the above figures, the following table can be built:
     Rural labourers                 503 million
     Rural labourers unemployed      175 million   (34.8%)

     Urban labourers                 207 million
     Urban labourers unemployed       16 million    (7.5%)

Total number of labourers            710 million
Unemployed labourers                 191 million    
    Which gives a rate of unemployment of 26.8%


Since 1977-78, when the people's commune system was dismantled by
the government led by Deng Xiaoping, the new authorities unleashed
an economic problem that cannot be solved within the capitalist
framework: the contradiction between capitalist economic efficiency
and social efficiency. People's communes and Chinese state enterprises
were devised as socially efficient units of production both in rural and
urban areas, in order to avoid social tensions created by side-
effects of increasing levels of productivity. Both socially efficient
units of production being dismantled, the threat of unemployment became
a dramatic reality.

China's official accounts indicate that by 1984, capitalist
modernization in the countryside pushed 180 million of rural
workers out of work, pushing what they called  a "human deluge"
toward the big urban centres, creating social and economic tensions
in the cities, which saw the generation of ghettos and shanty
towns, unknown to the Chinese population during the socialist
revolution 1949-1977. See BOX 1.

In late 1988, the Chinese public security system published a report
in the official newspaper Renmin Ribao, describing a sharp rise in
criminal activities like prostitution, gambling, pornography, drug
abuse, theft, etc, adding that "in robberies on China's railways in
rich provinces like Guangdong and cities like Shanghai, the thieves
tend to be farmers living along the railways or unemployed people
and youth...many of them attack the railway in well organized
groups". This report was the outcome of a Public Security
Conference in Beijing, which blamed lawlessness on the
following factors:

--the so-called drifting population of job seekers and vagrants,
which has risen sharply and is estimated in 50 million people at
any given time (See BOX 2)

--the police force suffers from shortages of trained manpower and

--there is spread corruption among officials

--there is spread poverty "as never witnessed by the Chinese people
after 1949", especially due to drastic price increases

--unfair distribution of income.

On 11 January, 1995, People's Daily (Renmin Ribao) main article
sustained that "recent economic policies have caused serious
environmental problems and incurred in high social costs", and
quoted official statistics:

1,000,000 households had an annual income of Y80,000, another
5,000,000 households had an annual income of Y4,000, and the
average income per household was Y533. One million households
accounted for 0.4 percent of total households.
5 percent of urban dwellers live below the poverty line, and 30 per
cent of rural households live bellow poverty line.

Renmin Ribao summarized saying that "the main concern is how can
economic reforms stimulate development without destroying social
cohesion", especially because China's new private entrepreneurs
(rich peasants, rich civil servants, foreign transnational
corporations) were exploiting a labour force that was overworked,
physically abused, paid less than the minimum wage (US$ 100 per
month), forced to work in unsafe conditions, and there was spread
illegal use of child labour. See BOX 5.

The above have been creating a wave of worker unrest while "Communist
party cadres and relatives of China's leaders are making fortunes
while millions of workers are being thrown onto the streets with no
social security net" (M. Sheridan, "China hit by wave of worker
unrest", The Sunday Times, 19 October 1997). See Box 6

One main economic mystery for some is that China's economic growth
in the last fifteen years or so had been so fast that the label
"miracle" is attached to it. But, employment creation has not been
a "miracle" at all. In accordance with Chinese official statistics
75 million jobs were created between 1985 and 1994, which does not
look as impressive if we know that during the same period 112
million workers were added to the Chinese labour force. Thus, what
really happened during the Chinese "economic miracle" is that the
economy was not able to provide jobs for 37 million workers.

        CHINA. NEW LABOUR FORCE 1979-1994
Year               New workers (million)
1979                      13.39
1980                      13.73
1981                      13.49
1982                      13.82
1983                      14.16
1984                      14.51
1985                      14.87
1986                      11.93
1987                      12.16
1988                      12.39
1989                      12.63
1990                      12.88
1991                       9.07
1992                       9.19
1993                       9.31
1994                       7.53
source: State Statistical Bureau, "Statistical Yearbook", various
years, Statistical Press, Beijing

There are two explanations for the mismatch. The first, is that
China's participation in the world market calls for capital
intensive/high technology enterprises, which puts the Chinese
economy in the same dilemma than industrialized countries are, and
the second is that there have been many "misrepresentations" of the
so-called economic miracle.

By and large, in the last fifteen years China's main investment
have mostly been in buildings and not in Non Residential Fixed
Investment, profits have fuelled a consumption boom or skimmed off
for corrupt purposes, there has been also a massive waste of
resources (inefficiency, especially in labour-intensive rural 
enterprises -township, villages and private), and, finally, 
development is notoriously uneven, especially away from the 
coastal areas.

On 15 October 1994, Renmin Ribao denounced that "striving to exceed
production quotas has led to falsified statistics and warehouses
stuffed with unwanted goods", and before, on 20 June 1994: "the
rapid change of the economic structure has increased the
difficulties of employment", adding that the State Statistical
Bureau "warns that factory officials often exaggerate output to
claim performance bonuses"..."township and village enterprises also
inflate their figures to avoid being closed down"..."rural cadres
overstate peasant incomes to conceal their failure to improve
living standards, and to cover up for their extortion of illegal

Another weakness is that 85 percent of the 75 million new jobs
created between 1985 and 1994 were jobs in the so-called "rural
enterprises" which are labour-intensive and responsible for most of
the environmental pollution in rural China. See Table 2


Year         Township     Village     Joint, individual   Total
                                       and private/1
1994                                                      120.00/2
1993                                                        n.a.
1992                                                      101.47
1991                                                       98.87
1990                                                       96.27
1989            23.84       23.37           46.46          93.67
1988            24.90       24.04           46.51          95.45
1987            23.97       23.21           38.86          86.04
1986            22.74       22.67           30.24          75.65
1985            21.11       22.16           13.19          56.46
1984            18.79       21.03            9.36          49.18
1983            17.43       19.66            5.75          42.84
1982            16.18       18.38            2.76          37.32
1981            15.01       17.18            0.33          32.52
1980            14.26       16.98            0.32          31.56
1979            13.55       16.78            0.31          30.64
1978            12.87       16.59            0.28          29.74

1  In accordance with the Chinese terminology, "rural enterprises"
are all enterprises owned by townships, villages, groups of
households and individuals (they cover all economic sectors, e.g.
manufacturing, mining, construction, trade, transport, services,
and are referred two in the Chinese media as "township and village
enterprises". "Individual" enterprises refer to those employing
less than 8 workers. Establishments employing 8 or more workers are
termed "private". Joint refers to joint-ventures.

2  Figure given in Beijing Review -October 30-November 5 1995.
Source: Rural Development Institute, "Rural Industries in China",
Chinese Academy of Social Sciences, Beijing, 1990
State Statistical Bureau, "Yearbook of Rural Social and Economic
Statistics of China", Beijing, various years

Even when foreign direct investment is playing a major role in the
"economic miracle", its impact on employment is minimum, and the
explanation is simple: capital intensive/high technology
production. Official statistics for December 1994 indicate that
there were 90,784 foreign-funded enterprises with 12.6 million
employees, which is less than 2 per cent of the labour force.
Conversely, employment in township and village enterprises was 5.7
percent of the labour force in 1978, then increased to 14.6 percent
in 1988, reaching 16.8 percent in 1994.

