Accueil > 08- Livre Huit : ACTUALITE DE LA LUTTE DES CLASSES > Workers struggles in China, 2009

Workers struggles in China, 2009

mercredi 29 avril 2009, par Robert Paris

A look behind the struggles of Baoding textile workers (Yimian Group)

Fri, 24 Apr 2009.
“Ever since capital arrived in the world, it is filled with blood and filth” – K. Marx

Liang Wendao,

This article is written based on the data gathered on the internet on the topics of “workers from Yimian on strike to protect their factory”, “Hong Kong Strategic Holdings Ltd” and “Reconstruction of the Baoding Train-station”. Unfortunately since it is not possible to contact the workers of Yimian directly, and due to limitations of ability and time, the content and views of this article are largely based on existing data on the event and logical deductions made from them, so a lot of the details cannot be confirmed. Therefore this author cannot state that the article completely and genuinely reflects the entire event, but it is safe to say that it won’t be far from the truth. It is hoped that when the readers finish the article they will have the same kind of feelings as the author : The Working Class of Baoding, We are fighting together with you !

Exposed : the fake skin of Hong Kong Strategic Holdings Ltd

“In this gamble(speculation), little fishes are engulfed by sharks, and sheep are engulfed by the wolves of the trading centres.” – K. Marx

After the occurrance of this “strike incident at Yimian” the press both within China and abroad immediately showed immense interest. But the behaviour of the parent company of Yimian - China Strategic Holdings Ltd (SH Ltd/Hong Kong) was very strange indeed. Openly it showed no consideration at all, it neither attempted to respond to the accusations nor sent its management to calm the workers down. The only thing we see is that the management layer led by Wang Lijuan and the Baoding city government were extreme busy and tried numerous ways, perhaps including back-stage deals made between SH Ltd and government officials above and below.

Without an understand of the history of SH Ltd, we would not know the essence of this event. In the 1990s the No. 2 heir of the Jinguang Group in Indonesia, a 2nd generation Indonesian Chinese, Huang Hongnian, bought a Japanese trading company in Hong Kong and created SH Ltd. In the 1960s Huang Hongnian studied at the 26th Middle School in Beijing and was once a Red Guard who worked in the rural areas of Shanxi province. After returning to Indonesia he inherited his family’s wealth and went to the US to study. The person is very knowledgable about the conditions of mainland China and possesses a large number of personal connections there.

Apart from Jinguang Group which is the largest stockholder of SH Ltd, The Hutchinson Whampoa Property company of the wealthiest man in Hong Kong, Li Jiacheng, Morgan Stanley from the United States and the Itochu Corporation from Japan all hold consider amounts of stock within SH Ltd. Since the 1990s and the initial formation of SH Ltd, it has engaged in the purchasing of state-owned enterprises (SOEs) from mainland China. The usual methods are to buy 51% or more of the stock of a SOE at a low price, and then “re-package” the bought enterprises before placing them on the overseas market or selling them directly to other multi-national corporations in order to receive huge amounts of profits.

In the mid-1990s, SH Ltd was quite famous, and was praised by the government and the mainstream media as the “shining example of SOEs attracting foreign investment”. Within 2 years SH Ltd bought 300 or so SOEs. In 1994 SH Ltd bought Beijing Beer Factory, and in less than 2 years time, it was sold to the Asahi Beer Corporation of Japan and became the “Beijing Asahi Beer Corporation”. One of the main stockholders of SH Ltd - Itochu Corporation of Japan, is also the parent corporation of Asahi Beer. Now all of the beer produced at Huairou in Beijing are actually beer made by the Beijing Asahi Beer Corporation. After this, SH Ltd managed to hold onto 51% of the stock for the Hangzhou Rubber Factory and 55% of the stock for the Taiyuan Double Happiness Company, and taking advantage of the differences between the accountancy regulations in China and the West, created a new “China Tire Holdings Corporation Ltd”. After this new company is placed onto the North American stock market its shares were sold to Western shareholders, enabling SH Ltd to acquire hundreds of millions of USD of profits.

In 1993, SH Ltd bought “en masse” 41 SOEs from Quanzhou and from these created the “Zhongqiao” Group. It promised to invest in 240 million RMB, but after just 2 years and a total invested amount of less than 20 million RMB, it sold the group to an ethnic Chinese enterprise in Malaysia, the “Falin Group”, for more than 200 million RMB, and from this acquired a profit of 200 million RMB. Of course the “Falin Group” is not all that benevolent either, after taking away most of the higher quality capitals from Zhongqiao (mostly land assets), in 2003 it declared that Zhongqiao could not be managed, and after 2 or 3 years of turmoil, in 2007 the Quanzhou city government had no choice but to re-nationalise Zhongqiao, but in reality at this point Zhongqiao is already bankrupt, and tens of thousands of employees were fired and became unemployed for several years. Just the amount of salaries, social securities and compensations that were withheld by Zhongqiao and never given to the entitled workers amount to tens of millions of RMB. Apart from Quanzhou, SH Ltd also attempted to purchase “en masse” dozens of SOEs in the city of Dalian, and this was also agreed to by the Dalian city government. However, due to various reasons this plan never came to fruition. Later on Huang Hongnian transferred some of the stocks of SH Ltd to Mr. Chen Guoqiang from the Mianxing Group in Hong Kong, and Mr. Chen is also a higher capable buyer of state-owned assets on the mainland, as well as being a good friend of Li Jiacheng, the richest man in Hong Kong. He now controls a series of enterprises in southern China, especially in the city of Shenzhen. In 2008 SH Ltd planned to purchase the middle-sized coal mines and related railways in Inner Mongolia owned by the China Railway Construction Group Corporation Ltd, and through manipulation of its own shares within the Hong Kong stock-market, managed to obtain a profit of tens of millions of HKD.

By now, everyone should understand that the “progressive strategies” of SH Ltd is simply to purchase SOEs at low prices and sell them at high ones. This is why after SH Ltd buys a SOE, it usually does not change the management layers of the ex-SOE, because it has no interests in actually running the company, and it is on the contrary easier to obtain profits by keeping the old bureaucrats in. In 2003, SH Ltd entered into negotiations with the state-capital assets committee of the city of Baoding, and afterwards through its company called “Asso Ltd” registered at the British Virgin Islands, it purchased Yimian Group in Baoding with a price of zero. “Asso Ltd” is an “empty shell” company that only has an official emblem and name, even on the Virgin Islands its registered address is probably only a postal box.

“Asso Ltd” promised at that time to invest 50 million USD in just 5 years, but this is no more than an empty promise, and is not even written into the written contract. But spokespeople from “Hong Kong Asso Ltd” stated that after purchasing Yimian, it will advance the level of the traditional manufacturing techniques using modern technology, re-organise the internal resources of Yimian, establish a well-constructed legal representative structure, and adopt scientific methods of encouraging work. It also stated that it will seperate out the good-quality capital assets from Yimian to establish itself onto the overseas stock-market, and with Yimian as the platform, purchase another 3 - 5 mainland Chinese textiles enterprises, and try to raise the trade volume of Yimian to 1.5 billion RMB within 5 years, so that Yimian becomes the “flagship enterprise” of the Chinese textiles industry. Yet since this promise was officially made in September 2005, it is still just an empty set of words hung on the official website “Window of Commerce in Baoding”.

