CHANGES IN CHINA

A Serious Problem Of Unemployment

In September 1997, when Jiang‘s plan was adopted at the 15^th Congress of the Communist Party of China, it was said that it would take nearly five to ten years to implement the same and, as a result, 20 to 25 million workers in the state sector would lose their jobs. It was also hoped that the private sector, creating new jobs, would be able to accommodate most of the fired workers. It may be recalled that the Jiang’s Plan called for privatizing all the existing 300,000 public sector undertakings barring only 1,000 units which were of strategic importance.

In reality, it is now seen that the jobs created in the private sector fall far short of the unemployment created in the state sector. According to a recent estimate, nearly 43 million state sector jobs were eliminated between 1997 and 2000, and over the same period the private sector could create only 16.5 million new jobs. This dismal picture is getting worse as more and more PSUs are either being privatized or liquidated.

Breathtaking pace of shutdowns

In 1997, total industrial work force in China was about 130 million and hence the above features indicated that more then 33 per cent of the workforce were thrown out of jobs in past four years, only 12 per cent of them could find jobs in the private sector, while 21 per cent of the workforce have became entirely jobless. But the Beijing-based Development and Research Centre and the government controlled media are trying to hide the facts and say that the present rate of unemployment in between eight and nine per cent. The Chinese labour ministry is projecting a still rosy picture and says that the current rate of joblessness is merely 5.6 per cent. But the statistical data of the same labour ministry show that only in the past one year more than 19 million state workers were laid off when outmoded and bankrupt PSUs were shut down at a breathtaking pace.

Other side of Chinese success

There is no doubt that there are twice as many jobs in the private sector today as there were five years ago, but it is much below the rate of joblessness created in the state sector.

Since the totalitarian Chinese government opted to follow a capitalist path in 1978, the Chinese economy has quadrupled in size. Dazzling coastal cities like Shanghai and Canton has emerged as nerve countries of the world business and are sparking with skyscrapers, five-star hotels and bustling nightclub. But in reality, the countries entered the new century in the heavy burden of tens of million of jobless workers --- a new generation of have-nots. The government is afraid that in the near future this regiment of jobless urban workers would rise in open revolt, and science of such an outburst are surfacing here and there. Tense of thousands of jobless workers are holding demonstrations against state sector lay – offs in various cities of the country.

In April this year, more than 30,000 workers laid off by China’s biggest oil company Petro China help a demonstration in front of the company headquarters in Heilongjain to get back their jobs. A month earlier, thousand of jobless workers held a demonstration in the northern city of Liaoyang. Thousands of jobless worker also help demonstrations in various other cities like Fushun and Lanzhou.

Fighting for nonexistent jobs

The Communist government, on the other hand, is not ready to tolerate organized labour movements and at present it is cracking down on these protests by arresting those who take leading roles in organizing such rallies. According to the International Confederation of Free Trade Unions, several hundreds of such leaders have been arrested in the past two months. Experts apprehend that more months. Experts apprehend that more and more demonstrations would continue to flare up and the situations would go complete out of control in coming years.

Commenting on these developments, Mr. Mo Rong, a spokesman of the ministry of labour and social security, says, “If the employment situation does not improve, there will be serious impact on social stability”.

“China is careering towards nothing less than an unemployment war, with people fighting for jobs do not exist”, says Mr. Hu Angang, a professor of Beijing based Tsinghua researcher in DRC, says, ”when these people have nowhere to turn, they will defend their rights even with violence”.   

PART – II

Roots Of Communists Party Weakening Very Fast

At present, the country does not have a uniform national unemployment benefit scheme and the provincial authorities tackling the problem in a haphazard manner, according to their financial capabilities. People are being provider with laughable unemployment benefits that vary from  $ 12 to $ 40 (Rs. 600 to Rs. 2,000) a month and that too only for to years. It is important to note here that in a period of crisis like this, the small-scale sector could play a vital role in employment generation. But so much effort has so far being undertaken by the government.