Utilizing Tables 1 and 2 and the data released by Chinese sources
so far, the unemployment situation in 1994 was as follows:

1984: rural workers redundant(unemployed)       180 million
1984-1994: new labour force                     112 million
1984-1994: rural workers redundant (unknown)     n.a.
1984-1994: urban workers redundant               10-20 million
TOTAL NEW JOBS NEEDED 1984-1994                 302-312 million

1984-1994 rural jobs created                     71  million
1984-1994 urban jobs created                     13  million
TOTAL JOBS CREATED 1984-1994                     84 million
TOTAL UNEMPLOYED/REDUNDANT IN 1994              218-228 million

LABOUR FORCE IN 1994 (Chinese estimates)        714 million
                                                 31-32 percent

If figures given by Hu Angang are correct, then there were about
66 million new unemployed/redundant people in the rural areas
during this period. This means that only 71 million rural
workers found a new job out of 246 million made redundant by
"modernization" and "guided capitalism". The mismatch between
the figures in Table 3 and the figures by Hu Angang for the
total labour force does not change the dramatic pattern of
employment in China after almost 20 years of counter-revolution
 (Robinson Rojas)
Sources: Beijing Review, several issues
         State Statistical Bureau, various publications
         Renmin Ribao, several issues

With such a vast "labour surplus" is not difficult to imagine why
the new Chinese private entrepreneurs are becoming extremely rich
using a labour force that is overworked, physically abused, poorly
rewarded, push to work in unsafe conditions, and making possible
the generalized utilization of child labour. 

In accordance with late releases by the World Bank the Chinese economy
can create about 10 million new jobs per year only if its annual
economic growth is about 13 percent. In 1996 it was 10%, and the
official forecast for 1997 is of about 8%.

=BOX 1============================================================
Bejing Review,  March 20-25, 1989, page 7
EVENTS/TRENDS     "A new headache: Human Deluge"

In mid-February, a passenger train from Zhengshou in Henan Province
to Urumchi in Xinjiang, could not start on time simply because the
wheel springs of one car were overloaded, weighted down with

Earlier in March, a train travelling from Chongqing to Beijing
carried 342 passengers in each car exceeding the maximum load limit
by 200 per cent.

Everyday, these panting and groaning trains carry hundred of
thousands of transients from one place to another. Most of the
travellers are rushing to the prosperous open coastal cities in
search of their fortunes and their rosy dreams.

In many Chinese cities, one can readily find the same scenes: the
seething and jostling seas of people in the waiting rooms of the
railway stations, who eventually squeeze their way onto already
crowded trains with their luggage and bedding.

Then there are the vagrants who, jobless and homeless, seem always
to be drawn to these stations to compound the problem.

According to the provincial statistics, released after the Spring
Festival ( a number of days in a Chinese style New Year 
celebration ) which fell on February 6 this year, a total of 2.5
million people has swarmed into Guangdong Province from Hunan,
Hubei, Sichuan and Henan provinces and the Guangxi Zhuang
Autonomous Region.
The local government of Guangdong Province was forced to seek help
both from the state council and the neighbouring provinces to take
measures to stem this "disaster" of human floods by taking their
people back to their home.

Meanwhile, Nanjing in Jiangsu Province and the Haikou city in
Hainan Province were also inundated by transients from other
provinces. A report said that about 40,000 to 50,000 people are
still stranded in Haikou city.

According to a survey made by the Ministry of Public Security from
the 23 large cities nationwide with a population each of more than
one million, the total daily average figure of the flowing
population now in China has reached 10 million. The survey also
said that about 50 million Chinese are on the move and that the
figure is still climbing. The daily average number of such people
in Shanghai has reached 1.83 million and Beijing's figure is 1.15

Are these people crazy? What are they doing? Four farmers from
Fuyang in Anhui Province told a newspaper reporter that after the
Spring Festival, farmers are supposed to go into the urban areas to
make money.

Others said they would do whatever jobs the urban people won't do.
Over the past years, they have helped the city people by offering
them services. Shoe-repair stands, knitting works, baby-sitting and
street cleaning are but a few of the vital areas they labour in.

However, the number of jobseekers far outstripped the number of
jobs available in the cities. Most of them went to the urban areas
without any definite purpose and always are at a quite risk. This
phenomenon has been described as "the blind flowing river of

Experts point out that the increasing influx of the rural surplus
labourers into the cities is an inevitable result of China's
current economic reforms and the development of the market economy.
And a series of social problems have cropped up at the same time.

Statistics show that in 1984, China's countryside had 330 million
farm labourers. Since the introduction of the household
responsibility system and leasing out of land to individuals, 180
million have become redundant. Researchers at the China Rural
Development Research Centre predict that China will have 240 to 260
million surplus labourers by the year 2000, most of them in the
rural areas.

A report, based on investigation in eight provinces and 10
counties, warns that China's social and economic development will
be seriously disrupted if the country fails to provide enough jobs
for its 200 million surplus rural labourers.

Human deluge brought about chaos and disorder in society. Last
year, about 50,000 criminals fleeing hither and thither were
caught, that account for one per thousand of the nation's total
flowing population. The police station at the Beijing Railway
Station said that about 70 percent of the criminals and law-
breakers discovered in the station area were outsiders of Beijing.

A recent emergency circular issued by the State Council urged all
the local governments of various provinces, municipalities and
autonomous regions as well as central government departments to
strictly control the flow of such people and to persuade them to go
back home soon.
===END BOX 1============================================================

=BOX 2=============================================================
Beijing Review, July 18-24, 1994

by Li Tan

The recent vast migration of millions of rural labourers from
China's countryside to big cities is seen by many analysts as one
of the most serious problems facing the country as it moves toward
a market economy.


At present there are an estimated 120 million surplus labourers in
China. By 2000, there will 490 million to 540 million farmers in
the rural areas, about 200 million of whom will have to find jobs
outside of the agricultural sector. Supposing that 10 million, a
generous estimate, can find a new job each year as the country's
economy develops, by the turn of this century at least 140 million
labourers will remain jobless.

In the early 1980s, a rural township economy emerged to provide
work for farmers who left their work in agriculture but did not
move to urban areas. According to the Ministry of Labour and
Personnel, various townships enterprises recruited an average of
12.6 million such workers each year from 1984 to 1988, but the
numbers dropped sharply from 1989 to 1992, to an average of 2.6
million each year.

Given the lack of employment opportunities in rural areas and the
growing surplus of labourers from the agricultural sector, it is
inevitable that China will face an even larger flow of population
into the cities between now and the beginning of the next century.
China is now faced with the task of utilizing this force
constructively, and preventing an uncontrolled flow of population
from the countryside to major cities which if allowed to continue
could strike a major blow to social and economic stability.

The flood of rural labourers that has inundated the cities since
the 1980s is seen as both a blessing and a curse.

