Factory Closings in China Arouse Workers' Fury

[Stephen E Philion <philion@xxxxxxxxxx>]

What is fascinating to me about the case of China is both the extent of
conflicts betweeen workers and managers/ministries over the terms of SOE
reorganization and the almost complete lack of any active reaction on the
part of the left faction of the CCP.  There is missing any strategy
whatsoever to show support for workers in these conflicts. What makes this
so remarkable is how much space exists in China for making this possible
through legal means. Intellectuals/cadres in China possess enough
knowledge of labor and enterprise conversion laws that make it feasible
for them to set up the equivalent of legal aid organizations, institutes
studying systematically the different problems workers face in specific
segments of SOE industries, strategies for defending SOE workers' legal
rights (as they exist on the books) and the like.

One of the clearest reasons why cadres/intellectuals don't do this is
their fear of engaging in such activity as it can be easily labelled
illegal or subversive.  How does one defend SOEs' rights in the Party if
one is kicked out of the Party? This is not a new dillemma, but the level
of conflict in China is only going to intensify according to most who
observe the situation, especially with the onset of WTO 'reforms'.  Just
how long  horse trading with fewer and fewer bargaining chips can remain
the only strategy the left in China pursues remains to be seen.

Steve



August 31, 2000

Factory Closings in China Arouse Workers' Fury

By ELISABETH ROSENTHAL

     _________________________________________________________________

                                                         Related Articles
       o Maverick Chinese Province Fears Opening of Trade (June 12, 2000)
           o Caught Between Eras: China's Factory Workers (Nov. 18, 1999)

                                                                    Forum
                                  o Join a Discussion on Chinese Politics
     _________________________________________________________________

     T IANJIN, China, Aug. 29 -- The brick-walled Meite Packaging
     factory compound is nearly deserted now, its managers and machines
     hastily transferred in the last couple of days to a special
     development zone 30 miles outside this industrial city.

     Although the closing had long been planned, the sudden departure
     was prompted by an unusual event here, Last week, desperate Chinese
     workers expecting layoffs seized six foreign managers from Meite's
     American parent company and held them hostage in the factory for 40
     hours.

     In the space of a decade, the Meite plant was transformed from a
     state-owned company making pipes to a beverage packaging firm
     jointly owned by the Chinese and an American corporation -- and,
     just recently, to a factory wholly owned by the foreign partner,
     the Ball Corporation of Broomfield, Colo.

     And so this sweltering summer, middle-aged workers who not so many
     years ago were promised cradle-to-grave security by the state
     factory found their livelihoods suddenly threatened by a capitalist
     corporate restructuring and felt they had no where to turn.

     "Every day since the beginning of August they were there at the
     gate, protesting and trying to block deliveries and people from
     going in," said Liu Qiuling, a retiree who lives next to the
     factory and knows many who worked there. "But the managers didn't
     meet with them. I think that's why the workers were so mad."

     Taking foreign businessmen hostage is rare in China, despite the
     thousands of often fractious business partnerships between Chinese
     and foreign companies. But the workers' frustrations that touched
     off the incident are commonplace, leading to hundreds if not
     thousands of protests in recent years.

     Under government orders to become economically self-sufficient,
     many formerly state-owned factories have tried to transform
     themselves, often with the help of foreign partners.

     The sink-or-swim strategy promoted by Prime Minister Zhu Rongji,
     who oversees economic policy, has no doubt rescued thousands of
     companies from bankruptcy and prepared them to compete in the
     global market. It has also often enriched many former state factory
     officials, who are often offered lucrative positions in the
     revamped business.

     But it has been painful and confusing for China's tens of millions
     of workers, echoing similar privatization efforts in the former
     Soviet bloc. The workers are unfamiliar with the intricacies of
     buyouts and severance packages, generally lack effective labor
     unions and have little outlet for their complaints against new,
     often absentee, bosses.

     "Workers' rights are not protected much when this happens," said
     Anita Chan, a labor expert at Australian National University.
     "These are people who worked for the state and thought they would
     work and then retire and enjoy certain benefits: health care,
     pensions, things like that.

     "But then one day it's just finished. And they are 40 and have many
     decades of life ahead of them. What will they live on?"

     She said the workers at Meite, who were offered a severance
     package, did better than many others who get nothing at all.

     The conversion of state factories has often left the workers at
     odds with new employers, both foreign and Chinese. And protests,
     though rarely reported in the Chinese media, are a frequent result.

     Earlier this month, also in Tianjin, disputes erupted between
     workers at a state-owned liquor company and its German partner,
     which wanted to sell factory parts for scrap metal. The workers
     blocked a truck, insisting that the profits from the metal were
     rightfully theirs.