According to the annual reports for the stockholders of SH Ltd in 2005, in November 2004 SH Ltd released a memo, the content being the plan of using 200 million HKD to purchase Asso Ltd’s released stocks and all of its sub-companies, including Yimian Group in Baoding itself. But since no formal contracts were signed before the official expiry date, the memo no longer has any legal status.

According to this report, from 2004 onwards SH Ltd has already decided to withdraw all of its financial links with Asso Ltd, and let it run as an independent entity. In fact, SH Ltd was even prepared to sacrifice Asso Ltd completely. Now we cannot say that right from the start of the purchase SH Ltd never intended to enact its promises, because the initial contract signed was fundamentally no different from the previous “China Tire Holdings Corporation Ltd”. Perhaps SH Ltd intended to purchase another 2 or 3 state-owned textile enterprises similar to Yimian in Baoding at a price of zero, and combine them together into an “Asian Textiles Group”, to be sold when the international stock markets are rapidly on the rise. This way the contract is nominally fulfilled, and hundreds of millions of USD can also be acquired. This is also why despite the repeated inquiries done by Yimian workers on why of the promised 50 million USD of investments, less than 10 million USD actually arrived after 5 years, and the management layer neither offered an explanation nor a solution, since the planned 50 million USD of investment was for 3-5 different purchased SOEs, and therefore the money for just Yimian itself is “already sufficient”. It is quite certain that the management layer of Yimian headed by Wang Lijuan is actually quite clear about the reality of the situation, and since the boss has changed, they must obey the new board of executives, not least because they now take salaries in USD from the new boss. This is also the reason for keeping the original management layers, on the surface there are no big changes and all of the original connections are still in place, but in reality the core has been completely transformed.

Yet “fate” it seems does not follow the will of man, in 2007 and 2008 the international “subprime mortgage bubble” bursted and the economic crisis arrived, the European and American stock markets were devastated. Within China since 2004 major discussions around MBO and the restructuring of SOEs began, and faced with more than 20 years of capitalist restoration, radical leftist ideas are beginning to make a come-back among the masses. The opportunities for “getting a free lunch” are diminishing more and more, and within the textiles industry competition is fierce. In 2007 the amount of tax returns for textile exports decreased, and all of the textiles enterprises lost a lot of their competitive power. In 2008 and 2009 there is also the “wind of crisis” around the entire globe. Faced with such dire circumstances, Asso Ltd (or Yimian) has neither the hope of being put onto the stock market nor the possibility of being sold off. Neither the buyer nor the management layer wants to really manage this enterprise. Therefore SH Ltd has decided to run away from the site as fast as possible. Now the only valuable asset left in Yimian is land itself.

Mass theft – the “mystery” of land in Baoding

“The premise of land ownership rights is such that some people monopolise a part of the earth, and establishes it as a territory in which only his own will is obeyed and all other people are rejected. Under such a premise, the key is to explain the economic value of such a kind of land monopolisation on the basis of capitalist production, i.e. how such a kind of monopolisation is realised on the basis of capitalist production... ...from the perspective of a higher-level socio-economic mode, for a few people to privately own land is as ridiculous as for an individual to privately own another person. —K.Marx

Before we return to the issue of the Yimian Group, let us first look at a few other cases. From May 2005, the workers from the Baoding Datang electrical factory repeatedly went to the local authorities to protest as their residences were being illegally taken down and corruption was wide-spread in the enterprise itself. In March 2009, the workers from the First Shoe Factory of Baoding went to the local authorities to protest as a result of being opposed to the plans of relocation of their residences due to the re-construction of the local canal system. We cannot describe these in any detail in this particular article, but it is sufficient to know that such cases are common in Baoding. So what is the secret of the land assets belonging to Yimian ?

According to the official website of the Hebei provincial government, the reconstruction and enlargement of the Baoding train station has began. The reconstructed train station is planned to take up an area of 82 acres, around 6 times that of the present train station. The total investment for this project is around 6.87 billion RMB. The new station will have a front entrance that faces westwards. At present 6 factory zones belonging to 3 different enterprises, amounting to some 14,000 square metres of housing and other structures, are already being dismantled. The Baihua market that has already been dismantled will be the location for the main square of the future train station.

The secrets of the land assets belonging to Yimian are to be found here. Yimian, or the First Cotton Factory, is a very old enterprise, its factory buildings and residences for workers are located on either side of Dongfeng Road and Xiangyang Avenue in western Baoding. From the present Baoding train station to the factory zones of Yimian is no more than a few kilometres of journey in a westward direction. From the rural trading markets at Baihua Road it is much closer to the location of Yimian still. Once the new train station and its main square are constructed and have the front entrance pointing in a westward direction, then the current location of Yimian would become a “platinum zone” where “each inch of land is worth an inch of gold”, since it would be so close to the new train station. According to internet sources, at the moment the average land usage fee in the urban areas of Baoding is around 1 million RMB per acre, and according to the official website of the Hebei provincial government, in the project transfer documents for Yimian published in 2003, before Yimian Group was sold off to Asso Ltd it had a total area of 497,412 square metres or around 750 acres, so even at the present land usage rates the land assets of Yimian would be worth 750 million RMB in total.

The SH Ltd only invested in 70 million RMB at most, but if the land assets can be sold than at least 700 million RMB can be acquired. Of course SH Ltd would not be able to get all of that, but most of it would no doubt go to SH Ltd. If SH Ltd waits for the land usage rates to go up, it might acquire a profit margin several times 700 million RMB. If they don’t sell the land assets but dismantle Yimian completely to build commercial shopping centres and private accomodation, then the amount of profits gained might be dozens of times more than 700 million RMB. From this we might even estimate that SH Ltd would be happier if the production at Yimian becomes more difficult to continue, so that they can sell-off or dismantle it in a more straight-forward manner. To make it appear that all possibilities are considered, the management layer of Yimian actually proposed a potential plan to “retreat to the city sub-urbs”, but rather than Yimian being responsible for the relocation of all of its employees itself as it should be the case, it is just a scheme to sell-off the “high quality capital assets” of the company to another SOE “Zhongfang”, so “Zhongfang” would be responsible for the relocation of the hundreds of employees of Yimian.

The SH Ltd has no real intention to engage in the textiles industry at all, and since it plans to retreat and sell-off the land assets, the best way to do so would be to process away the fixed capital assets and facilities at Yimian, worth tens of millions of RMB, as simple industrial waste. This way “Zhongfang” would get quite a lot of things very cheaply, and it will perhaps even take part in some of the economic benefits when the Yimian land assets are sold-off in the future. To nominally take responsibility for several hundred workers would just become a “hand-waving ceremony” for “Zhongfang”. After 4 years, a minority of Yimian workers and facilities would again become a part of a SOE. From this one would certainly have sufficient justification to ask the state-capital assets committee at Baoding : if this is to be the final outcome, why didn’t the government assign Yimian to “Zhongfang” 4 years ago straight-away ? This way the re-location of all land assets, factory buildings, facilities and employees would be conducted by “Zhongfang”, wouldn’t this be the easier and more cost-effective option since both companies are SOEs ? This way how could nearly 10,000 employees be laid out in two waves during these last 4 years ? How could hundreds of millions of state assets being stolen away so easily ?