On the one hand, the migrant labour force is an abundant resource
waiting to be tapped. Various localities can export their surplus
labour to provide the manpower needed for various projects in the
booming cities and towns. At the same time, the workers can send
capital back home for their own development. According to
statistics, labourers from six provinces, including Sichuan, Anhui
and Jiangxi, earned a total income of 28 billion yuan in 1992, 6
billion yuan of which was earned by those from Anhui, a figure
higher than the province's entire revenue for the year. Moreover,
the farmers brought skills and knowledge from outside to their
native homes. For instance, 12,000 of the 21,000 township
enterprises in Mengcheng, Anhui Province, are operated by such

On the other hand, the old housing registration system established
in the 1950s aimed at controlling population flow excluded millions
of farmers from the urbanization process that brings higher living
standards. However, in an effort to supply the much-needed cheap
labour for the sprawling development, many cities and provinces,
have relaxed the 40-year-old regulations, giving a whole new sector
of the country's people an opportunity to realize the "Chinese

The great influx of low-wage labour can do much to boost economic
development in cities. In Shenzhen, one of the country's five
special economic zones, migrant labour accounts for at least 50
percent of the city's total labour force. Local residents, some of
whom grumble about the new comers, seem increasingly dependant on
the cheap labour to maintain their higher standard of living. In
large cities such as Shanghai and Beijing, about 90 percent of the
migrants work sweeping streets.

While it supplies cities with badly needed labour to contribute to
the national economy, the mass exodus of young and middle-aged
farmers is, at least partly, responsible for increasing crime,
vagrancy and other social ills in urban areas.

Beijing has nearly 2 million outsiders, adding to the city's
already swelling population of 9 million permanent residents. A
survey in 1993 showed that outsiders were responsible for 80
percent of criminal offenses in the capital. Similarly, it was
found that 80 percent of the people arrested in the southern Pearl
River Delta and other coastal regions came from other provinces.
Shanghai has 2.5 migrant workers, accounting for one-seventh of its
total population. Such workers have severely affected social
security, hygiene and family planning in this Oriental metropolis.
At the same time, the jurisdiction of Shanghai and other cities
cannot effectively reach, nor regulate the itinerant population.

Rural workers who lack of industrial skills, and have a
comparatively poor educational background find it hard to provide
the versatile and sophisticated skills necessary for their new
work, and many find it difficult to obtain gainful employment. Some
of the newly-arrived farmers, who face unemployment and below-
standard living conditions, become a volatile social sector.

What's more, rural workers flowing into cities drains much of the
quality labour and strength out of the countryside.


It is impractical to try and halt the flow of the migrant
population. It is also impractical to take a laissez-faire attitude
toward it. Tackling problems that come with the floating workforce,
and turning the trend into a constructive, rather than destructive
force, the country must adopt well-rounded and farsighted policies.

Analysts have suggested a number of measures to attain this goal.

The government must use macro-controls to sustain the rapid
economic development, while at the same time, maintaining stability
and equal distribution of jobs for the influx of migrant labour.
Efforts should be made to further develop agriculture and township
enterprises so as to provide a better working environment for
surplus labourers who choose to stay in their native regions.
Possible approaches include expanding the scale agricultural
production by using farm machinery, developing and increasing the
number of township enterprises that can absorb surplus labourers,
and channelling some of the labour force to towns and smaller

After extensive surveys and research, the Ministry of Labour and
Personnel drafted a series of proposals for action concerning this
issue. The ministry wants to establish a labour force information
network that will help distribute workers to areas where they are
needed most, while at the same time avoiding saturation of the job
markets. It also suggests a range of emergency controls for the
peak seasons before and after the Spring Festival Holiday when the
railway system become clogged with some 10 million surplus migrant

In Guangdong Province, such measures have already been successful
in curbing the flow of migrant workers. Since February 1993, the
provincial government has maintained publicity campaigns informing
rural labourers of the actual employment situation in the province,
stating that not all people will find jobs. It also ruled that the
local factories and services could not hire more than 150,000 rural
labourers from other areas during 1993. And finally, it established
labour offices in many provinces and autonomous regions, permitting
labourers to apply and be hired by Guangdong factories and
businesses in an orderly fashion. According to a report in the
GUANGMING DAILY, the province absorbed 6 million rural labourers
without creating disorder and traffic disruptions experienced in
recent years.

Looking ahead, the most effective means of regulating the flow of
population and eliminating its negative impact is to promote the
growth of jobs in the countryside through the development of the

China's public security departments are also launching reform of
the current residential registration system and are working on new
provisions for social security control. The moves will allow them
to control the immigrant population, safeguard the legitimate
rights and interests of the workers, and maintain social order in
END OF BOX 2=====================================================

=BOX 3===========================================================
Beijing Review, October 30-November 5, 1995
by Wu Naitao

How is unemployment manifested in China? And what sound strategy
will the Chinese government adopt to deal with this virtually
global problem? Two recent news items from the Chinese Ministry of
Labour may serve to shed some light on this issue.

The first cites statistics which put the late 1994 rate of urban
unemployment in China at 2.8 percent, a 0.2 percentage point
increase over 1993, with the number of unemployed increasing to
approximately 5 million from the 1993 figure of 4.2 million. An
official from the Ministry of Labour said that an analysis of the
cause and development trend of unemployment indicates the situation
is rather grim, and the problem has become a major problem
affecting China's social progress and stability.

The second mentions some significant achievements and valuable
experiences gained in the 1994 re-employment project trial
implemented in 30 Chinese cities. The project will be promoted
nationwide this year (1995). Experts note that the development of
the re-employment project and the adoption of a series of other
employment promotion measures clearly demonstrate the Chinese
government's efforts to reduce the impact of unemployment on

Along with the deepening of reform, one of the most outstanding
problems is the need to place redundant personnel currently
employed in state-owned enterprises. People have high hopes for the
measures taken by the state, including the reemployment project, to
control unemployment and re-employ redundant workers. However, as
the unemployment problem today is a chronic social malady facing
many countries, an intelligent assessment tells us that a proper
solution can by no means be achieved overnight. In China, many
problems unique to the country must be addressed.

Moreover, according to a recent forecast, the rate of China's urban
unemployment during the Ninth Five-Year Plan period will equal that
of the Eighth Five-Year Plan period and urban and rural employment
will face great pressure. Data from the State Statistical Bureau
provide and analysis of the employment situation in China over the
next several years:

Toward the end of the Ninth Five-Year Plan (year 2000), the growth
of China's labour resources will reach new highs. The number of
unemployed urban workers and rural labourers shifting to cities and
towns will increase considerably. Plus the labourers generated by
natural growth, the number of urban labourers to be employed will
stand at 50 million, or 10 million annually, during the Ninth Five-
Year Plan period; at the same time, there will be some 15 million
redundant workers.

In light of the new employment situation, the Chinese government
will set new goals for itself, based on China's own experiences as
well as international successes.

Specifically, the goals are these: During the Ninth Five-Year Plan
period, efforts will be made to keep the urban employment rate at
above 90 percent, the unemployment rate at around 5 percent, and
the rate of those not fully employed down to 5 percent, thereby
addressing to a certain extent both the chronically unemployed and
those having difficulties getting and holding jobs; in the rural
areas, efforts will be made to keep the transfer of surplus rural
labourers to non-agricultural sectors at around 10 percent.