     Late last year, workers at the formerly state-owned Red Lion Paint
     Factory in Beijing ended up in a near-fatal standoff with the
     management after a new private owner, a Chinese company from
     Shandong Province, wanted to close the plant and sell the land.

     When a delegation of workers failed to persuade the management to
     keep the factory going, some of the workers attempted suicide in
     the office of the factory's Communist Party secretary, who had
     sided with the new owners. One women swallowed a bottle of
     pesticide, and two men slashed their wrists.

     Workers are often particularly incensed when factory bosses reap
     profits from restructuring while the workers suffer.

     Opportunities for corruption abound when state property is released
     into the private market, because it is often difficult to place a
     value on such companies. Some former factory bosses have managed to
     buy profitable ventures at bargain basement rates.

     "What laid-off workers particularly hate to see is their factory
     taken over by the factory management and converted to private
     assets," said Dai Jianzhong, a specialist in labor issues at the
     Beijing Academy of Social Sciences. "They see factory assets being
     used to buy cars and houses."

     Often the desperate acts reflect the dire situation of middle-aged
     workers who find themselves abruptly without jobs in a country
     still poorly prepared to deal with unemployment.

     Until a decade ago, nearly all urban Chinese workers received
     housing, health care and pensions through state jobs. Although that
     is changing, China has yet to develop an effective social security
     net for the unemployed or elderly. Its embryonic welfare system
     offers no health care or jobless benefits for people like those
     laid off from Meite.

     And the ranks of such workers are likely to grow, because Meite was
     the victim of what in the West would count as business as usual.

     Through a series of joint-venture partnerships in the 1990's,
     Meite's parent company, the Ball Corporation, has ended up with
     four packaging plants in Tianjin, mostly making soda and beer
     containers.

     The plan now is to consolidate the four into one -- in the special
     economic development zone, which offers tax advantages, said Scott
     McCarty, a Ball spokesman.

     Ball has 17 wholly owned or joint-venture companies in China and
     has been doing business in the country for more than 15 years.

     The folding of four factories into one meant layoffs, and the
     company invited some workers at Meite, mostly people in their 20's,
     to move with it, a worker who answered the phone at the plant said.
     The decision is typical for downsizing Chinese companies, experts
     say, since the younger workers tend to be better educated.

     The rest of the workers were offered a one-time severance payment
     of about $1,200, which many considered inadequate, prompting the
     protest.

     On Wednesday last week, when executives from Ball's Hong Kong
     office went to post a closing notice in the factory, workers
     detained them in an office and would not let them leave, Mr.
     McCarty said. He said that the six men had not been physically
     harmed, but that the workers were verbally aggressive at times.

     "Just like in the U.S., people were upset that their plant would
     close -- that's understandable," said Mr. McCarty. "From our point
     of view the incident is over now and it's fine." Still, he said the
     company would probably change some procedures, including those for
     closing factories.

     The police did not enter the factory during the ordeal, calling it
     an "internal" matter. They would not say today if there had been
     any arrests.

     The foreigners -- an American, two Malaysians and three Hong Kong
     residents -- were released after 40 hours early Friday. Mr. McCarty
     said he was unsure if concessions had been made, although a worker
     at the factory said the severance payment had been raised a bit.

     But in a city with hundreds of thousands of laid-off and unemployed
     workers, that may provide little comfort. Of 30 jobs listed outside
     the district employment center near the factory, only one was
     listed as open to applicants over 35.

     "People count me as lucky," said Mr. Liu, sitting on his old
     bicycle cart. "I retired a long time ago, so I have a pension. But
     what will these workers do if they get sick? How will they pay for
     that?"

     Farmers in Violent Protests

     BEIJING, Aug. 30 -- Thousands of farmers protesting high local
     taxes smashed government offices and looted homes of the rich in
     the southern province of Jiangxi earlier this month, local
     officials told Reuters.

     Similar disturbances have been reported from many rural areas as
     farmers with stagnant incomes face growing tax burdens from local
     governments, but this is one of the larger known cases, enveloping
     numerous towns and villages over 10 days until the police were
     deployed.

   E-mail This Article


   Ask questions about International News and tell other readers what you
   know in Abuzz, a new knowledge network from The New York Times.
   [abuzz_logo90.gif]

     _________________________________________________________________

   Home | Site Index | Site Search | Forums | Archives | Marketplace

   Quick News | Page One Plus | International | National/N.Y. | Business
   | Technology | Science | Sports | Weather | Editorial | Op-Ed | Arts |
   Automobiles | Books | Diversions | Job Market | Real Estate | Travel

   Help/Feedback | Classifieds | Services | New York Today

   Copyright 2000 The New York Times Company

   [pixel.gif] [pixel.gif]