Another strange thing is that the state-capital assets committee of Baoding must have known about the plans to expand the train station in 4 years time, since a huge reconstruction project taking up 82 acres of land and costing 6.87 billion RMB of funding certainly could not just be a short-term response towards the recent economic crisis, but a relatively long-term plan. As long as the land assets of Yimian are still there, just selling off the land could enable the corporate owners to receive hundreds of millions RMB, so how could it be that Yimian was sold-off to foreign capitalists who had absolutely no prior experience in the textiles industry in the name of “mismanagement” ? The real answers to these questions are not really hard to come by at all, they are all based on the private interests of SH Ltd and some people in Baoding itself. Yet in all of these considerations the interests of the 10,000 or so workers at Yimian are never considered, and the interests of the Chinese people are never considered either.

Of course, the secrets of the land assets of Yimian don’t just stop here. After the 1949 revolution, under the Maoist planned economy, “to have the factory as one’s home” is certainly not just an empty slogan. Up to the 1990s and the complete domination of the neo-liberal market economy in China, most of the large and medium-sized SOEs in urban areas are usually a combination of factory zones, administration zones and residential zones for the workers of the particular SOEs or “work-units”, and the older and grander the enterprise, the more so this is the case. Accompanying this is the clear consciousness of people belonging to particular “work-units”, that is to say, they consider themselves to be part of certain collectives, rather than atomised individuals, and this consciousness is present not only among the workers themselves but also their families and children. The inter-personal relationships between people also begin from acknowledging the “LOGOs” of their respective “work-units”.

In the past this was certainly the case for Yimian, the First Cotton Factory, considered to be the best SOE in the western sub-urban region of Baoding. Around the factory zones on either side of Xiangyang Avenue and Dongfeng Road are spread a vast area of residential zones for Yimian workers. Tens of thousands of people link up their fate with their factory over the period of dozens of years. For some families two or three generations of people work in the same factory, and are proud of this fact. As a good example of a “mini-society” within the SOE during the era of the Maoist planned economy, Yimian used to have its own electricity generation facilities, its own technical colleges, hospitals, secondary schools, primary schools and even nurseries. A Yimian worker could be born in the Yimian hospital, get educated in the Yimian nurseries and schools, graduate from the Yimian technical colleges, work in the Yimian factories, and finally rest in peace inside Yimian hospital.

His or her entire life would be completely connected with the Yimian enterprise, and every step of his or her life-path would be stamped on with the logo of Yimian. Here we shall not discuss whether or not this kind of thing is correct intrinsically, but certain in practice for tens of millions of Chinese workers, this scenario is a fact of their life. For them, the “enterprise” is also the “home”, “the factory is the home, and the home is the factory”. To lose their factory is to in some ways to erase the most distinguished phases of their lives, and to destroy the meaning of their existences as “social man”.

This is even more so the case for the “best factory in the western sub-urban region of Baoding”, the Yimian Group that was once written into secondary school textbooks and glorified as the “great factory of Ma Enhua”. This is testified by the fact that after hearing that the “Yimian of Baoding would be no more”, a large number of citizens from Baoding and the surrounding regions travelled to the site by vehicle transport to offer their sincere lamentations. For ex-Yimian workers who now have to work more than 10 hours a time and look after two or three assembly lines simultaneously, for ex-Yimian workers who now have to survive on selling trinkets by the roadside and wade through refuse, the total disappearance of the last remaining vestiges of Yimian, is like the complete collapse of the last remanents of their psychological pillars at the depths of their minds. They would no longer belong to a collective with an illustrous history, now they are just one after another scattered individuals who are “weak”, in other words they are no longer anything substantial anymore.

According to records, the old factory zones of Yimian were mixed together with residential zones, as well as numerous supplementary facilities. Generally speaking it would take more than an hour to walk across the entire Yimian region. Apart from the 750 acres of Yimian land that were sold-off to SH Ltd, the residential areas for more than 10,000 Yimian workers (these were privatised prior to the selling-off of Yimian, so are not counted as a part of the 750 acres of Yimian land assets) would take up an even great area of land. This is another huge amount of wealth in itself.

Judging from historical experience, for property developers that can “reach up to the sky”, to dismantle the atomised residences of grass-roots masses would be as simple as toppling a dead and dry tree. As long as the Yimian logo no longer exists, as long as they can completely empty out Yimian, then the ex-workers of Yimian would no longer have anything to rely on. The mutual identification among former residents would gradually fade away, and by then through methods of terror, offering incentives and divide-and-rule, it would be very easy to take down the living quarters of a few unemployed workers. At the moment there is already a lot of dissent over the forced dismantling of old buildings near the Western Garden zones next to the train station, the forcefully relocated people compare the violent relocation of themselves to the actions of “feudal” and “fascist” governments, and slogans of protest are put up on the entrance and exit passages of the train station itself. After the residential zone of the Baoding Datang Electrical Factory was dismantled in 2005, the workers still have not received any kind of proper relocation. In a city with extremely high housing rents, how could these forcefully relocated unemployed workers find a place to call home ?

From all these considerations we’ve made so far it should be easy for the reader to understand that the Yimian workers are not only consciously or unconsciously protecting their factory, even more so they are protecting their very homes. They are not just protecting their own “little homes”, but also the “great homes” of the tens of thousands of residents in Baoding at large. As long as the factory at Yimian exist, the 10,000 workers of Yimian would have some kind of symbol for solidarity and co-operation. This would also mean that the giant projects for the dismantling of residential housing in the surrounding areas would not be able to go ahead in any smooth way, since the great Yimian factory zones are effectively in the way of their schemes. But if the existing remanents of Yimian completely fade away materially and spiritually, then the lost souls of the ex-workers and their relatives would have no choice but to go their seperate ways. By then, it might even be the case that under the hypocritical great banner of “reconstruction of the old city to benefit the nation and the people”, the people of western Baoding would fall into immense sufferings so that a few individuals could plunder at will.

At this point we should remind people to re-read this passage from the ancient Chinese text Guoyu. Nearly 3000 years ago, the king of China, King Li of Zhou, liked to “monopolise benefits”. This king who “guarded against the speech of his own people more than he did against floods”, wanted to take the natural products of the regions for himself rather than sharing them with the people. (According to modern Marxist analysis, this was in the very early feudal epoch of China when the class society was not well-established and there were still significant elements of “primitive communism” in the sense that a lot of the “natural products” of the land, like animals and plants, belonged to everyone for free rather than just to the king and the ruling class) One of his ministers rebuked the king : “These beneficial products are created by Nature and contained within Heaven and Earth. Everyone should be able to partake in them, so how could you monopolise everything ? Even if an ordinary man does such a thing, the public will name him as a plunderer. If the king of the country does such a thing, very few people will support you politically. But the king did not listen to this advice. Three years later, the king was forced to abdicate and was sent away to the city of Zhi.” This was the first documented class struggle in Chinese history. It occurred in 841 BCE.

Determined Struggle – “The Fighting Songs of the Working Class”

Strikes are the military academies of the working class, they are trained here and are prepared here to enter the unavoidable great struggles of the future ; Strikes are declarations of the various sections of the working class declaring themselves to be a part of the great workers’ movement. — F. Engels

Under the banners of “reform and opening-up” of capitalist restoration, in the last 30 years or so the “market chariot” of neo-liberalism seemed to have the ability to run-over everything. Sometimes I think how our descendants would think of us : capital assets measured in the thousands or tens of thousands of billions RMB, and the fruits of labour made by hundreds of millions of people over decades are being totally shamelessly engulfed by speculators, and tens of millions of ordinary people are placed under heavy exploitation. Yet despite all of this over the last period most of us have said nothing, and have acted like lame sheep waiting to be slaughtered. Indeed, how could such things be described just by the word “shameless” ?