To achieve this goal, the state will adopt the following five
concrete measures:
--Improve the unemployment insurance system, and implement the re-
employment project. China will gradually establish an unemployment
insurance system to cover all workers at all levels; a three-party
responsibility system for expenses to be shared by the state, the
work unit and individual will be implemented; unemployment relief
will be closely linked with re-employment; and the system will be
implemented through state legislation. At the same time, the
functions of unemployment insurance will be given full play to
guarantee daily necessities of life and to support the employment
effort; measures such as job recommendation and guidance
counselling will be adopted; job-retraining will be introduced and
methods of organizing the unemployed to engage in production will
be adopted, along with appropriate support policies to accelerate
the re-employment of the chronically unemployed.
--Implement "the orderly trans-regional flow of rural labourers" in
a planned and orderly manner.
--Establish an unemployment forecasting and warning system,
strengthen the monitoring and control of the labour market, ensure
that labour resources (supply) are equitable balanced with labour
market demands.
--Promote economic development and open up more employment avenues.
--Expedite the development of the employment system and employment
service and form a new labour market mechanism.
------------------------end br----------octnov1995----------------
==END OF BOX 3====================================================
=BOX 4===========================================================
Beijing Review, October 30-November 5, 1995

By Li Boyong (Minister of Labour)

As the global economy becomes increasingly integrated, the world is
faced with the major social and economic issues of unemployment and
poverty. In the face of such complex challenges, international
cooperation consistent with each nation's reality is necessary to
achieve fuller employment and reduce poverty. I would like to
present the following comments pertinent to China's experience.

--Enhancing productivity and increasing economic growth are the
foundation for full employment and social advancement. Economic
development and social advancement should be mutually supportive.
For a developing country, special efforts are required to increase
economic growth, which is the material base and necessary condition
for expanding employment. Since implementing its policy of reform
and opening, China has consistently emphasized economic development
as a central task. As a result, the nation has experienced
sustained and rapid economic growth.
  China's annual GDP growth is 9.4 percent, providing a solid
foundation for employment expansion. In the last decade, 75 million
people have been employed. The urban unemployment rate has remained
below 3 percent. Moreover, the living standards of employees have
been significantly improved. Real annual wages have risen 4.3 per
cent. Meanwhile, China devotes close attention to rural economic
development, and has devised comprehensive employment plans for
urban and rural areas.
  In 1994, 120 million people worked in township enterprises. Our
plan for moving surplus rural labour to urban areas is proving
effective, and orderly movement is taking place according to
demand. With 22 percent of the world's population, China's
achievement in employment are outstanding, thanks to steady, rapid
economic development.

--Adopting policies and establishing the focus of work in
accordance with unique national conditions is an effective way to
promote employment. Because each nation has different conditions
and employment options, each one is entitled to formulate and
implement policies according to its own situation.
  The Chinese government attaches great importance to employment,
and regards solving labour problems as the primary task of the
labour department. In addition, in close cooperation with
entrepreneurs' organizations and trade unions, the government has
drafted a series of policies and measures to tap labour resources
and promote employment. These policies focus on actively developing
the labour market, expanding employment options and constantly
upgrading the employment service system.
  In recent years, considering the growth of long-term
unemployment, and the number of redundant workers, China has
implemented the "reemployment project", helping enterprises find
appropriate positions for redundant workers.
  In addition, the government strives to help jobless people to be
reemployed as quickly as possible. In this process, the
unemployment insurance system has been introduced to guarantee
basic necessities for the unemployed and promote reemployment.
Meanwhile, the employment service system has been improved.
Labourers who find jobs for themselves are encouraged by the
government and supported by the public. Special attention is
devoted to helping people improve their vocational skills so they
can meet the demands of the evolving labour market. All these
policies and practices are being carried out in accordance with
China's unique conditions, and therefore prove extremely effective.

--Strengthening labour laws to safeguard the rights and interests
of workers provides a sure guarantee for employment. The ultimate
goal of the Chinese government's current labour practices is
ensuring labourer's rights, and facilitating their share in the
nation's economic achievements.
  The Labour Law of China contains special provisions which promote
and protect the rights and interests of workers. Moreover, China is
devoted to developing its labour law system. Toward this end, it
has promulgated the Law on the Protection of the Disabled, the Law
on Protecting Women's Rights and Interests, the Regulation on the
Prohibition of Child Labour, the Regulation on Minimum Enterprise
Wages, in addition to other laws and regulations related to
employment and improved working conditions.
  The Employment Promotion Law, the Social Insurance Law, the
Labour Supervision Law and other important laws are being drafted.
In the future, China will improve its labour law system.

--International cooperation plays an increasingly important role in
boosting employment. Today, as global economic relationships become
more closely integrated, solving the serious problems of
unemployment and poverty requires extensive regional and global
  The Chinese government advocates international consultation on an
equal footing, mutual benefit and cooperation. It opposes imposing
one's own views on others, and the use of sanctions in
international trade, investment, multinational enterprises and
matters related to labour and employment.
  The Chinese government believes that wealthy nations should
shoulder more responsibility by helping developing nations
eliminate poverty and reduce unemployment. Such a course of action
would promote common prosperity.
  China is strongly against the practice of linking "social
provisions" with international trade. Such practices result in
diminished international trade, and they are particularly damaging
to the economies and employment efforts of developing nations.
Positive international cooperation is the best way to promote
international trade, economic development and employment.
  China has a huge number of workers, and additional ones are
consistently being hired at an impressive rate.
  Nonetheless, China's current rate of economic development cannot
meet the demand for full employment. The problem of oversupply of
labour will remain for a long time, a fact which exerts
considerable pressure on reform and development.
  During the on-going readjustment of the industrial structure, and
the expansion of enterprise reform, in particular, the emerging of
a large number of the unemployed and redundant employees has
aggravated the problem.
  In 1994, 1.87 million people received unemployment benefits, a
number equal to the total in the seven years since the program was
launched. Meanwhile, the number of redundant workers rose to 3
  Reemploying unemployed workers is difficult because many of them
possess inadequate skills for the modern workplace. Others are near
retirement. Failure to solve this problem may stem reform and
undermine social stability.
  Today, as China is moving toward new system, it is called to do
an excellent job regarding employment. This includes establishing
a new employment system which satisfies the demands of a socialist
market economy.
  In recent years, various regions and departments have acquired
valuable experience in addressing the problems of unemployed and
redundant workers. The central tasks of the reemployment project
are: reemploying the unemployed as soon as possible by utilizing
both policy support and employment services, giving full play to
initiatives from government, enterprises, labourers and society;
combining enterprise employment, self-employment and social
support; and providing employment guidance for unemployed and
redundant workers, including job recommendations, training of
workers for new positions and organizing the unemployed to engage
in manufacturing.
  The results of tests conducted in 30 cities across the nation
indicate that such comprehensive approach constitutes an effective
means for coping with the nation's complicated employment problems.
  Over the next five years, China will implement the reemployment
program on a nationwide basis. Through the three-phase work of
experimentation, approximately 8 million people will participate.
In the process, more job opportunities will be created. Meanwhile,
the government will assist those having difficulty getting jobs,
thereby gradually solving the problem related to redundant
personnel, a matter that has hindered efforts to expand the reform
process. These actions will create a favourable environment for
maintaining social stability, promoting economic development and
stimulating enterprise reform.
included box:

