China: Privatisation sparks clashes


Thirty thousand workers at state-owned Chinese steel works Tonghua Iron and Steel Group clashed with 1000 riot police and prevented the company's privatisation, the Information Center for Human Rights and Democracy said on July 24.

About 100 people were injured, the Hong Kong-based ICHRD said. Chen Guojun, general manager of Jianlong Steel Holding Company, which was attempting the takeover, was beaten to death by workers after ordering protesters back to work.

On July 24, Chinese officials said that the long-planned takeover had been scrapped. Tonghua is China's largest iron and steel group and has been earmarked for privatisation for years.

Jianlong temporarily controlled Tonghua between 2005 and early 2009, but 2008's steel price drop caused significant financial losses. Earlier this year, Jianlong parted from Tonghua, but steel prices have risen again, making the privatisation profitable.

The ICHRD said workers attacked Chen Guojun after he threatened to lay off up to 25,000 of Tonghua's 30,000 workforce. He was reportedly paid around US$438,000 last year, while some Tonghua retirees have been paid $29 a month.

The Supreme People's Court (SPC) said labour disputes in China increased by 30% in the first half of 2009. Chinese court officials blamed the financial crisis for the increase.

With the decline in global demand, export companies in China have made significant cutbacks, increasing unemployment.

In March 2009, the Chinese government announced plans to create an asset management company to hasten privatisation of smaller state-operated enterprises. The target is to cut their number from 141 to between 100 and 80 by 2010.