We should thank the working class of Yimian, for without their diligent struggles, another great banquet in which state-owned assets and people’s wealth are taken-over would successfully conclude. These workers blew the horns of fight-back, and their struggles have paved the way for the ordinary people and the working class to self-organise and attack privatisation from below.

(All of the information listed below originate online, including websites like Tianya and “the Windows of Baoding”. These sources cannot be independently verified but should be largely accurate with respect to the original events. Therefore all of them are included below)

Since the Spring Festival period at the start of February this year, when the management layers of Yimian Group sent out the signal to sell-off their factories, the workers and retired ex-workers of Yimian have already begun the plans for fight-back. Starting from early March, one could see a few public letters written by workers on websites and forums. From the content of these open letters one could deduce that they are the product of careful preparation and discussion. These letters contained several key issues : the promised 50 million USD of investment by SH Ltd, the pensions and social securities that the enterprise has failed to pay for the workers over the last 4 years, the un-paid compensations for the thousands of laid-off workers in 2004, the tens of millions RMB of savings made by workers in the past that were appropriated, as well as personal problems of the manager Wang Lijuan herself. Yet unfortunately workers have not put the land issue into the open letters, perhaps because they are worried about the possible consequences, or maybe they thought in practice the land would belong to either the capitalists or the bureaucrats, and the workers cannot receive benefits from them either way. Yet they do not realise that as long as Yimian can be kept, just the current values of the land assets of the factory zones would be sufficient for all Yimian workers to receive their pensions, and they could also sue SH Ltd for breaking their initial promises as well as stealing fragmentary assets (small parcels of Yimian land and storehouse goods) from the enterprise. (This will also touch on the savings of the workers that were taken away)

Some people with ulterior motives declare online that the 2000 RMB put into the savings sum by every worker weren’t really savings but just stocks workers put in following the enterprise’s re-construction, and therefore should rise and fall in actual value following the profit margins of the enterprise, and earnings cannot be guaranteed. Even if this were the case, then these workers should still be considered as small shareholders of the reconstructed Yimian Group. At a rate of 2600 RMB per share, the Yimian workers possess a stock value amounting to tens of millions of RMB. In 2004, the state-capital assets committee of Baoding declared that Yimian’s existence as a SOE is a mistake, and that it should become a stock-based company in which state-owned stock are the majority and employee-owned stock are the minority. Under the circumstances in which no small shareholders are given any say in the matter, (during the reconstruction process in 2004 the conference for all shareholders held no elections, and even the conference for employee’s representatives was plagued by underhanded deals, including counting vacant votes from uncertain sources as affirmative votes) the state-capital assets committee actually dared to give Yimian assets to SH Ltd, and all capital assets of shareholders were “sold” to SH Ltd for a price of zero. Clearly this is a blatant violation of the interests of small shareholders. Since “private ownership rights” must be protected, why is it that the interests of small shareholders aren’t protected at all ? Even in European and Amercian capitalist countries, these people would be punished to the extent of losing everything and be put into prison for their crimes.

If on the other hand one states that these savings are not stocks but just plain savings with a fixed revenue rate, then why is it that after SH Ltd completed its purchase, it did not pay back the original amounts put in by the workers ? After SH Ltd bought Yimian, it failed to pay back the debts owed by the enterprise to its employees, just by this the thousands of workers at Yimian could sue SH Ltd for engaging in deceptive financial practices. Before the debts are paid back, workers should demand that all Yimian assets are put on hold, and as soon as the legal prosecution starts, then the purchasing process of SH Ltd would be forced to halt, so SH Ltd must either invest the promised amounts and give back the debts owed to the employees, or the nominal status of Yimian as being run solely by foreign capital with a clear-cut property ownership simply could never hold.
Unfortunately, at the time Yimian workers were probably under illusions so did not have the consciousness to enact these preparations.

As the final date from the selling-out of the factory gets increasingly near, the amount of effort workers put into propaganda also increased. From mid-March, some workers began to publicly collect together funds for their political struggles, and even many workers who are struggling to make ends meet paid in. Although each donation was only around 5 or 10 RMB, but these tiny trickles eventually formed a giant riverflow. Many medium and low-level cadres in the enterprise also actively participated, some old retired ex-workers over 80 who are respected by other workers actively participated in the mobilisation of the workers for this struggle, yet some people actually called them “old trash who are jumping out despite getting all of the retirement salaries”. At the same time workers continued to present their case to the local government and engage in spreading information on the internet. On 25 March, Yimian workers released an open letter titled “We want work, We want survival”.

From 27 March, when the prospects for discussion became impossible, workers began their formal all-round strike. All of the production lines in the factory stopped working. Virtually every worker and retired ex-worker participated in the strikes and the struggles to protect their factories. Workers closed down the factory entrance and placed it under watch over a 24-hour period, and forbade anyone to enter and steal assets. Nearly a thousand workers went to the Baoding city government to present their case. The city government sent a working team led by Mr. Liu, who is one of the vice-mayors, into Yimian, but apart from putting out lies, no further progress was made on solving the issue.

To add more pressure, apart of several thousand workers who stayed in the factory to place it under guard, starting from 2 April, more than 2000 workers prepared to enter the capital to present their case, and in order to avoid accusations of “causing destruction”, workers creatively called their march “collective tourism”. Like the “collective walk” and “collective shopping” conducted previously, this is a fine example of the great creativity of the people.

But such things terrified the corrupt officials. On the way dozens of police vehicles “guarded” their march, and a vice-mayor accompanied them along the entire path, attempting to persuade them to turn back. Yet the workers are also carefully prepared, many are responsible for providing food and water for the “touring” workers, and virtually no worker actually turned back under the constant persuasion of police and officials, apart from a few who are old and physically weak who had to go back. On the eve of 2 April, the “touring workers” entered the region of Xushui, and the local government sent in thousands of riot police and policemen to forcefully block up the Xushui part of the 107 Highway, and all traffic completely came to a halt. Many vehicles that tried to go to Xushui from Baoding were forcefully turned back by the police. After this the police continued to place 3 lines of human walls consisting of riot police, ordinary police and security teams on the way to Beijing, and temporarily terminated all electricity on the roads. Under complete darkness, “courageous people’s police” forcefully took most workers onto dozens of coaches sent by the Baoding government using electric batons under torchlight, and sent them back to Baoding during the night. Yet at the time several hundred workers stayed in the town of Xushui and refused to go back, and tried to initiate a second “touring plan” using bikes. Unfortunately due to insufficient numbers, after the local government rounded them up, they were “persuaded” to return to Baoding, and the government told them “while we consider your cases very seriously, you must still solve your own problems in Baoding.”