The 18 married women recruited by Shanghai Airlines have completed
their seven-month training in early October and are now at work.
They are called "sister stewards" because they tend to be
approximately 10 years older than the airline's average women
flight attendants.
The airline began recruiting unemployed textile workers late last
year and raised its age limit for flight attendants from 23 to 36
years at the end of 1994, and hired 18 married women out of the
2,300 applicants.
The married flight attendants who have received consistent praise
from passengers and co-workers, are helping the airline elevate its
level of service.
Shanghai Airlines officials say the women were hired in accordance
with a reemployment plan.
The plan itself was developed to help solve the problem of
unemployed workers, which has become increasingly serious in recent
years. The problem of unemployment is particularly acute in
Shanghai, which has more than 300,000 unemployed women.
Shanghai Airlines' decision to hire the unemployed women has
attracted praise.
Moreover, other firms are preparing to follow suit, including the
Shanghai Subway Co., which recently hired a group of unemployed
---------------------------end of included box--------------------
---------------------------end of br oct-nov1995------------------
=END OF BOX 4=====================================================

=BOX 5============================================================
TIME MAGAZINE -June 27, 1994

 By Michael S. Serrill

"Leather belts, leather belts, big bargain price!", shouted Chen
Zhong, hoisting a fistful of the articles in question on the edge
of Ritan Park in Beijing. Chen (not his real name) is one of
China's new entrepreneurs -but hardly by choice. A year ago, he was
laid off by the state-owned leather factory where he worked for
more than 25 years and was given  a stipend of $10.50 a month, less
than half his previous salary and not enough to support his family
of four. The leather plant is half shut and bankrupt because it
cannot find a market for its shoddy goods.

Factory managers apologized profusely to Chen and gave him some of
their stockpiled belts to sell. But when he first tried to find
buyers at the park, two inspectors from the Industrial and Commerce
Bureau berated him for vending without a license. Chen exploded in
frustration. "Go ahead, take me away, arrest me!", he barked. "By
tomorrow morning you'll find my wife and children in front of your
office. You feed them". The inspectors backed away.

These are hard times for workers in the world's largest officially
communist state. The "iron rice bowl" of guaranteed employment has
been broken, and in the past year millions of Chinese from the
cash-strapped state sector have been fired, laid off or furloughed
at half their salaries. In 1993 in Heilongjiang province alone 2
million workers lost their jobs. Millions of others are being
exploited by China's new private entrepreneurs -overworked,
physically abused and paid less than the minimum wage. Working
conditions are frequently unsafe; the number of workers killed or
injured in mine disasters and industrial accidents has risen
dramatically. Illegal use of child labour is rampant.

To make matters worse, inflation is galloping along at 20% or more
annually, eating away at every worker's livelihood. Says an
official in Gansu, a northwest province: "Even cadres like me are
beginning to feel the pain, and I earn at least three times as much
as an ordinary worker".

The response among labourers has been increasingly militant. Since
March 1994 a series of wildcat strikes and slowdowns has been
reported in Shenyang, Dalian, Chengdu, Shenzhen and other major
cities. A particular centre of discontent is the northeast, home to
many of China's crumbling stateowned industries. According to the
CHINA LABOUR BULLETIN, a publication printed in Hong Kong and
smuggled to mainland labour dissidents, more than 300 strikes and
protests broke out in March and April in the provinces of Anhui,
Heilongjiang, Gansu, Liaoning, Shaanxi and Sichuan, some lasting
more than 40 days and involving more than 200,000 people. Tens of
thousands of unemployed and underemployed workers marched through
Heilongjiang province's two largest industrial towns, Harbin and
Qiqiha'er, the BULLETIN reported. Some demonstrators reportedly
committed suicide in front of officials, while others chanted, "We
want to survive; we want to eat".

The reaction of China's communist leaders has been ambivalent.
Knowing that its very legitimacy is at stake, the government has
expressed sympathy for worker grievances, extending unemployment
benefits and passing new laws designed to curb employer abuses.
Blame has been heaped on Taiwanese, Hong Kong and South Korean
manufacturers, and the official All-China Federation of Trade
Unions (A.C.F.T.U.) has been encouraged to organize workers in
foreign-owned factories. But at the same time Beijing has made
clear that it will not tolerate unsanctioned labour organizing.
Worker protests have been broken up, often brutally, by police.
Labour dissidents have been harassed, arrested, forced underground
and chased into exile. In China today, nothing triggers violent
repression more readily than the threat of a Solidarity-style
independent labour movement.

The spreading labour unrest is also testimony to the difficulty of
converting a welfare state, with craddle-to-grave protections for
workers, to what Beijing's leaders call a "socialist market
economy". China may boast one of the world's fastest-growing gross
domestic products -GDP shot up 13.4% in 1993 and at nearly 13%
annual rate in the first quarter of 1994- but at least for the
short term, the process of converting to a market economy has cost
China many more jobs that it has created. State-run factories,
which still employ more than two-thirds of China's industrial
workers, find that they cannot compete with more efficient private
firms unless they fire a hefty proportion of their staff. For the
first time, they are being encouraged to do so.
The government estimates that 10 million to 20 million of the 109
million workers in state enterprises are redundant. Calculations by
private economists push that figure much higher. In a study of the
laundry-detergent industry, McKinsey & Co. concluded that mainland
producers employ 10 times as many workers as Western factories with
the same capacity. Executives of Shanghai Petrochemicals, one of
the most successful state enterprises, admitted in 1993 that 40% of
workers were involved in "non-core" activities -in the company's
clinic, nursery, cafeteria and other human-resource departments.

"Enterprise reform", to close outmoded factories and make the rest
more efficient, has been official policy since 1984, but until very
recently little was accomplished. Since 1988 only an estimated
1,000 firms have been allowed to go bankrupt. The reason is that
the state enterprises are not just places of employment: under old-
style communist thinking they were social nuclei, providing their
workers with everything from cheap housing, education and medical
care to free haircuts. "Government departments in charge of these
enterprises don't want to see them go bankrupt because they will be
the ones in charge of the welfare of the unemployed workers", says
Zhou Shulian, a senior fellow in the Institute of Industrial
Economics in Beijing.

Banks have also resisted the closedown of failing state firms
because "they are the largest creditors of the state-owned
enterprises", explains Zhou. Since last summer (1993), Chinese
banks have been under pressure from Vice Premier Zhu Rongji,
China's economics czar, to make their lending standards tougher.
Chinese bankers estimate that of the $350 billion in credit that is
outstanding in the banking system, at least 10% will never be
repaid. With so much at risk, says a Western economist, "banks
don't want these firms to close until their loans are repaid."

