Chinese workers sold short by the state defy military police to launch protests

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Military police moved to quell massive protests in two Chinese cities yesterday, capping a bitter struggle likely to repeat itself across this vast and troubled nation.

Military police moved to quell massive protests in two Chinese cities yesterday, capping a bitter struggle likely to repeat itself across this vast and troubled nation.

For more than a fortnight, tens of thousands of angry workers, denied severance pay and pensions, have gathered in scenes of mass defiance rarely seen in China since the 1989 Tiananmen Square demonstrations for democracy.

While the bloodshed of that year has been avoided so far, the official response has been no less predictable. In Liaoyang city, 370 miles north-east of Beijing in Liaoning province, four labour activists, all in their 50s, have been detained without charge or trial. In Daqing, also in north-east China, military police were deployed yesterday to quash dissent in a city once acclaimed as a model of Maoism. "We may be arrested, but we are not afraid," Yao Da, the daughter of Yao Fuxin, one of Liaoyang's detained protest leaders, told Agence France-Presse news agency. "Many of us have nothing to eat and the government refuses to address our demands, so there is nothing left for us to do but to take to the streets."

While the protesters' main complaints involve poor treatment suffered by workers laid off by Liaoyang's bankrupt Ferroalloy Factory, and Daqing's giant PetroChina parent, their numbers are swelled by fellow losers in Communist China's rush to embrace capitalism.

North-east China, once the industrial pride and joy of Chairman Mao's attempt to overtake the West, is today better known as the rust belt depository of too many ill- conceived central plans. In 1986 Liaoning's provincial capital, Shenyang, was host to China's first bankruptcy since the Communist victory of 1949, but caution has reigned ever since. Recent, painful efforts to speed the reform of ailing state-owned enterprises have met stiff resistance from workers long accustomed to the "iron rice bowl" of jobs for life.

This week, protesters held Chairman Mao's portrait aloft, yet the egalitarian ideals he claimed to represent cut little ice in contemporary China. His successors in Beijing still dread and manipulate the will of the people, but they have done their deal with the Western devil and signed up to the World Trade Organisation. This capitalist pact obliges Beijing to expose its most prized and protected industries to global competition. Grossly inefficient, Liaoyang and Daqing stand first in the firing line.

Whitehall is spending £20m on a three-year Department for International Development project to use the lessons of British capitalism to transform Liaoning's troubled state-owned firms. It is the largest bilateral initiative yet in an area critical to China's economic future and political stability. For decades, state ownership of the means of production ensured strict party control but ignored economic reality.

Adapting enterprises to run on competitive, commercial principles remains one of the sternest tests of Beijing's ability to change its spots. For now, the authorities resort to the familiar levers of oppression. In a land denied independent trade unions, this week's protests have been declared illegal, and their organisers branded as troublemakers. The climate of fear is such that witnesses and fellow protesters offer little more than their surnames. Typically, the foreign media is also being blamed for "stirring things up", yet every indication suggests this drama will run and run.

In isolated yet frequent incidents, workers and peasants have been besieging government offices to protest against redundancies, late salary payments, corruption, excessive taxation and other grievances. The fear of organised movements similar to Poland's Solidarity ensures that trade unions remain mere extensions of party control. The odds are still stacked against any individual who rocks the boat. But one day, just maybe, the force of numbers may count.

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