On 3 April, the Hebei provincial government sent people to meet up with representatives from the Baoding city government to hold talks with workers inside the factory. To show compromise, the government terminated all of the official positions of the manager Wang Lijuan, and on 4 April there was the rare occurrance of the Xinhua news agency releasing a public statement in English declaring that the party branch secretary Wang Lijuan has been fired and that workers have been persuaded to return very rapidly. (Xinhua news item : Party chief sacked after textile workers’ protest march) The vice-mayor named Mr. Liu came out and promised to solve the problems related to social securities and debts owed to the employees, and that the government will help workers to enact more pressure on SH Ltd, to implement the promised investments and pay back compensations owed, he even stated that the government will pay to help the workers to engage in legal prosecutions. Yet on the most decisive issue of ownership rights the government still holds that Yimian is a enterprise controlled solely by foreign capital under the company rubric of Asso Ltd, with a clear property relation.

A government calling itself “the communist party” actually falls down to such a pathetically low state in order to protect “the sacred rights of private property ownership”. They are not just concerned with a single “Yimian case”, but with how if this single case spreads out, how many angry waves of attempts to oppose the privatisation of SOEs would begin in China, and how the carefully planned “market economics structure” created over the last few decades would fall apart completely. This would certainly be a major problem for a “responsible” and newly emerging “capitalist world power”.

On 8 April, after the holidays during the Qingming Festival, the government work teams showed signs of paying back the savings of the employees, and the 2600 RMB owed to every worker was quickly paid back. Yet there was no explanation of where this money came from, did it come from the government or from SH Ltd ? If the government paid for this, is this not another instance of state assets flowing away ? For what reason should the debts of SH Ltd be paid by all taxpayers ? If SH Ltd actually paid for this, then why is it that up to now workers have yet to see a single representative from the executive board of Asso Ltd making an official statement ? This debt continued for several years under uncertain circumstances, and this sudden payback is also unclear. The government hopes to prevent a debate on ownership rights by doing this.

At the same time the government and the management layers began to apply the policy of “divide-and-rule” on the workers, and tried to make the workers return to work as soon as possible, and combined promises and threats towards some workers, “the urban factory zones would definitely be sold-off, for those who return to work promptly, later on the government will help them to find job positions, for those who don’t they’d have to help themselves”. Within the entrie city they even tried to apply pressure on the families of the employees through other enterprises and institutions in which the family members worked in, and told them to “look after your own relatives well, and if people from your families engage in collective action again, even your jobs will be threatened as well”. Up to now, most Yimian workers have not returned to work, but more and more are getting into a state of passive waiting.

However through the diligent struggles of the workers, they have won back quite a few things belonging to themselves. Now the workers’ struggles have entered into a state of deadlock, how would it develop further, we are taking note with intense interest, and every other socialist who cares about the fate of the Chinese working class is also taking interest. But the very fact that the Yimian workers entered into struggle previously is itself a very important and correct choice, and as a result of their solidarity, good tactics and persistance, they have already obtained some good results, and in the future based on this they might be able to achieve even greater victories. This is certainly a glorious achievement for the Chinese working class, and a small and nevertheless important victory for the Chinese working class as it counter-attacks and defeats the neo-liberal policies of capitalism.

Only through solidarity can workers with clear class consciousness have the strength to engage in struggles, and only through continuing struggles can the working class find a way out to achieve its own liberation. The final result of the struggle depends on many factors : the balance of class forces, the fighting spirit of the working class as a whole, the “arts of war” of the leaders of workers’ movements and the changes in the external environment. Limited by actual conditions, the movement would experience ups and downs, and the actual struggles also cannot achieve complete victory through just a single battle. When necessary one might need to retreat and accept compromises, and find a path to go forward again from this retreat. But temporary set-backs and compromises are not acts of surrender, but the conditions for collecting more strength, strengthening the organisation and mobilising more of the masses, and be prepared to engage in an even more important and difficult struggle in the future.

Just as Trotsky said 70 years ago when the Great Depression fell upon the world, “under the conditions of the collapse of capitalism, the masses are continuing to live a kind of harsh life under exploitation, and now (the global economic crisis in the 1930s) it is easier to fall into the depths of immense poverty than at any other period of the past. Even if the masses cannot improve their living conditions, we should still fight to defend every mouthful of bread for the struggles for partial and transitional demands, workers more than ever require mass organisations, especially trade unions...every Bolshevik-Leninist should stand in the foremost frontlines of every kind of struggle, even if these struggles only touch on the most mild material interests and democratic rights of the working class.”

90 years ago Li Dazhao stated : “The world of the future will definitely be a world of red flags !” Socialists firmly believe that “one day the slogan “Long Live ! the Proletariat Class” would once more echo across the highest reaches of the skies and clouds !”

Wal-Mart threatens 10,000 job cuts in China

Wed, 22 Apr 2009.
200 white collar staff protest against layoffs outside the company’s headquarters in Shenzhen

On 14 April in Futian District, Shenzhen, nearly 200 Wal-Mart employees assembled around the Wal-Mart (China) headquarters, chanting “Give me back my youth. Respect the rights of workers” and other slogans. The protesters are believed to be mainly mid-level management staff with around 10 years’ service at Wal-Mart. Such employees are usually called “white collar” staff due to their relatively secure jobs and higher pay. Most of them earn around 4,000 yuan ($570) per month.

Wal-Mart (China) Group, plans to sack these senior staff from 17 April. Due to a breakdown of negotiations with management, these workers launched their own ‘wildcat’ protest. After this protest lasting several hours, the ACFTU Shenzhen branch (official ‘puppet’ trade union) became involved in negotiations and achieved a temporary compromise between the workers and Wal-Mart. Wal-Mart delayed the layoffs and agreed to submit a new proposal on relocation and compensation for the workers as soon as possible. On this basis the workers ended their protest.

Wal-Mart is the world’s largest supermarket chain, and has always been a notorious “anti-union” company with a lousy record on employees’ rights. The company entered the Chinese market in 1995 and has seen a big expansion, it currently has 227 stores and more than 70,000 employees in China.

Since the economic crisis, the company announced its retail sales worldwide have fallen by 10%, while even in China, the previous high-speed growth has slowed dramatically. Furthermore, it is in Shenzhen and Guangdong, its earliest and most mature markets, that sales have fallen most markedly.

In order to maintain profits Wal-Mart is planning to adopt a nationwide retrenchment plan in China. Based on its own business report 2009, the average number of employees in Wal-Mart branches will be reduced from 322 in January to 275 in March. Every branch store has already laid off an average of 47 employees, most of whom are ground floor and temporary staff, in departments such as cargo handing, logistics and sales.

Not only Shenzhen staff who stage last week’s protest, but staff at Wal-Mart around the whole country are very concerned about the latest redundancy plan. Some workers said that if outstanding complaints with the layoff proposals are not resolved, they do not rule out further protest action.

Textile workers in Chongqing block traffic in pay protest

Tue, 14 Apr 2009.
Southwest China : 400 workers stage second day of protests over unpaid wages

Around 400 workers from Jindi Industry Group Co., a major state-owned textile company in Chongqing municipality protested over unpaid wages by blocking a main road on Monday 13 April. The workers told Xinhua that the protest, sustained late into the evening, was aimed at attracting government attention as they had not been paid for three months. They blocked a main road in front of the company in Fuling District with iron boards at 21.00. Some came to make the road block attempt from early morning, and more workers joined the blockade after dinner, said a worker, who declined to give his name.