But the crunch is at hand. Warns Zhou: "If no enterprise go
bankrupt, the state will finally go bankrupt". The central
government, weighed down with a $2.38 billion annual deficit -$14.8
billion according to some Western economists- is cutting state
subsidies and demanding that state enterprises take responsibility
for their own profits and losses. At the same time, an influx of
quality foreign-made products into China has rendered the goods
produced in many state factories unmarketable. The proportion of
state enterprises operating in the red increased from 34.2% at the
end of 1992 to 49.6% at the end of 1993, according to the State
Statistical Bureau. Losses for last year totalled $1.8 billion, up

The result has been to visit desperation -and some new
opportunities- on millions of workers. Says Yan Yun, 33, a former
seamstress in the state-owned textile mill in Shenyang, the capital
of northeastern Liaoning province: "When I started the job seven
years ago, I thought I would never leave it". A year ago, however,
the factory was unable to meet its payroll, and she was told she
did not need to come to work every day. For six months she worked
part-time, taking home half her former salary of $23 a month.
Finally she gave up and started a small restaurant. She has no
regrets. "Factory jobs these days just don't pay enough for a
family to live on", she says.

Yan Yun is one of the lucky ones. More than 60% of Shenyang's
factories are bankrupt, and most of the thousands of laid-off and
half-time workers have found no new employment. "It's the older
workers who have been hit hardest", notes a local journalist. "They
were the first to benefit from communism and are the last to
benefit from the reforms".

Those who have survived best are often husband-and-wife teams who
succeed at what has become known as YIJIA LIANGZHI, "one family,
two systems". In this relatively ideal arrangement, one spouse
hangs on to a state job, thereby snaring such important perks as
subsidized housing, education and medical care for the family, even
though take-home pay may be paltry. The other spouse plunges into
the sea of moneymaking either by becoming a private entrepreneur or
by working for a joint-venture company.

But for the typical redundant worker without education and
resources, there is no easy way to avoid penury. And the
frustration and despair are multiplying across China. In many major
cities the unemployed loiter on street corners looking for odd jobs
as maids, waiters, dishwashers and car washers. Those who do have
jobs are often at war with their employers. The Labour Ministry
reports that last year( 1993) 12,358 labour disputes went to
arbitration, an increase of 50% over 1992. And those figures, say
China experts, are just a small sample of the breadth of unrest. To
its credit, the Beijing government is making no effort to hide the
crisis. "The rapid change of the economic structure has increased
the difficulties of employment", said the Communist Party newspaper
PEOPLE'S DAILY in a recent editorial. "This year and next year, the
employment situation will be extremely grim".

The Statistical Bureau recorded an unemployment rate of 2.6% at the
end of 1993, up from 2.3% a year earlier. But outside analysts
consider this a gross underestimate that takes no account of
workers on reduced pay nor of the army of 150 million to 200
million surplus rural labourers.

More than 30 million farm labourers, thrown out of work by
mechanization and made mobile through the lifting of restrictions
on travel, have moved to the cities in the past few years to take
odd jobs or do menial work in new factories, and millions follow
them every year. "These people end up living in ghettos in coastal
areas", says Jean-Phillipe Beja, a French sinologist in Hong Kong,
"and many come from the same district or village".

Though it is at the heart of China's economic miracle, foreign
investment offers no cure for the unemployment morass. The private
industrial sector -millions of mostly small firms that employ an
estimated 30 million people- takes up just 5% of China's work
force. Yet 10 million people join the ranks of job seekers every
year. In fact, some foreign-owned companies are contributing to the
crisis through a pattern of abuse of their workers.

Last week (June 1994) at least 20 people were killed when the Yu
Xin Textile Factory in the Zhuhai Special Economic Zone near Macao
collapsed. Fire had swept through the six-story building the day
before. The factory, which was owned by Chinese, Hong Kong and
Taiwanese investors, was one of the largest in Zhuhai, employing
about 1,500 workers. Earlier the top two floors of the Xie Cheng
toy factory outside Shenzhen collapsed, killing at least 11 workers
and injuring 27. Like many of the thousands of electronics, toy and
garment factories that dot southern China, the Xie Cheng plant
broke almost every law on the books. The owners did not have a
permit to construct the uncompleted building, much less the
authority to move anyone in. The factory used child labour; two of
the dead girls were found to be 14 and 15 years old. Those who
survived, including 900 workers living in adjacent quarters, hadn't
been paid in two months.

"When the investors came to China, they thought they had to abide
by all these laws", says Han Dongfang, an exiled labour activist
who produces the CHINA LABOUR BULLETIN from his tiny apartment on
an outer island of Hong Kong. "After a couple of years they
realized they didn't. That is why the situation has become worse".
Analysts say industrialists have been able to sidestep safety rules
in part because officials are eager to attract new business, but
also because those same officials frequently have their hand out
for bribes. "It is much cheaper to bribe the official in charge",
says Beja, "than to pay for the permits or for the cost of meeting
safety standards".

Most of the workers in foreign enterprises, Han says, are women
from the interior, "who are more obedient and less willing to stand
up for their rights". Foreign businessmen often advertise for
workers by offering the minimum wage of about $100 a month, he
said. Then they take away half or more by "fining" the workers for
making mistakes in production. Usually the women live and work in
the same building; they are sometimes held in virtual bondage by
their employer. In the southeastern city of Fuzhou last January
(1994), a woman suspected of stealing a pair of shoes from her
employer, Yungqi Shoe Ltd., a Taiwanese venture, was tied up,
beaten and locked in a cage with two large dogs.

The largest challenge to government policymakers, however, is to
hold back the catastrophic collapse of the state-owned factories
that represent the great bulk of China's jobs. Officials at all
levels are frantically looking for ways to help bankrupt factories
and marginalized workers. The A.C.F.T.U. is being mobilized to
conduct "political and ideological work" to ensure that the workers
remain "stable" in their attitudes. In Shanghai, where nearly 100
state-owned firms are losing money, city officials are requiring
each municipal department to "adopt" one or two failing companies
and make them profitable within six months. Firms that cannot be
turned around will be merged with successful companies, auctioned
off or, as a last resort, forced into bankruptcy.

For those who lose their jobs, more and more cities are setting up
unemployment-benefits programs based on employer contributions. The
Labour Ministry say some 500,000 companies now participate in such
undertakings. The city of Beijing will start offering benefits in
July (1994). "From now on the jobless will no longer feel anxiety
over their declining income", Liu Zhihua, chief of Beijing's Labour
Bureau, told the Beijing YOUTH NEWS. Well, they might feel a
little, since benefits start at just $17 a month.

The government is trying to address other complaints. It has told
factory supervisors to improve working conditions and has conducted
a nationwide inspection to check whether child-labour laws are
violated and to inspect contracts, wages, working hours, insurance
and welfare programs for workers. In the vanguard of these efforts
are the leaders of the A.C.F.T.U., who are trying to shake off
their image as Establishment toadies and forge better relations
with workers.

Despite such efforts, none of the palliatives is likely to have
much effect on a work force that is suffering from rising anger and
alienation. "Workers feel betrayed", says an Asian economist based
in Beijing. A survey conducted two years ago (1992) by the
A.C.F.T.U. among 210,000 labourers at 400 state enterprises in 17
cities found that only 12% of workers felt satisfied with their
condition, while 51% thought their status in society had fallen to
an all-time low.

