Chinese workers grow restless: Push for economic efficiency leaves millions jobless and brings fears of social instability

ON MOST DAYS a 27-year-old man selling cheap leather belts and hair-slides sits by the road outside my window. Six months ago Xiao Li was a mechanic at a state-owned factory in Peking making electronics spare parts. Then the factory cut his salary by 30 per cent. Two months later, it stopped paying him altogether and told him he could stay at home.

Since then, Xiao Li (not his real name) and most of his former colleagues have received no salary and no welfare or medical benefits, though they still have state-provided housing. 'The workers are unhappy, yes. What can we do? We have no alternatives,' he says. 'Our trade unions cannot represent the workers' interests at all.'

For Xiao Li and his friends, this represents a huge departure from the guaranteed cradle-to-grave 'iron rice bowl' employment and welfare package that China's workers once relied on. The electronics spare parts factory has virtually stopped production because, like many of China's moribund and inefficient state enterprises, its products could not compete with foreign imports and rival products from modern factories in the south of China. Its workers, although still officially employed by the factory, are eking out a living by hawking goods or repairing bicycles.

The Chinese government is terrified that the existence of millions of people like Xiao Li is a threat to social stability. China has the world's fastest- growing economy but half of the country's state enterprises are losing money. Millions of factory workers are owed wages or are not being paid at all, safety and work conditions can be abysmal, and strikes and labour disruptions are becoming increasingly common as workers vent their anger.

No wonder the government's May Day message this year to the masses warned: 'It is inevitable that the working class should have to make sacrifices', and that workers must 'take into account the general interest of the country first'.

The overall unemployment figures are hard to establish. Officially, urban unemployment is more than 5 million but this does not take into account the estimated 30 million who have nothing or little to do at their work units. The rural situation is equally alarming. Over the past five years, it is estimated that between 60 and 90 million people have moved from the countryside to urban areas to find work. The majority do find jobs, often in the coastal development areas or on labour sites in the cities, but unknown millions remain idle in rural areas, or drift around the cities. Last month Li Boyong, the Minister of Labour, admitted: 'China's employment situation is extremely difficult, and the country faces unprecedented challenges in deploying the jobless.'

Social stability is now the government's priority, which is why China was unmoved by President Clinton's attempt to use trade sanctions to secure human rights. China's leaders have fresh memories of what happens when popular discontent boils over; next Friday is the fifth anniversary of the bloody army crackdown on the Tiananmen Square pro-democracy movement. But whereas in 1989, ordinary people focused on such everyday problems as inflation and official corruption, these days unemployment and workers' rights are the new stress points.

The government is taking no chances. In the past few months a number of leading independent trade union activists and lawyers have been arrested and are now awaiting trial. The names of Zhou Guoqiang, Yuan Hongbing and Wang Jiaqi are not widely known in the West but they and others have been involved in calls for the restoration of the right to strike and for the legalisation of independent workers' unions. Meanwhile Han Dongfang, the founder of China's first independent trade union, remains stranded in Hong Kong, denied access to the mainland even though there are no outstanding charges against him.

Over this sensitive anniversary period, factory officials have reportedly been put on 24-hour duty in case of strikes or disruptions. Workers are becoming bolder. According to official Chinese figures, more than 12,000 cases concerning labour disputes were taken to arbitration last year, an increase of about half on the previous years. Complaints are wide-ranging both in the ailing state industries and also the profitable foreign-funded factories in the booming south.

Those in the state sector want their wages. According to Han Dongfang's 'China Labour Bulletin', a trade union survey last year in the north- east province of Heilongjiang found that 2.66bn Renminbi (pounds 210m) was owed in wage arrears to mining, forestry and textile workers in 10 cities.

Working conditions in both state and joint ventures can be appalling. In the first 10 months of 1993 there were 65,000 deaths in industrial accidents. Over the same period there were 28,200 cases of industrial fire, killing 1,480 and injuring 51,340. Health and safety measures are rarely implemented.

In the joint venture and foreign factories in the coastal regions, workers get their wages but complain of 'sweatshop' conditions. In the past two years there have been 1,100 labour disputes, strikes and go-slows in the Shenzhen Special Economic Zone, almost all involving foreign-funded firms.

Strikes in state enterprises tend to be hushed up, but the Chinese government is more open about disputes in foreign-funded factories. Complaints filter out about conditions in some of the Taiwan and Hong Kong-run export-oriented manufacturing plants in south China, where staff are forced to work huge amounts of overtime to meet orders, locked in their workplaces, and offered little protection against industrial hazards. Last November, a fire at the Hong Kong joint venture Zhili toy factory in Shenzhen killed 84 workers who were locked into their dormitories. This month the government announced that foreign-funded enterprises will also have to be unionised under the government-run All-China Federation of Trade Unions (ACFTU). But it will not countenance any independent workers' representation. The Communist Party is wary of a Polish-style Solidarity movement emerging. Last week an anonymous Chinese official even suggested that the presence of the quietly spoken Han Dongfang in Hong Kong was tantamount to turning the colony into 'a pioneeering battleground for subverting China'. He told a local newspaper: 'It would be very interesting to know how Britain would react if we were to deploy thousands of IRA in Shenzhen.'

(Photograph omitted)