On Tuesday, the workers took to the streets for the second day. A worker named Zhou told Xinhua that the protest was meant to attract government attention because many of the workers had not been paid for the past three months. Zhou’s monthly salary is 380 yuan (about 56 US dollars), which is much lower than the 560 yuan minimum salary standard in Fuling. “Without the meagre salary, my life becomes even more difficult,” he said.

Textile sector in crisis

A spokesman for the local government said that the state-owned company, which employs 6,500 people, cannot afford to pay its employees. This spokesman cited the sharp fall in demand for textiles as a result of the global crisis. China’s textile and garment exports dropped to $6.68 billion in February, a 35 percent decrease from the same month a year ago, according to the General Administration of Customs.

But China’s economic problems are clearly not confined to the export sector and private companies, as Jindi’s problems indicate. 70 percent of China’s textile production is actually for the home market, rather than for export. Therefore the slump in textile sales is also a sign of the slowdown in China’s domestic economy. The government hopes to create nine million jobs this year by boosting the economy with a 4 trillion yuan ($586 billion) stimulus plan. At the same time however, the government estimated last month that the number of unemployed migrant workers had risen to 23 million since January.

China : Hunan taxi strike continues despite arrests

Sun, 12 Apr 2009.
Taxi drivers in the central Chinese city of Yueyang, Hunan province, continued their strike on Sunday against excessively high cab rental costs

Yuenyang taxi drivers began their strike on Friday when dozens of drivers stopped their cabs outside a government building, demanding the municipal government intervene to cut the high monthly fees they are required to pay taxi companies. More drivers joined the strike on Saturday. Police arrested 11 strikers on Saturday following clashes. Those arrested allegedly stopped taxis still operating, causing damage to the vehicles and to drivers who refused to observe the strike, a police source said. Some news agencies reported the incident as a "riot", but it is unclear how reliable this information is.

Privatisation = chaos !

Yueyang has 11 taxi firms controlling about 1,600 taxis and employing 3,000 drivers. In China it is normal for cabs to roll 24-hours a day, with two drivers taking 12-hour shifts behind the wheel. The Yuenyang drivers must pay up to 7,100 yuan (1,040 dollars) every month to their companies in rental and licensing fees, AFP reported. This, for the companies very lucrative, business structure is a result of the privatisation and deregualtion of taxi services in most cities, as part of transport sector reforms introduced from the mid-1990s onwards. Privatisation was put forward as a way to increase effiiency, imporve services and create ’entrepreneur spirit’. As everywhere else internationally, the reality of provatisation has been higher prices, increased pressure on the workforce, and super profits for a few bosses that are not re-invested to improve service.

Last autumn saw a wave of taxi strikes in over ten cities across China fuelled by similar anger of excessive charges, which force drivers to work long shifts. The economic crisis has further cut taxi usage as incomes fall and many people choose the bus or other cheaper alternatives over taxis.

An additional common grievance behind recent taxi strikes is the issue of ’illegal’ taxis, mostly driven by migrant workers who are poor, lack residential rights, and have few other ways to make a living. Many of the migrant taxi drivers are organised by shadow taxi companies, working under conditions even worse than the licensed drivers. Tensions between licensed and unlicensed taxi operators has been one factor behind the violent clashes that have featured in recent strikes by taxi drivers. The capitalist crisis, which in China has taken an extreme form with nearly 30 million migrant workers losing their jobs, is likely to increase such tensions as more ’illegal’ cabs appear at a time when existing taxi drivers are finding it increasingly hard to scrape together a living wage.

Need for democratic socialist solution

Socialists point out that these problems cannot be solved on a piecemeal basis, through the existing maze of deregulated companies. A collective solution is needed, with the centralisation of taxi and other transport services on a city-wide and regional basis, under public ownership and democratic control. Taxi drivers like other workers should enjoy an inalienable right to form their own trade unions to represent their interests. These trade unions should organise both licensed and today’s unlicensed drivers, city residents and migrants, in a common democratic organisation. Under public ownership, with drivers and other transport sector workers elected their management from their own ranks, without inflated salaries but on the average wage within the industry, the transport sector could be planned in a harmonious fashion to meet people’s needs and taking full account of environmental concerns.

In a society where only one in ten own a car, the taxi service is a vital public service. Raising taxi fares is not a solution especially in an economic downturn. In most country’s public transport is subsidised through the tax system precisely because it is "public" and provides a vital service. Therefore, in order to solve China’s taxi chaos, and satisfy both the demands of the travelling public and workers in the sector, the following steps are needed :

* Reverse privatisation and deregulation – for a democratically-run and public-owned taxi and public transport system !
* Build independent and fighting trade unions now for all taxi drivers, licensed and unlicensed, and other transport workers – unity is strength !
* For public scrutiny of the profits, tax accounts, and links with officialdom of all taxi companies. For a democratic review based upon elected committees of workers’ and consumers’ representatives, technical experts and environmentalists, to determine a fair pricing and subsidy policy for local transport.
* No to repression ! Release arrested strikers. Legalise the right to strike and to organise in China.
* For workers’ unity in struggle ! Build common organisations and democratic, inclusive structures in all mass struggles – to involve city residents, migrants, unemployed and ’xiagang’, in one common organisation. Issue strong but friendly appeals for solidarity and joint struggle, including written appeals and wall-papers, and also turning to the travelling public to win their support.

Baoding workers’ march on Beijing shakes city officials

Mon, 6 Apr 2009.
1,000 workers set out on 140km march to China’s capital in fight for jobs and pensions reporters

The decision by thousands of textile workers in the Hebei city of Baoding to launch a daring march on Beijing has brought an immediate, and so far positive, result for their struggle for jobs and pensions. As the following report from Xinhua (4 April 2009) shows, the city government has been forced by the workers’ action to jump to attention, sacking the head of the factory’s communist party branch and promising an ’investigation’ into the company’s Hong Kong owners who have introduced sweeping job cuts and withheld payment of workers’ wages and pension contributions. The workers of the Yimian Group have been involved in a long battle against the bosses since the factory was privatised in 2004. At one time, Yimian Group employed 10,000 workers in Baoding, but has been downsized to around a tenth of this force, with a further 400 jobs now to be axed. fully supports the workers in their struggle, and believes their example, in organising a protest march to Beijing (which has been suspended for the time being - see report below), is of great significance to other workers in China fighting job losses and non-payment of wages. An article by Liang Wendao, first published on chinaworker (3 April), calling for the reversal of the privatisation process and for workers’ democratic control and management of the factory, has been republished on other Chinese web forums, receiving over 10,000 hits over the weekend (4-5 April). Readers include workers from the Boading factory who have been in touch and commented approvingly on the article.

The workers have won an important initial advantage in their battle, but cannot rely on official promises or offers of ’investigations’, which are classical tricks by officialdom to buy time and eventually demobilise workers’ struggles. The distrust of the Baoding workers is shown by the fact that around 100 workers refused to turn back and are continuing their march on Beijing. If there is to be an ’investigation’ of the Hong Kong asset-stripping company (Yafang Group, in which Indonesian capitalists and also Morgan Stanley of the US are involved), then workers should have the the right to elect their own representatives to this investigation. In the meantime, the factory should immediately reopen, with all job cuts withdrawn. Anything less than this should be rejected by the workers.

This is an extremely important struggle of Chinese workers in the face of a brutal economic crisis, and hopes to translate more material into English for the benefit of international readers.