Morale has only deteriorated further since then, opening
opportunities -and hazards - for a new generation of independent
labour organizers. In late February (1994), two of those activists,
law student Wang Jiaqi and Beijing University law professor Yuan
Hongbing, wrote the founding chart for a new free trade union,
called the League for the Protection of Working People's Rights.
Yuan and Wang were arrested March 2; Wang later escaped and is now
in the U.S. The labour chart was presented to the Ministry of Civil
Affairs March 9 by a third dissident, Liu NianChun, a veteran of
the 1979 Democracy Wall protests. He too was arrested. Since then,
more than two dozen others have been detained for labour agitation.

Like most communist states, China has always had an allergy to
independent labour organizations. David Bachman, chair of the China
Studies program at the U.S.'s University of Washington, points out
that labour activists were singled out for repression during the
1979 Democracy Wall outbreak and again at Tiananmen Square.

As in the past, says Bachman, "the agents of coercion seem to be
doing their job". But how long can they keep the pot from boiling
over? "In a society where there are mechanisms for reconciliation",
says Han Dongfang, "there can be a balance of various interests.
But in China that mechanism doesn't exist. And the state is
confused about its role." The result is a building of tensions.
"The government has a choice", says Robin Munro, the Hong Kong
director of Human Rights Watch/Asia. "It can try to keep the lid on
by arresting more dissidents and wait for it to blow. Or it can
take a brave step and offer workers a controlled way to issue their

Either way, those demands will not disappear. Han claims that there
are now secret cells of labour activists in most of China's major
cities who give wide circulation to his CHINA LABOUR BULLETIN 
-banned on the mainland as "subversive"- and who are playing a key
role in the outbreak of wildcat strikes and protests. "How much
pressure can the labourers endure?" asks the dissident. "Things can
explode at any time". And the government seems all too aware that
the fuse is burning.

-----------Reported by David Aikman/Washington, John Colmey/Hong
Kong, Jaime A. FlorCruz/Beijing and Mia Turner/Shenyang---------
-------------------------------end---time magazine--------------

RRojas Research Unit/1996
The Globe and Mail                      Friday, July 18, 1997


Disgruntled workers angry over shutdown of state factories

        By  Rod Mickleburgh
        China Bureau

An escalation in public protests against deteriorating working and
living conditions has begun to alarm China's leaders.

The latest serious outbreak occurred this month in the southwestern

city of Mianyang, where thousands of angry workers confronted po-
lice in demonstrations over the closing of their factories.

A police crackdown injured scores of workers and several dozen
were arrested, according to reports by a local dissident, Li Bifeng.

One official acknowledged that "several big state-owned enterprises
have declared bankruptcy and the workers and their families
launched the protests so that they can ensure a basic standard of liv-

The Mianyang melees followed a provocative protest last month by
more than 100 Beijing residents outside the city's high-walled
Zhongnanhai compound, where many of China's top leaders live.
The residents were protesting against the demolition of their homes
and the failure to provide them with promised new accommodation.

A more dramatic disturbance took place several months earlier in the
city of Nanchong, not too far from Mianyang in the province of Si-

chuan. There, an estimated 20,000 workers besieged the city hall for
30 hours, demanding back pay from their failing factories.

On that occasion, authorities gave in. Loans were arranged, allowing
workers to be paid for the first time in six months.

Disgruntled workers have been blamed for a bomb explosion on a
Beijing bus the same month.

"These are more than isolated incidents," a Western diplomat said
yesterday. "I believe Chinese authorities are very worried about
them, and they are going to be more worried, because I think it's go-
ing to get worse.

"You have to assume there are already a lot more of these happen-
ings than we know about."

While issues such as forced resettlement, environmental degradation
and poor housing have prompted many protests, the disturbances
most unsettling to Chinese leaders are undoubtedly those involving
workers, like those in Sichuan.

Indeed, it could be said that the Chinese Communist Party's greatest
fear these days is the very working class it still claims is running the

According to a published report, public security chief Tao Siju
warned recently that strikes, collective protests, petitions and dem-
onstrations were "gravely disrupting public order," adding that all
disturbances, no matter the cause, had to be "handled firmly . . .
[with] no compromise."

Since coming to power in 1949, the Chinese Communist Party has
crushed all attempts to establish independent, non-communist trade
unions, with harsh sentences handed out to individual labour dissi-

A front-page article in the state-owned newspaper China Daily yes-
terday provided a good example of the Chinese government's hostile
attitude toward worker power.

The article criticized "radical unionists" in Hong Kong for sponsor-
ing legislation that would give unions there the right to bargain col-
lectively for their wages and working conditions.

"The government and many legislators worry that this may create la-
bour confrontations and scare away investors," the article said. "The
politicization of trade unions is also possible."

The apparent rising tide of worker discontent in China comes at a
time of growing economic dislocation.

The "iron rice bowl" that once guaranteed Chinese workers a life-
time of employment has long since cracked, as the country embraces
economic reforms.

China's official urban-unemployment rate hovers around 3 per cent,
but many economists believe the real figure is at least twice as high.
That would mean more than 10 million workers are currently unem-
ployed, with only meagre social benefits on which to rely. Many
more workers are hanging on to jobs in unproductive factories kept
afloat only by large bank loans and a whittling of their pay.

The prime culprit is China's vast stable of creaking state-owned en-
terprises, which continue to employ more than 100 million workers.
More than half lose money, many are idle and they are a steadily in-
creasing drain on the national treasury.

Yet Chinese leaders have until now been reluctant to accelerate the
pace of bankruptcies because of fears of mass social unrest from
sudden, widespread unemployment.

Lately, however, there have been signs of renewed determination to
confront the problem, regardless of the social cost.

"The government just can't keep pouring money in. It's a black hole,"
the Western diplomat said. "One of their economists told me the
other day their three top issues these days are the reform of state-
owned enterprises, state-owned enterprise reform and reforming
state-owned enterprises."

The diplomat said there are also indications the overall economy is
slowing down. "What you can conclude from all of this is that Chi-
nese workers are not going to be happy, and the government is very
concerned about maintaining stability."

In Mianyang, the trouble appeared to have been caused by the sud-
den bankruptcy of three state-run silk and textile factories.

Workers, who accused factory managers of embezzling their unem-
ployment-relief money, took to the streets, according to Mr. Li's re-

The police crackdown a week ago injured more than 100 workers,
while more than 80 were arrested, he said.

"At present, Mianyang is still under strict police control and many of
the detained workers remain in custody."

A city official, denying much of Mr. Li's report, told Reuters News
Agency that only "one or two" people were arrested for pasting up
"big-character posters" and stirring up the crowd.

"The rest were dispersed and no workers were injured."


Defend The Workers Rights to Work And Rights of Survival

We strongly protest against the Sichuan Provincial Government for its 
harsh suppression of workers in Mianyang, Sichuan, for their
demonstration on July 10, 1997 against corruption and lack of
unemployment benefits.

The working class creates wealth for enterprises in particular, and the
country in general. They should have a say in enterprises' management and
its implementation. Moreover, they have the right to protect their
livelihood. Workers in the Mianyang Silk Spinning Factory, a state-owned
enterprise, were entitled to enjoy unemployment benefits which was owed to
them after the closure of the factories. Workers should be consulted on
the remedial measures after closure but it was not the case. 

