China's Communists Confront Conflict

Mass Industrial Disruption Threatens in China

LAST September the owner of the company Longmay, the biggest coal company in north east China, declared its plans to lay off 100,000 workers.  The disposal of 40% of the work force at 42 mines in four cities is the biggest cut anyone can remember in this distressed rust belt close to the Russian frontier.

 

In the past China has got away with mass layoffs in state-owned businesses such as Longmay before, usually by suppressing protests and giving payouts and offering job training. 

 

It was OK doing that when the Chinese economy was doing well, and could easily absorb displaced workers.  It's tougher now for the government to avoid labour troubles in depressed coal towns in the north east and other areas as the economy slows.

 

In November, the government of Heilongjiang Province, which owns the Longmay company announced a $600 million bailout that would help the company pay its bonds.  But analysts see the cash infusion as short-term relief that will only postpone the inevitable reckoning.

 

Last April, even before the layoffs were announced, thousands of workers marched in the streets of Hegang, a city of about one million, to protest delayed salaries.  The organisers were arrested and jailed.

 

In October, the company management stifled a protest by locking workers in the mines.  The police patrolled the streets outside the company headquarters on the day of the rally.  A few weeks later, Internet regulators exposed a group of workers discussing a demonstration on an online bulletin board.  They were all taken to the police station, fingerprinted and threatened with jail sentences if they were caught at it again.

 

It seems that Hegang is not the only place where industrial trouble threaten:  the number of strikes and labour protests nationwide in China almost doubled in the first 11months of last year.  Up to 2,354 compared with 1,207 in the same period of 2014 according to China Labour Bulletin, a monitoring group based in Hong Kong.  In November 2014 there was a record of 301 labour incidents.

 

This is of great concern to the Chinese Communist Party because it is suggested that the unwritten social compact in China is that the Communist Party delivers growth, jobs and higher living standards, and in exchange the workers acquiesce to the party's monopoly on power, surrendering the right to organise unions or protest.  It isthought that that deal could fall apart if workers no longer believe the government  is measuring up to its part of the bargain.

 

Javier C..Hernández in the International New York Times writes:

'As China's economy slows after more than two decades of breakneck growth, strikes and labour protests have erupted across the country.  Factories, mines and other businesses are withholding wages and benefits, laying off employees or shutting down altogether.  Worried about their prospects in a gloomy job market, workers are fighting back with unusual ferocity.'

 

Last week, hundreds if not thousands of employees of the Longmay Mining Group, the state owned enterprise, staged what has been described as 'one of the most politically daring over unpaid wages, denouncing the provincial governor as he and other senior leaders gathered for an annual meeting in Beijing.

 

In January, there were more than 500 protests.  More demonstrators have avoided political attacks and have focused on grievances like wage arrears, unpaid pension contributions and unsafe working contributions. 

 

President Xi Jinping, anxious about challenges to the Communist Party, has hit back with a big crackdown on protests, dismantling labour rights organisations and imprisoning activists. Yet at the same time his government is trying to placate the workers, putting pressure on businesses to settle disputes and making billions of dollars available for welfare payments and retraining programs. 

 

This is part of the paradox of the Chinese Communist Party which seems to be full of contradictions of this kind:  it still portrays itself as a socialist guardian of worker's rights as at the same time it embraces capitalism and welcomes tycoons into its ranks.

 

Now according to recent reports more than 30 million workers could lose their jobs in the next two years if the proposed cuts go through.  The government has already declared its plan to lay off 1.8 million steel and coal workers. 

 

Javier C..Hernández writes:  'Mr Xi is grappling with a labor force that is better informed and more easily organized because of social media, and also more assertive, in part because of grass-roots rights groups that have emerged..'

 

IN February, in the capital of Guangdong Province in southern China several hundred workers at the Angang Lianzhong steel plant went of strike last month in reply to a plan to cut wages by about half and to increase the working day to 12 hours for some workers.  The workers responded with the chant of 'Towards the sun, towards freedom!':  then chanting this World War II-era army song.

 

Guangdong, which manufactures much of the world's toys, shoes, clothes and furniture, has been a hotbed of worker discontent.  In recent months many foreign-invested companies have relocated to central China and South East Asia, where wages are mostly lower.  Some of these have moved without paying severance pay or pension payments, in violation of Chinese law. 

 

Protests are reported in every part of China, with labour trouble most heavy in manufacturing and construction industries, which account for two-thirds of the demonstrations.

 

Last year, most of the protests were against private employers.  Yet, the actions last week in Shuangyashan, a mining town near the Russian border in Heilongjiang Province, this according to Mr. Hernández, suggests that the 'unrest could spread to businesses owned by the government if Mr. Xi pushes ahead with efforts to overhaul the economy by reining in state industries'.

 

After the provincial governor of Shuangyashan in North East China held up the company of Longmay as an example of how the state could successfully restructure the nationalised enterprises without hurting the workers. He made this claim during the annual session of China's legistlature, the National People's Congress.

 

In spite of all the unrest there is as yet no sign of the rise of a national labour movement.  The authorities have worked hard to prevent workers from joining forces.  The Chinese government prohibits workers from setting up independent trade unions, and insists that they join the All-China Federation of Trade Unions, which is controlled by the Communist Party.

 

At the same time the authorities block social media, shutting down the accounts of labour activists, deleting news reports of strikes, and monitoring chat forums for signs of collective action.  In December, the authorities arrested Zeng Feiyang, one of China's most prominent labour organisers, accusing him of 'gathering a crowd to disturb social order .'  Three other activists were detained as well.

 

Mr. Zeng, 41, had organised successful campaigns against influential factories and stae-owned companies in Guagdong and tutored a generation of labour activists.  After his arrest, state media began a smear campaign accusing him of hiring prostitutes, stealing from workers and conspiring with hostile foreign forces.

 

Recently another labour activist, Wu Guijun, in nearby Shenzhen, said he had started warning workers against holding demonstrations, as he fears that they might be arrested as well.