Party chief sacked after textile workers’ protest march
SHIJIAZHUANG, April 4 (Xinhua) —Authorities in north China’s Hebei Province fired the Party boss of a local textile factory after more than 1,000 workers went on a protest march over privatization, job cuts and other grievances.

The decision to remove Wang Lijuan from the position of Party secretary of the Yimian Group, was read out by Lan Baoliang, head of the organization department of the Baoding City Committee of the Communist Party of China (CPC), at a workers rally Saturday morning.

Wang was replaced by Zhang Yanru, chief of the Baoding City State Assets Commission. The board of directors also suspended her job as its chairwoman.

More than 1,000 workers of the group began a 140-kilometer hike Friday from Baoding city to Beijing to protest the malpractice of the management.

The workers were stopped by government officials near Xushui county. All of them returned to Baoding early Saturday aboard buses at the persuasion of government officials.

Founded in 1994 on the basis of the Baoding No.1 Cotton Textile Factory, Yimian group was once among the top 50 textile companies in China.

The state-owned company was sold to Hong Kong-based Yafang group in January 2004.

The new owner promised to inject 50 million U.S. dollars into the company and properly handle its employees.

But according to vice mayor Liu Baoling, none of the promises were kept.

Before Friday’s protest march, some Yimian Group workers aired grievances to the Baoding City Government and the company on March27 about 400 job cuts and poor treatment. They also complained that the group always pays their salaries one month later.

Liu said at Saturday’s rally that he had been interviewing workers about existing problems within Yimian for the past eight day.

Liu admitted problems in the privatization process and said : "The government will work together with the workers to press the Hong Kong investor to fulfill its responsibilities."

"We will try the best to solve the problems via negotiations. But if it has to be solved in the court, the government will bear the fees," said Liu.

He said it is wrong for the Yimian group to pay workers one month behind and that the group must correct this mistake immediately.

People from the departments for disciplinary inspection, public security and the procuratorate went to Yimian to make further investigations Friday, according to Si Cunxi, secretary for disciplinary inspection of the Baoding City CPC Committee.

Deputy Party Secretary of Baoding City, Li Jianfang, pledged to investigate into what he called an inherited problem and vowed to bring to justice whoever is responsible.

He appealed for workers’ support to the government investigation, which he said will be fast and efficient.

Yao Fuxin, leader of 2002 workers’ protests, is released from prison

Tue, 17 Mar 2009.
Yao Fuxin, 58, was released on Monday from a prison in Liaoning province

Vincent Kolo,

Yao Fuxin (姚福信) was sentenced to seven years jail time for his part in massive workers’ protests in the northeastern industrial heartland of Liaoning province in the Spring of 2002. These protests by so-called xiagang (laid-off) workers from former state-owned enterprises (SOEs), shook the ‘communist’ authorities and were met with massive repression, hundreds of arrests, and the imprisonment, following closed trials, of Yao and another independent trade union activist Xiao Yunliang, who received a four year sentence.

Yao and Xiao were initially charged with “gathering a crowd to disrupt social order,” but that was later changed to the more serious charge of “subversion of state power”. In Yao’s case this was based on his alleged involvement in the banned China Democracy Party.

Labour rights campaigners, including the Committee for a Workers’ International and, have protested about the inhuman treatment of both prisoners. On his release yesterday, Yao, who suffered beatings while in detention, had difficulty walking. Yao suffered two heart attacks and a stroke in prison. As the website Human Rights in China reports, "In the Liaoyang Detention Center, he and 19 other inmates were made to sleep on one bed. There, a guard named Lang arranged for two death-row prisoners to watch Yao. Every time Yao closed his eyes to sleep, the two prisoners would step on him.”

On his release yesterday, his daughter Yao Dan told reporters. “He is very happy to be out of prison. Right now he has no real plans other than recovering his health and treating his heart illness.”

“When he got out of prison, workers gave him a big banquet and thanked him for all the suffering he has gone through,” she said. Despite his release, Yao will still serve a three year deprivation of political rights, including the freedoms of speech, assembly and association. Given that these rights are non-existent in China, it means he will remain under continual surveillance and be prevented from speaking publicly about his case.

Gothenburg, Sweden 2004 : Protest in support of Yao Fuxin and Xiao Yunliang and for independent trade unions in China, on the occasion of Vice Premier Wu Yi’s state visist to Sweden. Protest arranged by Rättvisepartiet Socialisterna (CWI Sweden).

2002 : “Beginnings of an independent labour movement”

The spring of 2002 saw mass workers’ struggles break out in the northeastern provinces of Liaoning, Jilin and Heilongjang. This was the biggest mass movement in China since 1989, involving over 100,000 xiagang workers and their families in waves of demonstrations, sit-ins, road and rail blockades and mass meetings. As Human Rights Watch explained in a report, Paying the Price : Workers’ Unrest in Northeast China :

“It was the first time so many well-organised, laid-off workers and their sympathisers – in the tens of thousands – took to the streets simultaneously and sustained their protests for weeks rather than days... Instead of short-term, spontaneous protest limited to a group from one factory, one mine, or one school, worker leaders and representatives... through well thought out strategic goals and tactics, organised tens of thousands of protesters. Nor were the leaders – or the rank and file – reluctant to publicise that, yes, they had organised, and sufficiently so as to enable them to sustain their protests over weeks rather than hours”.

The most significant feature of these events was the appearance of unofficial – illegal – union committees or ‘provisional’ trade unions at the head of a mass movement. The Washington Post called this “the beginnings of an independent labour movement”.

The struggle in Liaoyang

In Liaoyang a movement led by Yao Fuxin and Xiao Yunliang against the fraudulent closure of the state-owned Ferro-alloy Factory, spread to xiagang workers from at least 20 factories. This city of 1.8 million people experienced almost daily demonstrations over a ten-week period, starting on 11 March when an estimated 17,000 workers marched behind such slogans as, “The army of industrial workers wants to live !” and “It is a crime to embezzle pensions !”

On that day, the city’s mayor enraged workers when he told the press : “There is no unemployment in Liaoyang”. According to the demonstrators, 80 per cent the city’s workforce was either unemployed or xiagang.

Rather than a spontaneous outpouring, the protests of 2002 showed a degree of organisation and coordination. Underground committees were formed and representatives were elected. In Liaoyang organised links were established with xiagang workers from other industries. Worker activists undertook mass propaganda work using leaflets in some cases, but mainly posters, which were set up, illegally of course, in workers’ districts and at factory gates.

On 18 March, 30,000 Liaoyang workers demonstrated with placards declaring, “We have a government of hooligans”. This was following the arrest of Yao Fuxin, their union representative. This was also the beginning of a wave of repression with hundreds of arrests and detentions. From this, the Public Security Bureau selected two activists, Yao and Xiao, to make an example of. Their subsequent trials were a sham, with even their families denied access to the court sessions.

Four-year struggle

The Liaoyang protests were the culmination of a four-year battle against the closure of Ferro-alloy plant. The CCP Congress of 1997 had marked a milestone, with the national leadership of Jiang Zemin and Zhu Rongji signalling a dramatic speed-up of the privatisation programme (although this term was not used) by “grasping the large and letting go of the small [companies]”. In the ensuing years, hundreds of thousands of state-owned enterprises were sold-off or bankrupted for accounting purposes, with former SOE bosses stealing the assets. At least 60 million SOE employees were sacked or made xiagang in this process. The term xiagang held out the slim prospect that at least some laid-off workers would be re-employed again in future, once ‘restructuring’ had been completed. This proved to be an invaluable weapon for officials to delude workers and spread confusion, thus cutting across workers’ attempts to organise resistance to the wholesale plundering of public assets.