As corruption among government officials is serious, workers could not
enjoy such minimum protection for their livelihood. It was an act of 
disregard for workers' lives and of deprivation of workers right of 
survival and right to work. Workers were forced to defend their rights
by organising a demonstration against the corruption of government 
officials and their violation of workers' rights.

However, the local authorities did not listen to the workers. Instead,
they suppressed the demonstration by the use of police force and imposed
a curfew. Many workers were beaten and some of them were arrested.
The police even stopped medical personnel from caring for the wounded.
The demonstration was later identified as "riot" which reminded people 
of the same incident in Tiananmen Square in Beijing in May 1989. We are
angry that the Mianyang Daily, a local official newspaper condemned the
demonstration as riot provoked by foreign powers and local opposition.
The whole of Mianyang City has been patrolled by police to make sure no
more demonstrations occur. White terrorism reigns!

In fact, this is not an isolated case. In March this year, more than
20,000 workers joined a demonstration in Namchung, Sichuan against
arrears in wage. Although wages were paid back later, several workers
were arrested.

On June 14, 1997, twelve workers' representatives were arrested for
organising a demonstration in Chengdu, Sichuan against serious
unemployment, mass lay- offs and exploitation of workers. The Chinese
authorities not only neglect the interests of workers, but brutally
attack any collective action by workers.

We strongly believe that strikes and demonstrations are the basic right
of workers. They are also stated clearly in the Chinese Constitution,
demonstration for workers is not only for their survival, but also a way
to act as masters of the country and to practice their civil liberty.

The official trade union of the Mianyang City ( Mianyang Federation of
Trade Unions) also stood with the local authority, rather than with the
oppressed workers. In an interview with the press, the trade union
openly defended the government's brutal oppression. They claimed that
workers' interests had been fully protected. This clearly shows the
tight control of the trade union by the government. The official trade
union can not represent workers and can not serve as a voice for
workers. Under the Chinese Trade Union law, the freedom of association
is denied. Freedom of association is repressed even though it is
stipulated by the Constitution.

The Trade Union Law states that workers can only be allowed to join an
official trade union which is an apparatus of the Communist Party.
Without the right to organise independent trade unions, workers lose a
weapon for defending their rights.

 We hereby strongly demand that the Chinese Government should:

1. Stop oppression of workers immediately;
2. Investigate the case and reveal the true story, and should prosecute
the oppressors and other government officials who are held responsible
for causing this incident;
3. Release all workers and provide the wounded appropriate medical care
and compensation;
4. Release unemployment benefits to workers as soon as possible and
negotiate with workers about the remedial measures for the closure;
5. Repeal the regulations which restrict the freedom of organisation of
independent trade unions


Hong Kong Christian Industrial Committee
Hong Kong Confederation of Trade Unions
Neighborhood and Workers' Service Center
April Fifth Action
Don't Forget June Fourth
Asia Monitor Resource Center

APEC Labour Rights Monitor

ALARM serves as central monitor and coordinator of Asian labour action
alerts on behalf of the Asia Monitor Resource Center (AMRC), Asian Migrant
Centre (AMC), Asia Pacific Workers Solidarity Links (APWSL) and Committee
for Asian Women (CAW). Please send your labour alerts to the above address
or by fax or email.

---- End Included Message ----


Dear Comrades,

We've just participated in the first planning meeting for a public
education and action campaign to coincide with the big World Bank/IMF
meeting in Hong Kong on September 15th-26th this year. Over 180 finance
ministers and 2000 reporters will converge on Hong Kong for the official

In response a coalition of social activists, unionists, teachers, social
workers, writers and NGO workers called SOLIDARITY AGAINST THE WORLD
BANK/IMF has been formed to organise a campaign over the next two

The campaign is particularly important because the World Bank will
release two new reports during the Hong Kong meeting. The first report,
_China 2020_, will be released on September 16th. This report celebrates
the success of China's market reforms while demanding even more
deregulation and privatisation over the next two decades. The widespread
privatisation of state- owned enterprises in China in 1997 alone will
see 50 million workers laid off. At the same time, the social security
system  is being commercialised and privatised, and migration from
villages to the cities is being encouraged as the solution to growing
unemployment! There are already 100 million *floating* migrant workers
looking for work!

These neoliberal policies are underpinned by the fact that China is now
the World Bank's BIGGEST DEBTOR, and many of the reforms being imposed
on workers this year (including privatisation, the dismantling of the
social security system, and the end of job security) conform to the
specific demands made by the World Bank in its report on China last year.
(Of course we aren't arguing that the WB/IMF forced the Chinese
government to do this, but that there is a partnership of interests in
their neoliberal attack on the working class).

The second report to be released at the September meeting will deal with
poverty in East Asia. While arguing that poverty is increasing in East
Asia, the World Bank argues that effective poverty alleviation requires
even greater privatisation of social welfare and fails to recognise the
contribution of labour market deregulation and unemployment to this new

The campaign organised by SOLIDARITY AGAINST THE WORLD BANK/IMF will
also focus on Hong Kong. In the World Bank's celebration of the *East
Asian miracles*, the Bank has argued that structural adjustment was a
painless experience for workers. It is claimed that all of the workers
who lost jobs under the mass plant closures in the 1980s easily found
jobs in the service sector! The campaign will highlight the real crisis
faced by unemployed workers in Hong Kong, and the lack of income and job
security in the casualised service sector. This will link up with our
ongoing protest against the *freezing* of new labour laws in Hong Kong
(including the right to collective bargaining) by the government
last week.

Our activities will be based on the following:

For the campaign we'll produce an 8 page pamphlet on the impact of World
Bank/IMF development ideology and policies on workers, particularly in
China and Hong Kong. We'll also produce SOLIDARITY AGAINST THE WORLD
BANK/IMF posters for workplaces, NGO welfare centres, schools, and
public places.

On September 14th (the day before the World Bank/IMF meeting) a public
forum will be held to discuss the impact of neoliberalism and to
elaborate on the issues and problems outlined in the pamphlet. As part
of this forum, housing rights and right to livelihood groups will
organise a public exhibition concerning poverty in Hong Kong and China,
workers' support groups and unions will discuss unemployment and the
attack on job and income security, and other social action groups will
deal with the environment, education, etc. This forum will also provide
an important opportunity to discuss strategies for resistance (including
workers' resistance in China) and thinking about alternatives.

There will be an additional public forum on the night of September 16th
to discuss the report _China 2020_. A critical response to the report
will be released to the press and publicised in the local community on
September 17th.

Finally, on September 21st a demonstration will be held  to collectively
voice our protest at the World Bank/IMF. The demonstration will also
challenge the new restrictions on freedom of assembly and freedom of
expression, not only to demand the right to freedom of expression, but
to demand the right to freely express working class opinion about
unemployment, the lack of job and income security and growing poverty
in Hong Kong, and to support the tens of thousands of workers
throughout China who are protesting against mass retrenchments under
the new privatisation programme.

We'll produce 1000 copies of an 8-page pamphlet in Chinese (plus another
200 in English) and about 1000 posters.

It would be great if you could send us letters of solidarity during the
campaign! Please send messages to: Fax: 852 2454 6094 (Attention 
Au Loong Yu) or to email:

In solidarity,

Gerard Greenfield
Asia Monitor Resource Center
Hong Kong
RRojas Research Unit/1997