Trade barrier

China’s recent entry into world Trade Organization has added fuel to the problem. It has compelled the government to lower the trade barrier and to invite more and more foreign competitors both in the industrial and the agricultural sector. In fact, cheap imports are now threatening the major domestic industries. For example, the Anshan Iron and Steel works in Liaoning with its 250,000 worker is now on the verge of closure. According to expert, the plant can now cut 39 out of 40 workers by installing modern equipment. Similarly, the biggest car making company the first Auto Group in Jilin, with its 245,000 workers, is awaiting a closure. According to the American consultancy firm AT Kearney, an average worker of the company produces 2.5 cars per year, while in the US, an average worker of General Motors produces ten times at many cars. An estimate of AT Kearney says that the company can cut seven out of eight workers.

The lowering of trades’ barriers has begun to hit China’s agriculture sector as well. Farmers who were so far producing for the state are now facing stiff competition with highly mechanised American agro-business. Being forced off the land, farmers are now rushing towards the coastal cities to collide with already played off millions of factory workers. In the past two years, the countries have experienced once of the largest in migration in human history ----- more than 100 million farmers had marched towards the eastern cities in search of pretty low level jobs relating the extremely rigid Chinese law the tries to keep people to confined to their own place.

According to Mr. Chen Huai of DRC, the situation would turn worse in the near future. “Within the next ten years, nearly 150 million farmers will move to the cities looking for jobs”, adds Mr. Chen.

More important, due to rapid privatisation, the roots of the Communist Party are weakening very fast. Once upon time, the state enterprises functioned as strong party branches that controlled the lives of the urban population. But now, as the state sector crumbles, so to do the party branches and thus the party is losing control over the most dynamic and dominating area of the Chinese economy. In the past, state enterprises provided breeding grounds for young party activists as well as fertile lands for recruiting party members. In those days, party committees used to run the state-owned factories and often the factory managers functioned as party’s local branch leaders.

Contracts

But at present everything has tumbled the ----------------------- giving place to private enterprises where most of the workers are hired on short-term contracts, not ready to displease the bosses or violate company regulations by taking active part in party politics. Once upon a time, a worker having party membership was favored with special treatment, but now it is discouraged and disfavored. To overcome the setback, top party leaders are thinking of bringing private bosses within the party fold. Previously there was a ban on admitting a private sector boss as a party member, but recently the government has decided to lift the ban. At the same time, party leaders are thinking of setting up party branches in private undertakings, though little progress could so far have been made in this direction.

The party had 50 million members in 1990 and now it has increased to 64 million. Experts believe that this does not reflect party’s popularity among the growing population of private sector employees. For example, in Wuhan, a city with 4.4 million population on the banks of Yangtze, only 0.9 per cent of the private sector workers were party members in 1993, the proportion remained the same despite the fact that the number of people working in private or foreign invested companies increased by nearly 200 per cent.

Shenyang is the biggest city in northeastern China where 640,000 workers were employed in private enterprise in 1999. But out of them, the party would manage to recruit only 29 party members. A recent study has revealed that out of all the newly setup private sector enterprises, only 35 per cent have a party member as an employee and only 17 per cent have a party cell.

So, Dr Pan Wei, a professor of the Beijing University, says, “Party Organisation at the grassroot level in decaying. Regular party activities have virtually stopped”. According to professor Pan, the party is losing grip even on state enterprises and within a few years, in urban China at least, the party’s activities will be confined mainly to government departments and institutions were a party membership is steel a prerequisite for advancement. “It will pretty much be a bureaucratic party”, says professor Pan.

Opportunity

The good news is that political instability would provide a golden opportunity for the Chinese Democratic Party to launch a democratic revolution, and hence set up a democratic government putting an end to the present draconian Communist rule. Till today, CDP is working underground and experts believe that it could have spread its activities to the remotest corners of the country. The Communist government is also not sitting idle and utilizing every opportunity to arrest its leaders and put them behind bars. According to a recent party release, about 20 top ranking CDP leaders and several thousand activists are serving jail terms. Many believe that the party has gained more strength than what is commonly anticipated.

Mr. Rein Wang is one of the top ranking leaders of CDP. He believes that a political change in China is inevitable, but rules out any rash or hasty step. “Our main task is to inch forward in small steps and reach our goal. To make people understand the evils of the present. Communist rule and bring them on our side… We shall not repeat the mistake we committed at the Tiananmen Square in 1989”’ adds Mr. Rein.

So, many believe that China is heading for a democratic revolution, which may either be violent or bloodless like the Russian perestroika. And the present crisis arising out of large-scale unemployment would certainly hasten the doom of Communist rule.