The Ferro-alloy workers in Liaoyang displayed a high degree of consciousness and collective strength. Among other demands at this time, workers had called for an investigation into malpractice by the factory management. Several Ferro-alloy officials had already been arrested and one convicted of corruption. The factory closed in November 2001 with the loss of more than 5,000 jobs, and with this the loss of workers’ pensions and medical insurance. In a manner reminiscent of the US energy conglomerate Enron, Ferro-alloy bosses had for years issued fake accounts to justify their own fat bonuses. Unlike the Enron affair, however, Ferro-alloy workers had been wise to the bosses’ antics from the start, trying repeatedly to get the city, provincial and even national authorities to intervene. This led nowhere. Perhaps today Yao and many of his former workmates regret wasting time and ink penning letters to former president Jiang Zemin, imploring him to intervene against the city officials on the workers’ behalf.

Mass closures and unemployment

China’s northeast, a stronghold of heavy industry that prospered during the era of central planning, suffered more than any other region as a result of capitalist ‘reforms’ and privatisation. Liaoning province (population 42m) has the highest proportion of xiagang of any province. Real unemployment in the city of Liaoning was around 20 per cent in 2002. In Fushun, a city based on coal mining, 43 per cent of the total labour force was xiagang in 2001. Nowhere are xiagang workers classified as unemployed – this explains Fushun’s official jobless rate of just 2.7 per cent at that time.

In compensation, xiagang workers are supposed to receive half their wages from the company or local government. The minimum allowance, “guaranteed” by city authorities in Liaoyang was at that time 180 yuan (22 dollars) per month, but even these payments are often means-tested : ownership of household pets, a television or telephone are grounds for loss of compensation.

Official trade unions exposed

The struggle in Liaoyang, and other northeastern cities threw a spotlight upon the rotten role of China’s official government-run unions. Workers in Liaoyang told China Labour Bulletin, “We have been to the ACFTU on a number of occasions, but they’ve never taken any real notice of us.” According to Human Rights Watch the view that “there’s no difference between them [the ACFTU] and the boss”, was widespread among workers in northeastern China. A survey from the International Confederation of Free Trade Unions found that :
“Workers unanimously dismiss the official trade union as unhelpful or ineffective at best. At local level, ACFTU officials either deny any legitimacy to independent workers’ action, by calling it illegal, or acknowledge that they are unable to defend workers’ interests in the face of massive restructuring operations.”

Following the 1949 revolution, in which the peasantry – not the working class – played the decisive role, the ACFTU was incorporated into the new state. Its role during the Stalinist-Maoist era was to police the working class at the point of production, prevent strikes and unrest, and periodically ‘mobilise’ the workforce behind management directives. To justify its existence, the union became a benevolent society : organising social activities (sports events, works’ outings and ‘model worker’ competitions) and administering some welfare benefits. In many state-owned enterprises, ACFTU officials were retired managers, underlining its subordinate role towards management. Nowadays, with the massive expansion of private companies, the ACFTU has gained access to these companies by bringing private bosses into its structures and according them an influential role. Almost universally the chairman of a union branch at a privately-owned factory is put there by management, sometimes a relative of the owner, or the head of personnel. The union bureaucrats’ main claim is that they can help the company i.e. the bosses achieve ‘stability’ and avoid disruption.

International solidarity

The CWI, a fighting socialist organisation, took up Yao’s case, in common with many international labour rights groups. CWI supporters in Australia, Sweden, Holland and other countries staged vigils and made representations to China’s embassies (pictured above : Protest by CWI Sweden on the occasion of Vice Premier Wu Yi’s visit to Gothenburg in 2004). This pressure unfortunately had little direct effect on China’s one-party regime, who can claim the dubious distinction of putting more trade union activists behind bars than any other government in the world. Public campaigning over the fate of Yao and other imprisoned workers’ activists has however helped to increase global awareness over the Chinese regime’s appalling record of anti-unionism, and also highlighted the role of the hordes of multinational brand-name companies that have flocked to China to take advantage of this. sends its greetings to Yao and his family on his release. Yao Fuxin was made to suffer by the authorities as a warning to other workers. But with their system now in deep crisis, the Chinese dictatorship cannot succeed indefinitely in its efforts to outlaw independent fighting trade unions. The lessons of the struggle in 2002 that led to the persecution of Yao Fuxin and his comrades, need to be absorbed by workers today.

Police attack workers’ protests in Chongqing and Zigong (Sichuan)

Mon, 16 Mar 2009.
In western China security forces have cracked down on workers’ struggles in recent weeks

In Chongqing 800 workers have been occupying their abandoned textile factory for several months, as part of a long battle for unpaid benefits and compensation arising from the fake ’bankruptcy’ of the plant and its sale to speculators. In Zigong, a city in Sichuan province, police clashed with about a thousand laid-off textile workers fighting against the privatisation of their factory.

Police arrack workers’ occupation in Tongliang 15-16 February

Five workers from the silk factory in Tongliang, Chongqing municipality, were detained by police for organising a sit-in in the factory. Tang Aimin (唐爱民), Hu Weimin (胡卫民), Li Taiyuan (李太元), Ou Hongyong (欧红勇) and Wang Yu (汪宇), acted as representatives of about 800 laid-off workers demanding pensions and medical insurance after the plant’s closure.

The workers took over the plant as part of an ongoing campaign for their demands. On 15 February police lured the five representatives into a trap, ostensibly a meeting to “discuss the problem of the plant”. They were summarily seized instead on suspicion of “gathering crowds to disturb social order” and threatening public security. These charges could send them to prison for years. Police also warned the other protesters that if they “create problems,” they too would be arrested.

On 16 February, about 2,000 government workers mobilised by the local government surrounded the silk factory and ordered the occupying workers to leave. When the sit-in protesters refused, local officials ordered a group to enter the factory, but these were forced to pull back when the sit-in protesters threatened to set off explosive oxygen containers.

The Tongliang factory was declared bankrupt in 1996 and was sold in 1998. At the time of the sale, the workers were not notified of the fate of the factory and were dismissed with severance packages of between RMB 5,000 and 6,000. The workers suspected that the factory was sold at a massive discount and that the sale was a result of corrupt dealings involving local officials. After studying the legal position, the workers believe that they are entitled to pensions, medical insurance, or at least compensation appropriate to the number of years they have worked in the factory. They set about petitioning the local government over these awards, but this led nowhere.

In 2008 all the plant’s machinery was sold and the building was slated for demolition in favour of a highly lucrative real estate deal. At that point ex-plant workers started their occupation of the premises to protest their condition, preventing the demolition from going ahead.

Zigong workers’ struggle 20-23 February

Police clashed with about 1,000 workers from a textile factory in Zigong City, Sichuan Province, who have been demonstrating outside of the Zigong City government building. Six protestors were beaten and injured by the police.

A source at the Zigong government offices said the matter was related to the factory being changed from a state-owned company to a private enterprise, refusing to give more details.

China Worker

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